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Sledge v. Sledge

Supreme Court of Mississippi

December 13, 2018

T. MARK SLEDGE
v.
GRENFELL SLEDGE AND STEVENS, PLLC d/b/a GRENFELL & STEVENS, PLLC, JAMES B. GRENFELL AND JOHN HUNTER STEVENS, INDIVIDUALLY

          DATE OF JUDGMENT: 06/19/2017

          HINDS COUNTY CHANCERY COURT TRIAL JUDGE: HON. M. RONALD DOLEAC

          TRIAL COURT ATTORNEYS: WILLIAM C. WALTER STEVEN HISER FUNDERBURG

          ATTORNEYS FOR APPELLANT: T. JACKSON LYONS MARC E. BRAND

          ATTORNEY FOR APPELLEES: STEVEN H. FUNDERBURG

          BEFORE WALLER, C.J., COLEMAN AND MAXWELL, JJ.

          COLEMAN, JUSTICE.

         ¶1. Upon the withdrawal of T. Mark Sledge from the law firm Grenfell Sledge and Stevens, PLLC, an issue arose regarding the fee distribution for several of the firm's and Sledge's cases, more specifically, the interpretation of the firm's partnership agreements and related documents. Sledge filed suit against his former firm and its individual members. Following a hearing, the Hinds County Chancery Court granted the motion for summary judgment filed by Grenfell Sledge and Stevens, PLLC, and its individual members and also a declaratory judgment in their favor. Sledge challenges the chancery court's rulings; however, we are unpersuaded by his arguments on appeal and affirm.

         FACTS AND PROCEDURAL HISTORY

         ¶2. On April 3, 2014, James Grenfell, T. Mark Sledge, and John H. Stevens executed a "Supplement to Partnership Agreement For Grenfell, Sledge & Stevens"[1] (Supplement Agreement) to address the division of fees in general and, more specifically, the division of fees and firm property in the event of death, disability, retirement, withdrawal of firm members, and/or dissolution of the firm. The Supplement Agreement became effective on January 1, 2014, although it was not executed until April 3, 2014.

         ¶3. According to the Supplement Agreement's section providing for the division of fees, Grenfell Sledge and Stevens, PLLC, agreed that,

Beginning January 1, 2014, cases signed up after that date, not related to joint firm advertisement, the said partner that obtained case or fee generated therefrom will be entitled to fifty percent . . . of the fee as compensation from the case, from the total fee to the firm, with the remaining fifty percent . . . to be divided per the prior partnership agreement [or one-third] each after the payment of overhead and expenses. We recognize that on these individual cases the partner who has the case is responsible for fifty percent . . . of the case specific expenses until settlement. The remaining fifty percent . . . expenses will be paid from the general partnership fund. . . . The Agreement set forth above will take place in the year 2014 and in the year 2015 the partner obtaining the case or generating the fee will be entitled to sixty percent . . . of the fee and be responsible for sixty percent . . . of the expenses on each case under the same terms as set forth above. In 2016, the generating partner's percentage will increase to seventy percent . . . of the fees and expenses as set forth above. In 2017, the generating partner's percentage will increase to eighty percent . . . as set forth above. In 2018, the generating partner's percentage will increase to ninety percent . . . as set forth above. In 2019 and in subsequent years, the generating partner will be entitled to one hundred percent . . . of the fees they generated and will be responsible for one hundred percent . . . of the expenses on each case.

         Additionally, each member was required to pay one-third of the expenses for operation of the common office-operation expenses.

         ¶4. The Supplement Agreement also contained a provision for how fees would be handled in the event of the death, disability, retirement, or withdrawal of a member. According to the provision,

Should a member of this partnership retire, withdraw, die or become permanently unable to practice law, fees from cases that he leaves with the firm will be handled by the remaining partner(s) and he or his estate or representative will receive one-half . . . of any fees from cases resolved in the first six . . . months following his departure or one-third . . . of the fees generated from cases remaining with the firm thereafter. Said . . . withdrawn . . . partner will receive compensation only on his cases or on cases obtained through advertising and referred to other law firms as addressed below. . . .
Cases that were advertised for and referred to other attorneys . . . will continue to be divided one-third . . ., one-third . . ., one-third . . ., whenever resolved, unless the referred case results in substantial work for the remaining partner(s). . . . Where advertisement is ongoing at the time of . . . withdrawal, the departing partner will be entitled to fees from, and only from, cases that are signed up prior to his . . . withdrawal.
Fees from cases obtain[ed] through joint firm advertisement . . . will continue to be divided equally between the partners. . . .

Last, but also important, the Supplement Agreement stated, "Any dispute or decision related to this agreement or partnership shall be settled by a majority vote of the partners."

         ¶5. Then, on April 30, 2014, Grenfell, Sledge, and Stevens amended the Supplement Agreement because it "did not address each partner[']s case inventory of individual existing cases in the office before January 2014[.]" The Amended Supplement Agreement explained, "From this day forward each partner will receive [fifty] percent of the fees brought into the firm of any case considered an individual case that was signed up before [January] 2014. The remaining [fifty] percent will be divided [twenty-five] percent to each of the other [two] partners."

         ¶6. The group operated as such until Sledge provided notice to the others that he was withdrawing from the firm effective August 4, 2015. According to Sledge, he was "forced" to withdraw from the firm "[d]ue to the intentional actions of members Grenfell and Stevens, including harassment, false accusations, breach of good ...


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