Representative of the Estate) and infant daughter, as well as the injured grand- mother, all hired the same attorney to represent them. Eventually, the avail- able policy limits of $1.25 million were offered. An unsuccessful attempt by plaintiff ’s counsel was made at this point to reach an agreement as to each party’s respective share prior to accepting the policy limits offer. Although no agree- ment was reached as to a percentage or amount of individual shares, all parties agreed to authorize acceptance of the policy limits offer with a further agree- ment that resolution of their respective shares would be left to a later date and absent voluntary agreement would be submitted to the Court for resolu- tion. After receipt of the policy limits, counsel presented to his clients his view of an appropriate monetary apportion- ment of the settlement proceeds. The grandmother objected. Counsel then in- formed all of his clients that they would need to secure independent counsel on the issue of apportionment. Suit was then initiated by the grand-
mother, Mrs. Scamardella, who now disavowed giving authority to settle the case and attacked her prior counsel for a conflict of interest under The Maryland Lawyers’ Rules of Professional Conduct Rule 1.8 (g) which states: A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients . . . unless each client consents after consultation, including disclosure of the existence and nature of all the claims . . . involved and of participation of each person in the settlement. Mrs. Scamardella argued that the case
could not be settled under The Maryland Lawyers’ Rules of Professional Conduct Rule 1.8 (g) without disclosing to each party “the participation of each party in the settlement” which she interpreted as
5
The Maryland Lawyers Rules of Profession- al Conduct Rule 1.8 (g) is adopted verbatim from the American Bar Association Model Rules of Professional Conduct.
16
meaning the specific sum they would receive.5
In other words, in the absence
of a specific agreement among all the beneficiaries, no settlement, even for the policy limits with an agreement to apportion later or submit the case to the court, could be made. The Court of Appeals distinguished the case holdings from other jurisdictions interpreting Rule 1.8 (g) by noting that most cases decided under this Rule dealt with the failure to obtain consent, not the scope of the disclosure. An important factor in the decision upholding the trial court’s decision finding no violation of Rule 1.8 (g) was the fact that the policy limits had been obtained: Another crucial distinction between the present case and all the others we have examined is that in this case the deficiency of disclosure did not result from a withholding of information but rather from a failure to formulate in advance the apportionment itself. This distinc- tion is admittedly rather fine. The appellants were left with an obvious uncertainty concerning apportion- ment when making their decision to consent to the settlement proposal. On the other hand, the very failure to formulate an apportionment preserved the representation from the major conflict of interest that occurs in aggregate settlement cases. In cases like the present one, where the maximum available settlement was reached, the apportionment of the settlement is exactly the locus of the conflict for the attorney: however much one party receives automatically means a detriment to the other party or parties. See North Carolina State Bar v. Whit- ted, 347 S.E.2d 60, 64 (N.C. Ct. App. 1986), aff ’d, 354 S.E.2d 501 (N.C. 1987); In re Guardianship of Lauderdale, 549 P.2d 42, 45-46 (Wash. Ct. App. 1976). If the mul- tiple representation is to continue, this conflict may be resolved only by the consent of all the parties, fully informed as to the apportionment of the settlement. In the present
Trial Reporter
case, when this particular conflict of interest arose the parties sought and obtained separate counsel, thus avoiding the conflict.
Scamardella, 126 Md. App. at 84-85. Mrs. Scamardella also argued that
The Maryland Lawyers’ Rules of Profes- sional Conduct Rule 1.8 (g) was violated since the agreement to apportion after settlement was nothing more than an unenforceable “agreement to agree” which was “void for vagueness.” This attack was likewise unsuccessful: In the present case, the agreement as to apportionment of the settlement required the parties to attempt to agree on a division and, failing that, to submit the problem to the court. When the parties failed to agree on an apportionment, the ques- tion was submitted to the court. Neither party disputes, and it is established, that the authority to divide the proceeds of a settlement is within the discretionary powers of the trial court, Jones v. Jones 259 Md. 336, 343-44 (1970), and so there is no objection to the court as a proper arbiter of settlement apportionment as per the parties’ agreement. While the agreement as to apportionment of the settlement in this case may be unusual, we do not find it to be void for vagueness as an agreement to agree. There is a practical component of Scamardella that warrants discussion. In footnote 1 of the decision, the Court of Special Appeals set out the trial court’s apportionment of the wrongful death award: [fn 1] The allotments, prior to the subtraction of attorney fees, were as follows: Giuseppina Scamardella: $ 96,870.74
Estate of Gloria Illiano: $ 66,120.65
Fausto Illiano: $ 470,569.72
Sara Illiano: $ 616,438.89
7.75% 5.29%
37.65% 49.31%
Scamardella, 126 Md. App. at 96, n. 1. Fall 2008
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