graves and tulleners and crater lake and legal ethics

At first and second blush this case seems to have nothing to do with legal ethics. As you scratch beneath the surface of it, however, it has everything to do with ethics. I know, because I was on this case (and thrown off of it) about four or five years ago when I was practicing law in a large firm in Portland. I will reveal nothing here that isn't in publicly-available documents, but I will tell you the story of this case so that you will see some of its sad dimensions. The Oregon Court of Appeals just handed down its decision in this case last week, upholding the lower court's decision and handing a loss to the client of my former firm.

Setting out Some Facts

The case has to do with allocation of the proceeds of a wrongful death cause of action. As with many very complex cases, the factual particulars that started this one are very simple. On his 45th birthday (1995), Edward Tulleners decided to hire a helicopter to fly him from Oregon to Las Vegas via Crater Lake, in Southern Oregon. For whatever reason, the helicopter crashed into the lake. A wrongful death action was filed in 1996 and it went to trial about a year or so after that. The trial had fascinating twists and turns but, to make a long story short, it eventuated in a jury verdict of about $28 million for the estate of Edward Tulleners. Ah, the estate of Tulleners. He didn't have a valid will at the time of the crash, and so the assets of his estate would pass by intestate succession to his next of kin. This happened to be a teenage daughter (Graves). Of course, with an award of that magnitude we could be sure that an appeal would happen, and so the decision was appealed to the 9th Circuit (the case was in federal court based on diversity jurisdiction), which affirmed the lower court ruling in 1999.

Between the time of trial in 1997 and the confirmation of the award in 1999, the daughter, who stood to gain most if not all of the award, felt an economic pinch, and decided to enter into an agreement with her grandmother (the mother of the deceased) to divide the proceeds of the award 80/20. That is, the daughter would get 80% and the grandmother would receive 20% of the proceeds. Actually, of course, things are more complex than this: Graves first proposed that she get 90% and grandma receive 10%, but the personal representative of Graves' father's estate suggested a 75%/25% split, and they agreed on 80/20. Now, we also have to be aware that the attorneys in the wrongful death action would get a bundle, and so they did. They entered into a contingent fee agreement with the estate of Tulleners to get approximately 25% of the proceeds. Thus, when the terms of the settlement agreement were all worked out in mid-1999, it showed something like the following. The total recovery was about $28,000,000. Attorneys got about $5,500,000. The daughter got about $18,300,000. Grandma got about $4,200,000. Although there were hard feelings between the daughter and the personal representative of her father's estate (who happened to be her uncle), everyone at first seemed to be satisfied with the division of the proceeds. In fact, Graves had an attorney represent her interests throughout the trial and subsequent appeals, though he wasn't "in" on the conversation between Graves and the personal representative where the 80/20 agreement was reached.

Thus, in sum, by mid-1999 we have a verdict that has been affirmed by the 9th Circuit, and we have a payout. The daughter, who is now turning 19, has $18,300,000 jingling in her pocket; grandma, who is in her mid-80s, with scads of grandchildren, is sitting on $4,200,000 and the lead lawyer for the plaintiff in the underlying case has taken his money and retired. The case should have ended here, but this is where my old law firm got involved.

Enter Stoel Rives

A few years after all were swimming in their money, the daughter, now in her early 20s, came to my firm to ask for help on an issue unrelated to the settlement. For whatever reason, the attorney to whom she went decided to tell Graves that the terms of the settlement agreement were contrary to Oregon wrongful death law and that, in fact, she should have received the entire proceeds of the estate. I am not sure about his precise advice, but the previous line was taken from the Court of Appeals decision. In fact, he couldn't have meant that the entire award should go to the daughter, because that would also have left the attorneys out in the cold. I think what the Court of Appeals must have meant (and what my colleague at Stoel Rives actually suggested) was that Graves was entitled to grandma's portion under the law. And, in good lawyerly fashion, he naturally asserted that since she had a right to the additional $4,200,000 as a matter of law, we at Stoel Rives would be happy to represent her in getting back that amount of money. The girl, now about 21, decided to sign up with us, and we would do everything in our mighty power to make grandma cough up the $4,200,000 which she was awarded by terms of the settlement agreement in 1999.

Let's just stop here for a moment. I guess I really don't need to say much of anything other than that the assumption with which my firm took the case is that the daughter ought not to be satisfied with $18,400,000, and that it was worthwhile to send the family through an additional convulsion of legally-enforced grief in order to get "justice" done.

This is where I entered the picture. Read the next essay to see what happened.

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