Photo by Jonathan Rotondo-McCord
Update (January 3, 2019): Pro bono work, as we all know, is legal service provided by lawyers without pay — charity. Pro nono work, is legal service provided by lawyers without pay — loser contingent fee cases, deadbeat clients, etc. Sadly, many fine lawyers have no time for pro bono work because they have too much pro nono work to dig out from under. They cannot afford donating their time and energy to worthy causes; they do not have the luxury. These difficult circumstances come to mind in the the case, described below, a long disappointing slog for the Rochester, Minnesota law firm, O’Brien & Wolf.
You can read in the attached opinion what might be the death knell to the law firm’s claim that it can recover any proportion of its legal fees from an ERISA plan when the law firm recovered money for the plan, without any agreement from the plan that it would pay the law firm. (We will see if the firm petitions the Minnesota Supreme Court for review or whether it will raise the white flag at this point.)
You can read the original post below (from July, 2017) to get a sense of how long and how hard O’Brien & Wolf has fought to get some of its legal fees from their client’s ERISA plan for which the law firm recovered over $150,000…
Photograph by Maura Teague
Original post (July 10, 2017) (under the headline: Get your money for nothing, get your checks for free…): Travis Schurhammer was badly hurt in a snow-mobile accident. An employee welfare benefit plan (“the Plan”) took care of Mr. Schurhammer’s significant medical bills (over $150,000). But the Rochester-based law firm of O’Brien & Wolf took on Mr. Schurhammer’s personal injury case against other third-parties (two insurers) on a contingent fee basis and got a gross recovery of $800,000 for Mr. Schurhammer.
Does it seem right that the Plan should be reimbursed every penny that it paid for Mr. Schurhammer’s care out of Mr. Schurhammer’s recovery without paying a penny for O’Brien & Wolf‘s work? To be clear, if the Plan does not pay any share of Mr. Schurhammer’s legal fees and costs, Mr. Schurhammer, the badly injured personal injury plaintiff, effectively pays for all of the law firm’s legal fees and costs out of his own pocket. In fact, there are cases in which the injured plaintiffs end up with no recovery (or even “in the red” – a “negative recovery”) because the Plan is paid off first and then the contingent fee law firm.
To whom does this make sense?
This makes no sense to anyone except, of course, the health insurance plans, which, under the current law, seem to obtain a 100% recovery of their health care cost obligations at a cost of $0.00.
However, according to O’Brien & Wolf, one Illinois law firm:
found the key that unlocks the health insurer’s vaults, and in 2015 prevailed in that state’s Supreme Court, forcing an ERISA plan to pay them one-third of the amount that firm recovered on behalf of that plan. Schremp, Kelly, Napp & Darr, Ltd. v. The Carpenters’ Health and Welfare Trust Fund, 35 N.E.3d 988 (Il. App. 2015).
O’Brien & Wolf’s case is one of first impression in Minnesota and the states covered by the U.S. Court of Appeals for the Eighth Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota). U.S. District Court Judge Susan R. Nelson (D. Minn.) will have to decide whether the Illinois law firm’s vault key works here.