Nowell v. Dick, 24975.

• Decision Date: 28 October 1969
• Docket Number: No. 24975.,24975.
• Citation: 413 F.2d 1204
• Parties: Ames NOWELL, Appellant, v. Alexander C. DICK, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

413 F.2d 1204 (1969)

Ames NOWELL, Appellant, v. Alexander C. DICK, Appellee.

No. 24975.

United States Court of Appeals Fifth Circuit.

August 4, 1969.

Rehearing Denied October 28, 1969.

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Charles O. Shields, Anderson, Henley, Shields, Bradford & Pritchard, Dallas, Tex., for appellant.

William A. McKenzie, Allen Joe Fish, McKenzie & Baer, Dallas, Tex., for appellee.

Before JONES and COLEMAN, Circuit Judges, and CHOATE, District Judge.

COLEMAN, Circuit Judge:

Ames Nowell appeals from a judgment against him for attorney fees. We affirm the judgment of the District Court.

In April, 1964, Ames Nowell, a Texas resident, engaged Alexander Dick, a New York lawyer, to perform certain legal services regarding a Connecticut suit in which Nowell's wife sought a legal separation. Nowell's original counsel had previously withdrawn from the case.

At the time Dick was retained by Nowell, he was told that Nowell had no funds, but on learning that Nowell was the beneficiary of a substantial trust Dick agreed to take compensation at a later date. Dick employed local Connecticut counsel to aid him in the marital litigation and guaranteed payment of their fees. Countering the separation suit, Dick instituted suit against Mrs. Nowell on behalf of the Peregrine White Sanctuary Corporation, a corporation owned by Nowell. The purpose of the suit was to obtain possession of chattels which had been assigned to the corporation by tendering payment on a note given by the corporation to Nowell and then to Mrs. Nowell.

Between April and September, 1964, Nowell discussed with Dick the fact that he wanted to obtain more money from the "Ames Nowell Trust", of which he was beneficiary and co-trustee. Mr. Dick was retained to determine a way that more income could be taken from the trust. He developed a plan whereby certain dividends and capital gains would be treated as income rather than corpus. At Nowell's request, the plan was never put into effect.

For some reason, involving the desire to keep the assets of the trust from his wife, Nowell desired Dick to investigate the possibility of removing the Ames Nowell Trust from Massachusetts to Texas. Suits were filed in both states by Mr. Dick. When Mrs. Nowell learned of this, she obtained a Connecticut injunction against removal of the trust. Nevertheless, in June, 1965, a Massachusetts Probate Court, upon getting an agreement from Nowell to substitute the First National Bank of Dallas, Texas, as the new trustee, consented to the removal.

Meanwhile, Nowell filed suit in Texas against his wife for annulment and filed a second suit for divorce. Mrs. Nowell obtained injunctions from the Connecticut court to prohibit the prosecution of these Texas suits. In these matters, Mr. Dick coordinated the activities of Connecticut and Texas counsel. In order to obtain the Texas divorce, Nowell asked Dick to stall the Connecticut litigation. Nowell also sought to delay implementation of a trust revocation and income plan to avoid Mrs. Nowell's claim that the income from the trust was community property. The delays were successful, and the Texas divorce was granted.

Nowell in April, 1964, had instituted suit to recover for whiplash injuries received by him and a friend in an automobile accident. Dick obtained experienced damage suit counsel and worked with him in the prosecution of the suit.

In addition to these matters, Dick prepared pleadings and trial memoranda in a suit (which was never brought) against Mrs. Nowell by the Veritas Institute, a wholly-owned Nowell corporation. Dick also spent time researching the propriety of revoking an alimony agreement which Nowell had with his second wife. He negotiated the reduction of attorney fees which Nowell owed another law firm.

In carrying out the above matters, Dick was employed by Nowell from April, 1964, to November, 1965. At this time, Nowell, expressing dissatisfaction with Dick's handling of his affairs, discharged Dick as his lawyer. Up until September, 1965, Dick had been paid only $2,500 for his services. At that time Nowell and his co-trustee petitioned a Texas court to have the Ames Nowell Trust pay Dick $50,000. The petition was granted. Out of this, Dick paid Connecticut counsel in excess of $17,000. Dick offered to accept the payment from the Trust as full settlement, if Nowell would agree to authorize action on the plans Dick had developed for getting income from the Trust, which would result in an additional $25,000 fee to Dick. This offer was never accepted.

Dick instituted suit in the Federal District Court in Texas to recover reasonable attorney fees for the services performed for Nowell over the eighteen month period. Dick asserted that he was entitled, on quantum meruit, to $100,000, and that his attorney in the suit for attorney fees, Mr. MacKenzie, was entitled to $20,000. Mayflower Trust Company, a wholly-owned Nowell corporation, was joined as co-defendant, alleged to be an alter ego of Nowell.¹

The jury returned a verdict for the plaintiff, awarding him $100,000 and awarding his counsel, Mr. MacKenzie, $20,000.²

Nowell argues that the judgment should be reversed for the following reasons: (1) the plaintiff failed to prove the necessary elements of his claim, the evidence was insufficient, the judgment was offensive to public policy, and it was excessive; (2) the Court erred in failing sufficiently to instruct the jury on the issues in the case; (3) the Court erred in including Mayflower Trust Company as a defendant until after the verdict, thus prejudicing the rights of the defendant, Nowell; (4) the appellant was denied a fair trial because of the reception into evidence of certain inflammatory matters; (5) the Court erred in failing to grant the defense motion for a change of venue to New York; and (6) the defendant was deprived of a fair trial because of the personal attack made on him by plaintiff's counsel during the closing argument.

I

The appellant's primary argument for reversal is that the jury verdict, awarding $120,000 in attorney fees was excessive and against the weight of the evidence.

The parties did not fix the amount of compensation by agreement. Thus, in his complaint, the plaintiff set out alternative theories of recovery: (1) a contractual agreement to pay a reasonable fee, and (2) quantum meruit.

It was established that Dick was employed by Nowell for eighteen months. During this time he handled several matters for Nowell. Although he did not actively participate in every phase of the various areas of litigation, but instead retained local counsel, he did oversee all of the matters during that period. Although Dick kept no time records as to the exact amount of time he worked for Nowell, he testified that for eighteen months he worked Saturdays, Sundays, and evenings, that he spent as much as 90% of his time, or practically all of his time, professionally representing and in behalf of Nowell.

The appellant's chief complaint is that the Court erred in failing to instruct the jury that the plaintiff could recover only on quantum meruit.

New York law apparently applies to this issue. The attorney-client relationship arose in that state and the vast majority of the attorney's work took place there.

In one instance, a Texas client employed a New York attorney to represent him in New York litigation and then a dispute arose as to attorney fees. A New York court, pursuant to a statute, fixed a lien on the client's property. To determine his right to a fee, the attorney sued in a Texas federal court. This Court, in reviewing the district court, said:

"We do not doubt therefore that by his employment of counsel and the institution of suit in the Court in New York the appellant became subject to the statutes of New York regulating and controlling the attorney-client relationship with reference to the fixing and enforcing of the respective rights between the parties." Hoxsey v. Hoffpauir, 5 Cir., 1950, 180 F.2d 84, 86.

Following New York law, it has been held that a client's "right" to discharge his attorney at any time is an inherent term in the employment contract and, as a result, the attorney can recover only on quantum meruit. Martin v. Camp, 219 N.Y. 170, 114 N.E. 46, L.R.A.1917F, 402. The quantum meruit recovery is not, however, restricted to the contract limitations. In re Montgomery's Estate, 272 N.Y. 323, 6 N.E. 2d 40, 109 A.L.R. 669 (1936); see, also Schwartz v. Broadcast Music, Inc., S.D. N.Y., 1955, 130 F.Supp. 956. But even if Texas law is said to apply, the result is the same. If an attorney is discharged, he can recover in quantum meruit and is not limited by the terms of the contract. Thompson v. Smith, 248 S.W. 1070 (Com.App., adopted by Texas Supreme Court 1923).

While it is true that the trial judge at no time used the phrase "quantum meruit" in instructing the jury, she repeatedly spoke of the "reasonable" value of the services for which the plaintiff sought to recover. This instruction is consistent with Kline v. Blackwell, 5 Cir., 1933, 63 F.2d 897, where we held that when an attorney is employed to render services without an agreement as to fee, he is entitled to recover "reasonable compensation".

The appellant next contends that the verdict was excessive and cannot stand. In reviewing the jury's finding here, the appellate court is bound by the rule that it cannot re-weigh the evidence and set aside a jury verdict merely because the jury could have drawn different conclusions or because the court feels other results would have been more reasonable. Tennant v. Peoria & P. U. Ry. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L. Ed. 520 (1944). In reviewing a determination of attorney fees, this Court followed Tennant:

"This brings us to the only real question of substance — whether the jury verdict for $80,000 was reasonable or so excessive as to be without foundation. In assaying this, it must be remembered that we are dealing with

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