KANSAS CITY, Mo. (Legal Newsline) – A personal injury lawyer lied to his former partners about the value of some of his pending claims when negotiating a split, a Missouri court has ruled.
On July 7, the Missouri Court of Appeals’ Western District affirmed a penalty of more than $427,000 against Stephen Holaday, who was ruled to have misled the partners at his former firm about how much insurance coverage was available on two pending cases.
“It may well be that, if Holaday had dealt in good faith with Respondent, he would have received a greater share of the Doe and Smith fees,” says the decision, written by Judge Lisa White Hartwick.
“He chose, however, to engage in deception and dishonesty and must now face the consequences of that choice.”
Holaday joined forces with Lee Tieman and John Spencer to create Tieman, Spencer, Holaday & Hicks in 2014. The three men agreed to split evenly the profits of the firm.
Two years earlier, Holaday and his former firm concluded mediation in a dispute over fees from his time there.
The situation played out again when Holaday planned his 2015 departure from TSHH because of two of his 58 contingency fee cases.
The men agreed to split anticipated contingency fees in 10 cases after Holaday left the firm.
In one of Holaday’s cases, a man riding a motorcycle was injured when a drunk driver attempted an illegal U-turn and collided with him. The driver had a coverage limit of $250,000 and an umbrella policy with an additional $1 million.
During a meeting, Holaday told Spencer that the liability insurance limit on that case was only $50,000. Because of this, Spencer did not include it among the cases included in the fee-splitting agreement.
In another lawsuit, a man was sucked through a 140-foot drainage tube and nearly lost his arm, leading to an 18-day hospital stay. The farm where it happened had a $1 million coverage limit.
When Spencer asked Holaday if any other cases had a possibility of fees higher than $75,000, he left out this case.
Ultimately, Holaday settled the motorcycle case for $1.25 million and the farm case for $500,000. He netted $641,666.66. The court found that he owed each of his former partners their one-third shares, leaving about $214,000 for Holaday after the paycut.