Weinberg v. Gharai, 2010–CA–001134–MR.

• Citation: 338 S.W.3d 307,112 Fair Empl.Prac.Cas. (BNA) 43
• Decision Date: 15 April 2011
• Docket Number: No. 2010–CA–001134–MR.,2010–CA–001134–MR.
• Parties: David A. WEINBERG, d/b/a David A. Weinberg, P.S.C., Appellant,v.Fariba GHARAI, Appellee.
• Court: Kentucky Court of Appeals

338 S.W.3d 307

112 Fair Empl.Prac.Cas. (BNA) 43

David A. WEINBERG, d/b/a David A. Weinberg, P.S.C., Appellant,

v.Fariba GHARAI, Appellee.

No. 2010–CA–001134–MR.

Court of Appeals of Kentucky.

April 15, 2011.

David A. Weinberg, Lexington, KY, for appellant.Andrew J. Ruzicho, Lexington, KY, for appellee.Before TAYLOR, Chief Judge, CAPERTON and WINE; Judges.

OPINION

CAPERTON, Judge:

The Appellant, David A. Weinberg, d/b/a David A. Weinberg, P.S.C., appeals from the May 18, 2010 opinion and order of the Fayette Circuit Court denying his request for attorney fees in connection with his representation of the Appellee, Dr. Fariba Gharai. Having reviewed the record, the arguments of the parties, and the applicable law, we affirm.

On March 22, 2005, the parties entered into a contingency fee contract of employment, whereby Dr. Gharai employed Weinberg to litigate various claims that she had against the University Hospital of the Albert B. Chandler Medical Center, Inc., d/b/a College of Medicine, Chandler Medical Center, University of Kentucky; and Victor A. Ferraris. These claims included breach of contract, discrimination, and defamation, which occurred during Dr. Gharai's residency in cardiothoracic surgery. That contract provided as follows:

One-third (1/3) contingency fee of any and all monies recovered concerning the claims arising out of the above-specified employment. Any attorney's fees recovered as a result of said claims shall constitute a credit against the contingency fee. However, should the recovery of attorney's fees be less than the amount equal to one-third (1/3) of the recovery, Client shall be responsible for the difference. In the event of an appeal of a Judgment, either in favor of or against the client, the contingency fee set forth herein shall increase to forty percent (40%) of any recovery, subject, however, to the same terms and conditions set forth in the preceding paragraph.

Pursuant to the contract, Dr. Gharai had sole authority for determining the amount of any pre-suit settlement. The contract required Weinberg to obtain Dr. Gharai's permission and authority to settle for any specific amount.

Following several years of litigation, including a period of delay during which Weinberg had medical problems, the defendants filed a motion for summary judgment. The case was mediated, but settlement was not achieved. Accordingly, in response to a motion for summary judgment filed by the defendants below, the trial court held a hearing on April 24, 2009, wherein it orally sustained the motion and provided its reasons for doing so. Weinberg called Dr. Gharai that evening and left a message informing her of the court's ruling. On April 26, 2009, Dr. Gharai returned Weinberg's call and, during that conversation Weinberg advised Dr. Gharai of her options in response to the Court's ruling, including the timeframe associated with those options, which he stated were to either “drop the case” or “appeal.” ¹

Weinberg and Dr. Gharai had a difference of opinion regarding the terms of Weinberg's employment contract with respect to appeals. Weinberg testified during the hearing below that the contingency contract provision did not include appealing a “summary judgment dismissal” by the Court, but only covered an appeal resulting from a trial on the merits. Weinberg admitted in testimony that he had “no recollection” that the distinction between summary judgment and a judgment on the merits for appeal purposes under the contract was discussed with Dr. Gharai at the time the contract was entered into by the parties. Weinberg further testified that he believed his services were completed under the contingency fee contract following the court's entry of summary judgment, and that he was permitted to renegotiate the contract.² Dr. Gharai testified that the first time she heard about this distinction between an appeal from summary judgment, and an appeal from a jury verdict on the merits, was after the case was dismissed.

Weinberg asserts that, with respect to his assertion that the contract referred only to an appeal of a jury verdict, he consulted with outside counsel and was advised that the contract did not automatically require him to defend or prosecute an appeal. Weinberg states that, since a summary judgment was granted rather than a judgment following a trial, he was entitled to negotiate a contract for his services on appeal. Weinberg also states that he discussed as much with Dr. Gharai and sent a follow-up letter dated April 27, 2009, outlining the conversation and terms of employment for prosecuting an appeal. This included his request for a $20,000 retainer prior to filing the Notice of Appeal.

On May 6, 2009, Dr. Gharai sent Weinberg an e-mail acknowledging receipt of his April 27, 2009 letter. Therein, Dr. Gharai stated her belief that the contract did not provide for any retainer on appeal, and cited the contract language within the e-mail as follows:

“In the event of an appeal of a judgment, either in favor of or against the client, the contingency fee set forth herein shall increase to forty percent (40%) of any recovery, subject to the same terms and conditions set forth in the preceding paragraph.” I am very confused? ? ? Any advise (sic) since we are running out of time?

See Hearing Exhibit 5; Finding of Fact No. 11; Transcript, pp. 55–6.

Weinberg states that during the time following the sending of the letter, he received the court's May 4, 2009 order of summary judgment in the case. At that time, he had a phone conversation with Dr. Gharai in which the two again discussed his fee arrangement for an appeal. Weinberg states that at the conclusion of that conversation, his employment for purposes of filing an appeal was still in question.

Dr. Gharai requested a conference call between herself, Weinberg, and her fiancé, Dr. Fields,³ which took place on May 13, 2009. Dr. Gharai testified that she requested this conference call for the purpose of obtaining Fields' opinion on Weinberg's demand for a $20,000 retainer. During that conference call, Weinberg again repeated his request for payment of the retainer prior to filing a notice of appeal. Both Drs. Gharai and Fields testified at the hearing that Weinberg stated he could not continue representing Dr. Gharai on appeal without the retainer. Fields testified that he told Weinberg that Weinberg was breaching the contract and that it would be difficult for Dr. Gharai to find another attorney within the time constraints. According to Fields, Weinberg said that he was not obligated to take the case to appellate court. Fields agreed, but states that he told Weinberg that if he did not do so, then he would not be entitled to a fee and would be voiding the contract.

Following the call, Dr. Gharai refused to pay the retainer and Weinberg refused to withdraw his demand for it. Subsequently, on May 15, 2009, Weinberg sent a letter to Dr. Gharai, stressing the importance of meeting the appeal deadline and stating that, “Any attorney you select should be aware of this.” In the same letter, Weinberg stated, “I wish you the best, not only in this matter, but in all your professional and personal endeavors. As you stated, let's keep in touch and if you need anything, please feel free to contact me.” Dr. Gharai testified that she interpreted this letter as “good luck in the case,” and felt that she had no choice but to seek out another attorney to handle the appeal. Dr. Gharai also testified that had Weinberg honored their contract, she would have welcomed his continued representation.

Sometime thereafter, Weinberg received a call from Leslie Dean advising that she had been retained by Dr. Gharai to prosecute an appeal. On May 23, 2009, Dean sent Weinberg a copy of the Notice of Appeal, Entry of Appearance, Designation of Record, and Case History. Dean subsequently had major surgery which necessitated the retaining of new counsel. Accordingly, Dr. Gharai then retained present counsel, Andrew Ruzicho.

On May 29, 2009, Weinberg received an e-mail from Dr. Gharai, formally notifying him that Andrew Ruzicho was replacing Leslie Dean as her attorney. On that same day, Ruzicho sent an e-mail to Weinberg advising that he was replacing Dean as Dr. Gharai's attorney. In response, Weinberg filed his Notice of Withdrawal and Attorney's Lien on June 3, 2009, certifying a copy to Ruzicho. On June 12, 2009, after retaining the services of Ruzicho and after the filing of Weinberg's attorney's lien, Dr. Gharai sent Weinberg a certified letter notifying him that she had hired Ruzicho. There was no reference in that letter indicating that Dr. Gharai was objecting to, or would be objecting to, Weinberg's lien. On June 17, 2009, Ruzicho filed his entry of appearance in this matter.

On July 7, 2009, in response to a handwritten request from Ruzicho, Weinberg sent Ruzicho a letter including documents requested in connection with the case. Prior to reaching the final settlement, at Ruzicho's request, an office conference between him and Weinberg was held on September 9, 2009. Subsequent to that conference, Ruzicho and Weinberg exchanged e-mails regarding potential settlement of Weinberg's claim for attorney fees. Thereafter, on January 6, 2010, another meeting was held at Weinberg's office, at Ruzicho's request. At that time, Ruzicho presented Weinberg with a Letter of Agreement regarding Weinberg's claim for the attorney fees. The Agreement was modified and initialed, and provided that one third of any amount recovered on behalf of Dr. Gharai during the appeal be placed in Ruzicho's escrow account.

Following approximately five months of negotiations with the defendants below, Ruzicho and Dr. Gharai negotiated a $200,000 settlement of the case on January 29, 2010, and also reached an agreement on future references regarding Dr. Gharai in order to minimize any adverse effect upon her career.⁴ Upon notice of the settlement, Weinberg filed a motion for hearing on ...