Belli v. Shaw

• Decision Date: 13 January 1983
• Docket Number: No. 48084-2,48084-2
• Parties: Melvin M. BELLI, Petitioner, v. Donald R. SHAW and Patricia Shaw, husband and wife; and Walter B. Dauber and Joan Dauber, husband and wife, Respondents.
• Court: Washington Supreme Court

Page 569

98 Wn.2d 569

657 P.2d 315

Melvin M. BELLI, Petitioner, v. Donald R. SHAW and Patricia Shaw, husband and wife; and Walter B. Dauber and Joan Dauber, husband and wife, Respondents.

No. 48084-2.

Supreme Court of Washington En Banc.

Jan. 13, 1983.

James Hurley, Yakima, for petitioner.

John Gavin, Rodney Smith, Yakima, Law Offices of Melvin Belli, Daniel Smith, San Francisco, Cal., for respondents.

PEARSON, Justice.

Plaintiff Melvin Belli appeals a Court of Appeals decision affirming a judgment notwithstanding the verdict in his action for attorney fees. Plaintiff brought this action in 1977 against defendants, partners in a Yakima law firm, claiming $50,000 in attorney fees pursuant to a fee agreement allegedly made in 1959 with J.P. Tonkoff, a former partner in the Yakima firm. The jury awarded plaintiff $50,000, but the trial court entered judgment notwithstanding the verdict. The court concluded as a matter of law there was not sufficient evidence of a fee agreement which would entitle plaintiff to recover fees from defendants. The only issue before us is predominantly factual: Whether the record contains sufficient evidence to support the trial court's judgment notwithstanding the verdict. We affirm. 29 Wash.App. 875, 631 P.2d 980.

On May 11, 1959, a newspaper in Phoenix, Arizona, published an article critical of Wade Church, Attorney General of Arizona at that time. Shortly thereafter, Church met with plaintiff to discuss bringing a defamation action against the newspaper. Plaintiff suggested to Church that J.P. Tonkoff, an attorney from Yakima, be associated with plaintiff on the case. In December 1959, Church agreed to a contingent fee arrangement whereby he would pay one-third of any recovery as attorney fees. These fees were to be shared equally among plaintiff, Tonkoff, and an Arizona attorney to be appointed to research Arizona law. In October 1960, Philip Goldstein, an attorney in Phoenix, Arizona, was associated as local counsel.

The record indicates that most of the preparation for the trial was the work of Goldstein and Tonkoff. In March and April 1961, plaintiff's office manager requested from Goldstein status reports on the Church litigation. On April 10, 1961, the office manager wrote:

Would you please let us know whether you have continued this case or whether or not Mr. Belli is still a participant in it so that we can close our file if the matter is dead.

Goldstein responded that as far as Church was concerned Belli was still a participating attorney. The case was set for trial, but was rescheduled several times because of Belli's conflicting trial calendar. On April 10, 1963, Belli wrote Goldstein: "If you can put the case over, I will try it ... If you can't put it over, you will have to count me out." The trial began on April 29, 1963. Belli did not attend the trial, but sent his partner, Richard Gerry. Gerry was instructed by Belli that if Goldstein and Tonkoff tried the case, he was not to sit in on the case with them. Realizing that Goldstein and Tonkoff had the case prepared for trial, Gerry left Phoenix.

The jury returned a verdict for Church in the amount of $50,000. The defendant newspaper appealed. On November 24, 1968, the Supreme Court of Arizona reversed the trial court's decision and remanded the case for a new trial.

Belli testified in the present case that from 1963 through 1968 he made no offers of advice or citations of authority to either of the two participating attorneys. Correspondence between Goldstein and Tonkoff with Church continued. On May 10, 1967, Tonkoff wrote to Goldstein advising him of the status of the Church case:

At the time I was introduced to this case and requested to sit in with Mel, Mel advised me that he had a contingent fee contract with Wade [Church] for one-third and that Wade would secure his own local counsel. This, of course, has been altogether abrogated since you and I have done all of the work.

I am enclosing a copy of my contingent fee contract which provides for one-third if the case is not appealed and 40% if appealed and client pays all of the out-of-pocket expenses ...

Whatever your judgment is, I will be entirely satisfied. I don't know how we are going to handle the Belli situation, but we will talk about that later.

The record contains no indication that Belli and Tonkoff ever discussed this new fee arrangement.

On January 2, 1974, Goldstein wrote to Belli informing him of the new arrangements:

Shortly prior to commencement of the second trial, in the Spring of 1971, Church, Peter and I discussed arriving at a firm financial arrangement. At that time it was agreed that Church would pay a 40% contingent fee on the gross amount recovered to Peter and myself, plus reimburse our office for the costs advanced. Peter and I, in turn, agreed to share equally in the fee, if paid. At that time, there was no discussion regarding the payment of any fee to your office, except Pete's remarking that he would talk to you at some future date.

On January 15, 1974, Belli's office manager, on Belli's behalf, responded to Goldstein's letter concerning the new agreement between Goldstein, Tonkoff, and Church and explained, "we had an arrangement with Peter Tonkoff of 1/3 forwarding fee on any cases between us."

In neither the correspondence admitted into evidence nor his testimony in the present case does Belli dispute the existence of the new fee agreement between Church, Goldstein, and Tonkoff. Plaintiff testified, however, that the usual one-third forwarding fee arrangement referred to in the letter of January 15, 1974, was modified in the Church case to provide plaintiff with a one-half forwarding fee.

In June 1971, after the second trial, the jury awarded Church damages of $485,000. Neither Belli nor any of his associates took part in this second trial or the subsequent appeals.

In 1976, after the defendant newspaper had exhausted its appeals, Goldstein received a check for $625,872 in satisfaction of the judgment, plus interest. From this sum, $253,000 was deducted for attorney fees. Goldstein kept $153,000 pursuant to his agreement with Tonkoff's law firm. The remaining $100,000 was sent to Donald Shaw and Walt Dauber, surviving partners of the now deceased Tonkoff.

In May 1976, Church sent Goldstein a release of judgment. Church signed this release on the condition that one-half of the attorney fees be set aside until there was a "complete release from the estate of Peter Tonkoff and/or Mel Belli," and on the additional condition that Goldstein hold Church harmless from payment of any additional attorney fees.

In 1977, in an action against Goldstein for attorney fees from the Church defamation action, plaintiff stipulated that:

Melvin M. Belli makes no claim against Philip T. Goldstein or against Wade Church for the attorney's fees which are the subject of this action.

It is further stipulated that this stipulation will not prejudice or in any way affect any claim Melvin M. Belli may have against Walter B. Dauber and/or Donald R. Shaw for their share of the attorney's fees which are the subject of this action.

Belli claimed 50 percent of the $100,000 paid to Tonkoff's firm. Shaw refused to pay, and Belli brought this action to recover the $50,000.

The jury returned a verdict for Belli in the amount of $50,000. The trial court granted judgment notwithstanding the verdict, holding there was insufficient evidence, as a matter of law, that a contract existed between Tonkoff and Belli relating to the distribution of attorney fees.

The trial court also determined that even if such an agreement existed between Belli and Tonkoff, it could only be a "referral" or "finder fee" which would not be enforced by Washington courts. On appeal, this decision was affirmed by Division III in Belli v. Shaw, 29 Wash.App. 875, 631 P.2d 980 (1981).

We articulated the standard of review that we apply to judgments notwithstanding the jury's verdict in Hojem v. Kelly, 93 Wash.2d 143, 145, 606 P.2d 275 (1980).

A motion for a judgment n.o.v. should not be granted unless the court can say, as a matter of law, that there is neither evidence nor reasonable inference therefrom sufficient to sustain the verdict. All evidence must be viewed in the light most favorable to the party against whom the motion is made. Grange v. Finlay, 58 Wn.2d 528, 364 P.2d 234 (1961). There must be "substantial evidence" as distinguished from a "mere scintilla" of evidence, to support the verdict--i.e., evidence of a character "which would convince an unprejudiced, thinking mind of the truth of the fact to which the evidence is directed." A verdict cannot be founded on mere theory or speculation. Arnold v. Sanstol, 43 Wash.2d 94, 98, 260 P.2d 327 (1953).

This is the standard we apply in the case before us. We must determine whether there is "substantial evidence" from which the jury could have concluded that defendant had an enforceable agreement under which he was entitled to share in the fees from the Church defamation case. The task is not easy, for the history of nearly 20 years of litigation must be pieced together from plaintiff's testimony and from the correspondence and other papers culled from the files of several attorneys. In all this material, however, we find no substantial evidence to sustain the jury's verdict; no evidence, nor even any reasonable inference therefrom, suggests that plaintiff had an enforceable fee agreement at the time he began this suit.

There is undisputed evidence that in December 1959 Church agreed to a contingent fee arrangement whereby he would pay one-third of any recovery as attorney fees. These fees were to be shared equally among plaintiff, Tonkoff, and an Arizona attorney to be associated at a later date. Goldstein was associated as local counsel in 1960. The fee arrangement between Church and plaintiff, Tonkoff, and Goldstein continued in effect at least until the conclusion of the first trial in 1963.

Plain...