Hirschkop & Grad, P.C. v. Robinson, s. 84-1143
| Decision Date | 17 April 1985 |
| Docket Number | 84-1193,Nos. 84-1143,s. 84-1143 |
| Citation | 757 F.2d 1499 |
| Parties | HIRSCHKOP & GRAD, P.C., Appellee, v. Arthur ROBINSON, Laurelee Robinson, Appellants. HIRSCHKOP & GRAD, P.C., Appellant, v. Arthur ROBINSON, Laurelee Robinson, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Bernard J. DiMuro, Alexandria, Va. (Philip J. Hirschkop, Hirschkop & Grad, P.C., Alexandria, Va., on brief), for appellant/cross-appellee.
Allen H. Sachsel, Falls Church, Va. (Stephen A. Armstrong, Falls Church, Va., on brief), for appellees/cross-appellants.
Before WINTER, Chief Judge, HALL and ERVIN, Circuit Judges.
In this diversity action, Hirschkop and Grad, P.C., a Virginia law firm, appeals from an order of the district court denying it attorney's fees and lost profits in its breach of contract action against Arthur and Laurelee Robinson (the Robinsons), residents and citizens of Oregon. The Robinsons cross-appeal from the district court's order declaring default judgment against them. We affirm.
Hirschkop and Grad represented the Robinsons from 1980 until February, 1983, in litigation in the state courts of California against the Linus Pauling Institute and others connected with the Pauling Institute. In February, 1983, Hirschkop and Grad settled all of the Robinsons' cases for $575,000 to be paid over a sixteen-month period.
Hirschkop and Grad claims that to facilitate this settlement, it agreed to accept a reduced fee from the Robinsons and to release the Robinsons as to the full fee owed counsel. The law firm further claims that the Robinsons agreed to execute releases regarding any claims they might have against the firm arising out of the Pauling Institute cases. According to Hirschkop and Grad, the parties also agreed to execute the necessary papers to appoint a third-party fiduciary who would accept the monthly settlement checks and forward the respective shares of the proceeds over the sixteen-month period. The Robinsons deny reaching any agreement to release Hirschkop and Grad. The Robinsons did, however, make payments to the law firm until July, 1983.
On July 8, 1983, the Robinsons filed a malpractice action in California against Hirschkop and Grad and two of its attorneys, arising out of their representation of the Robinsons in the Pauling Institute litigation. The Robinsons alleged, in part, that prior to trial of the Pauling Institute litigation, Phillip Hirschkop, a partner of the law firm, improperly threatened to withdraw from the Pauling Institute cases unless he were paid $170,000. The Robinsons claimed that they settled the litigation for $575,000 because of the untenable situation in which this placed them.
Shortly thereafter, in August, 1983, Hirschkop and Grad instituted the present action against the Robinsons in federal district court sitting in Virginia. The complaint sought declaratory and injunctive relief against the Robinsons, as well as damages. It alleged breach of contract and fraud, arising out of the Robinsons' failure to abide by the alleged release agreement and the alleged agreement to create a fiduciary account. The law firm sought personal jurisdiction over the Robinsons under Virginia's long-arm statute. It mailed the Robinsons a copy of the complaint by certified mail and served the Secretary of the Commonwealth of Virginia with a copy of the action. The Secretary of the Commonwealth also sent the Robinsons a copy by certified mail. When the Robinsons failed to respond, Hirschkop and Grad moved for default judgment.
An evidentiary hearing was held at which Arthur Robinson testified. According to Robinson, he had not picked up the certified letters mailed to him from Virginia because he had been advised by his California counsel to forward to the attorney any mail which could have contained harassing communications from Hirschkop and Grad. Following the hearing, the district court found that it had personal jurisdiction over the Robinsons and ordered entry of default judgment against them.
The district court further found that Hirschkop and Grad had rendered legal services to the Robinsons and that the Robinsons had agreed to compensate the law firm for those services. Taking the factual allegations contained in Hirschkop and Grad's complaint as true, the district court declared that the contract between the parties pertaining to the payment of attorney's fees and the release of the law firm from liability was valid. The court awarded Hirschkop and Grad the payments, plus interest, due the law firm out of the Pauling Institute payments to the Robinsons, and it ordered the Robinsons to establish a trust for future Pauling Institute payments. The district court awarded costs of $2,846.19 against the Robinsons, but denied the law firm's request for additional attorney's fees and lost profits arising out of its defense of the California malpractice action.
Hirschkop and Grad and the Robinsons both moved for reconsideration. Hirschkop and Grad sought reconsideration of the district court's denial of attorney's fees and lost profits. The Robinsons moved to have the default judgment vacated or, in the alternative, to have the judgment altered or amended to delete the declaratory relief which they contended decided rights already being litigated between the same parties in the California state courts. The district court denied both motions. This appeal and cross-appeal followed.
On appeal, Hirschkop and Grad maintains that the district court erred in denying its request for attorney's fees and lost profits. The Robinsons, on cross-appeal, assert that the district court erred in finding in personam jurisdiction over them under Virginia's long-arm statute, in concluding that they were validly served with process, 1 in entering default judgment against them, and in entertaining this action in light of the pending California litigation. We agree with the district court's disposition of all of these claims.
In denying Hirschkop and Grad's motion for reconsideration of the denial of attorney's fees and lost profits, the district court stated:
[T]here is no reason for me to even approach an award of attorney's fees or lost profits ... in this case. First, the damages are uncertain because the California action has not been concluded. And...
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