Can a lawyer take a contingent fee to attack a divorce property settlement in a separate action after the divorce?

Plain-English summary

The Committee considered whether, where a property settlement agreement had not been merged into the divorce decree, a lawyer could represent a spouse on a contingent-fee basis in an independent action to rescind that agreement and seek a greater share of the community property. It concluded the lawyer could not.

SCR 155(4) barred a lawyer from charging a fee in a domestic-relations matter that is contingent on securing a divorce or on the amount of alimony, support, or property settlement in lieu thereof. The Committee acknowledged that, read literally, the rule appeared to reach property settlements only when they stand in lieu of an action for divorce, alimony, or support, and that a non-merged agreement is an independent contract enforceable or challengeable like other contracts (citing Gilbert v. Warren). But it reasoned that property settlements are usually intertwined with alimony and support, and that an attack on such an agreement is in substance a domestic-relations action seeking to change the parties' settlement of those amounts.

Relying on Meyers v. Handlon, where the Indiana Court of Appeals voided a contingent-fee contract for post-decree marital-property litigation, the Committee identified the public-policy reasons against contingent fees in divorce-related cases: the state's interest in promoting marriage and not giving lawyers a financial stake in divorce or in hindering reconciliation; the incentive a contingent fee creates to delay or to seek bifurcation for tactical advantage; the absence of the all-or-nothing risk that justifies contingent fees, since each spouse generally has a statutory right to an equitable share and possible fee award; and the risk that an undisclosed contingent fee could frustrate the court's duty to provide an equitable settlement and support for children or a disabled spouse. The Committee therefore read SCR 155 to prohibit contingent fees not only in the original divorce action but in any later independent action seeking to alter alimony, support, or the enforceability of a related property settlement.

Currency note

This opinion was issued in 1993, before Nevada's 2006 adoption of the current Nevada Rules of Professional Conduct (the renumbered Rules 1.0 et seq. that replaced the former Supreme Court Rules) and the related Ethics 2000-based revisions. The fee rule, including the bar on contingent fees in domestic-relations matters, is now Rule 1.5 (with the domestic-relations and criminal-case prohibition at Rule 1.5(d)). Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Common questions

Q: Can a lawyer use a contingent fee to challenge a divorce property settlement after the divorce is final?

A: No. The opinion concluded that SCR 155 bars contingent fees not only in the original divorce action but in any later independent action seeking to alter alimony, support, or the enforceability of a related property settlement agreement.

Q: Does it matter that the settlement agreement was not merged into the decree?

A: No. The opinion acknowledged a non-merged agreement is an independent contract, but it held that an action to attack it is still in substance a domestic-relations matter, so the contingent-fee ban applies.

Q: Why are contingent fees disfavored in divorce-related matters?

A: Per the opinion (following Meyers v. Handlon), reasons include the state's interest in promoting marriage and not giving lawyers a stake in divorce, the incentive to delay or seek bifurcation, the absence of the all-or-nothing risk that justifies contingent fees, and the risk of frustrating the court's duty to provide an equitable settlement and support.

Background and rules framework

The opinion interprets former SCR 155 (reasonableness of fees, based on ABA Model Rule 1.5), specifically SCR 155(4)'s prohibition on contingent fees in domestic-relations matters, reading that subsection in light of its public-policy purpose rather than its literal scope.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / former Nev. SCR 155 (reasonableness of fees; bar on contingent fees in domestic-relations matters)

Cases:

• Meyers v. Handlon, 479 N.E.2d 106 (Ind. Ct. App. 1985) (voiding a contingent fee for post-decree marital-property litigation)
• Gilbert v. Warren, 95 Nev. 296, 594 P.2d 696 (1979) (non-merged settlement is an independent contract)
• Daniel v. Baker, 106 Nev. 412, 794 P.2d 345 (1990) (court must consider a spouse's wealth in awarding alimony)

See also

• NV Ethics Op. 15: non-refundable retainer agreements
• NV Ethics Op. 4: percentage-of-hourly-rate fee arrangement

Source

• Landing page: https://nvbar.org/for-lawyers/ethics-discipline/ethics-opinions/
• Original PDF: https://nvbar.org/wp-content/uploads/opinion_16.pdf