Prince, Yeates & Geldzahler v. Young

In April 1995, the law firm of Prince, Yeates & Geldzahler (firm) (plaintiff) hired Robert Young (defendant) as an associate attorney with a starting salary of $70,000. The firm told Young that his salary would likely increase each year and that the typical partnership track for an associate like Young was two to three years. In 1996, Young represented Charles Krause in a personal-injury action involving a helicopter crash. Around the same time, Young represented Mountain West Helicopters, the owner of the helicopter involved in Krause’s accident, in a separate lawsuit. Both cases were contingency-fee cases. Young spent most of his time on these two cases over the following two years. In 1998, Young asked the firm how he would be paid for the Krause contingency-fee cases. The firm and Young reached a tentative agreement under which Young would take one-third of the Krause contingency fee, and the firm would take the remaining two-thirds. The agreement was put in writing, but Young did not sign the agreement. On June 14, 1999, Young learned that Krause had settled his case without Young’s knowledge and that the contingency fee would be $650,000. The next day, without telling the firm that the Krause case settled, Young countered the firm’s earlier proposed contingency-fee split. The Firm did not respond to Young’s counterproposal. On July 2, Young informed the firm that he would leave the firm if it could not agree to his counterproposal. The firm accepted Young’s resignation. After Young’s departure, the firm learned that Young represented clients without the firm’s knowledge and used the firm’s resources while Young personally retained all fees for the cases. The firm sued Young for breach of fiduciary duty. The firm and Young both moved for partial summary judgment on the breach of fiduciary duty claim. The court denied the firm’s motion and granted Young’s. The case continued to trial, and a jury awarded Young $280,000. The firm appealed the trial court’s denial of its motion to dismiss.