Bergantzel v. Mlynarik

Jan Mlynarik (defendant) was injured in a car accident. Mlynarik hired Terri Bergantzel (plaintiff) to help Mlynarik settle his personal-injury claims, agreeing to pay Bergantzel a contingency fee of 15 percent for the work. Bergantzel was not licensed to practice law but offered to help Mlynarik get a lawyer if one became necessary. Bergantzel found witnesses, prepared affidavits, made phone calls, gathered Mlynarik’s medical records, obtained an opinion letter from a doctor, and negotiated with the insurance companies. As a result, the other driver’s insurance company paid Mlynarik its total policy limits of $100,000, and Mlynarik paid Bergantzel her agreed contingency fee for that recovery. However, the $100,000 payment did not cover all of Mlynarik’s injuries. Bergantzel kept working and got Mlynarik’s own insurance company to offer $35,000 under Mlynarik’s underinsured-motorist (UIM) coverage. Bergantzel told Mlynarik that he would need to hire a lawyer to get a higher UIM offer. Mlynarik hired a lawyer and eventually settled with his own insurance company for a $65,000 UIM payment. However, Mlynarik paid Bergantzel only part of her contingency fee for this recovery. Bergantzel sued Mlynarik in small-claims court to recover the $1,650 that was still not paid under her contingency-fee agreement with Mlynarik. Mlynarik’s defense was that the fee was for practicing law, and Bergantzel was not licensed to practice law. The trial court found that Bergantzel could help settle insurance claims without a law license and ordered Mlynarik to pay. The district court affirmed this ruling. The Iowa Supreme Court agreed to review the issue.