Chase v. Gilbert

• Decision Date: 04 November 1985
• Docket Number: Nos. 83-425, 83-489 and 83-490.,s. 83-425, 83-489 and 83-490.
• Citation: 499 A.2d 1203
• Parties: Seymour M. CHASE, Appellant, v. Milton A. GILBERT, et al., Appellees. Milton A. GILBERT, et al., Appellants, v. Seymour M. CHASE, Appellee. GILBERT BROADCASTING CORP., Appellant, v. Seymour M. CHASE, et al., Appellees.
• Court: D.C. Court of Appeals

499 A.2d 1203

Seymour M. CHASE, Appellant, v. Milton A. GILBERT, et al., Appellees.

Milton A. GILBERT, et al., Appellants, v. Seymour M. CHASE, Appellee.

GILBERT BROADCASTING CORP., Appellant, v. Seymour M. CHASE, et al., Appellees.

Nos. 83-425, 83-489 and 83-490.

District of Columbia Court of Appeals.

Argued March 12, 1985.

Decided November 4, 1985.

Charles T. Duncan, Washington, D.C., for appellant.

Michael L. Denger, and David P. Durbin, Washington, D.C., with whom Edward J. Lopata, Washington, D.C., was on the brief, for appellees.

Before FERREN and ROGERS, Associate Judges, and PAIR, Senior Judge.

ROGERS, Associate Judge:

Appellant Seymour M. Chase appeals a judgment awarding him compensation for legal services rendered to Gilbert Broadcasting Corporation in connection with its application to the Federal Communications Commission for a radio license. Mr. Chase alleged that the corporation and its individual officers and directors are jointly and severally liable for delinquent attorney's fees of $187,004.27 pursuant to a fee agreement of July 1, 1975, as modified by a series of later agreements. The trial court found that the parties had agreed to an October 6, 1975, fee arrangement which covered the disputed claim of Mr. Chase for additional compensation in connection with the so-called ministers' issue, and that he was not entitled to recovery on the theory of quantum meruit. Since the October 6, 1975, agreement provided that Mr. Chase was to receive $60,000 plus disbursements, the trial court found that he was entitled to receive $70,484.88 and had received $67,889.14, and, therefore, entered judgment for $2,595.74. The court also dismissed cross-appellant's counterclaim for legal malpractice against Mr. Chase.¹

On appeal, Mr. Chase assigns as error the trial court's rulings that: (1) he was not entitled to recover in quantum meruit for the reasonable value of services rendered to the corporation; (2) he presented insufficient evidence to pierce the corporate veil and render Mr. Gilbert, the president and major stockholder of the corporation, personally liable for either the reasonable value of services relating to the ministers' issue or all services rendered from June 1975 to June 1978; and (3) he was not entitled to recover in quantum meruit for services rendered to Mr. Gilbert. Upon review of the record we find no reversible error; accordingly, we affirm.

I

The dispute about

Seymour M. Chase's (Chase) legal fees concerns the period July 1, 1975 to July 10, 1978. During that time, while Gilbert Broadcasting Corporation (GBC) was waiting for the Federal Communications Commission (FCC) to decide on its application to operate radio station WNJR, an issue arose concerning the illegal use of WNJR to broadcast lottery numbers. Chase had filed the FCC application on behalf of GBC. In March 1967, two principals of GBC advised Chase that ministers were broadcasting lottery information on WNJR while it was being operated on an interim basis by a partnership, including GBC, which was also seeking a license to operate the radio station. After reviewing tapes of the programs, Chase concluded that the ministers' broadcasts involved a serious violation of established FCC policy and, therefore, provided a substantial basis for disqualifying GBC's competitors for the radio station license. He recommended that GBC not act until the FCC issued its initial decision on GBC's application; if it was approved, then the' ministers' issue could be used to try to persuade the competitors not to appeal, but if the decision was against GBC, then the information could be used in a petition to reopen the proceedings. GBC adopted his recommendation.

Chase relies on the ten "fee letters" to support his claims that the written fee agreement prepared before he learned of the ministers' issue was not intended to include work on that issue, that GBC is bound by the terms set forth in the letters which he wrote after learning about the ministers' issue because GBC never expressed any disagreement with those terms and continued to authorize and accept his services in relation to the ministers' issue, and that five of the "fee letters" reflected oral agreements that had been reached between the parties. The trial court ruled that Chase's services relating to the ministers' issue were within the terms of his October 6, 1975, agreement in which he agreed "further to prosecute the applications for license until there was . . . a final disposition of the matter by the Federal Communications Commission."

II

Where the trial court sits without a jury, this court may reverse only for errors of law or if the decision is clearly wrong or without evidence of support in the record. D.C. Code § 17-305(a) (1981); Nelson-Bey v. Robinson, 408 A.2d 999, 1001-02 (D.C. 1979) (citations omitted); Johnson v. Lloyd, 211 A.2d 764, 765 (D.C. 1965); see also Banze v. American International Exports, Inc., 454 A.2d 816, 817-18 (D.C. 1983). The trial court properly admitted parole evidence to determine the meaning of the October 6, 1975 agreement since the phrase "further to prosecute [GBC's] applications for license until there is a final disposition" is open to more than one reasonable interpretation. 1.901 Wyoming Avenue Corporative Association v. Lee, 345 A.2d 456, 461 (D.C. 1975); Rich v. Sills, 130 A.2d 920, 922 (D.C. 1957); see Roberts v. Veterans Cooperative Housing Association, 88 A.2d 324, 326 (D.C. 1952). We hold that the testimony of Mr. Gilbert and Mr. Green, both GBC principals, as well as the course of dealings between Mr. Chase and GBC and its principals, and Chase's expertise, provide ample support for the trial court's ruling that the parties are bound by the October 6, 1975 agreement and that Mr. Chase cannot recover in quantum meruit. Leba v. Sills, 175 A.2d 599, 600 (1961) (no recovery under quantum meruit when rights of parties and basis of compensation determined by special contract).

A.

Chase contends that the ministers' issue was not within the scope of the October 6, 1975 agreement. He argues that the parties were fully aware of the scope of the fee arrangement when it was partially executed in October 1975, that, as an experienced FCC practitioner, he knew what generally was involved in the prosecution of a license application, and that neither he nor the principals contemplated or could have contemplated that an issue such as the ministers' issue would arise. Although there were apparently a number of discussions regarding fees,² there was no evidence, other than Chase's testimony, that there was ever any agreement to pay fees in addition to those in the October 6, 1975 letter. As an experienced attorney, Chase was familiar with the complexity of FCC proceedings, and had, in fact, been counsel in an FCC case which involved similar facts to the ministers' issue. He had the responsibility to draft his fee contract to make clear what services would be covered by it and what services would be excluded, Roberts v. Veterans Cooperative Housing Association, supra, 88 A.2d at 327 and could easily have included a provision in the October 6, 1975 letter to cover unanticipated work.

Chase's reliance on his nine letters is to no avail.³ The language of the August 26, 1975 and October 6, 1975 letters belie his claim that the terms of the July 1, 1975 letter, except as modified, were intended to be carried forward. The August 26, 1975 letter proposed a totally new agreement, using the language "in lieu of the terms in my letter of July 1, 1975" and including a new $25,000 fee which Chase would receive when GBC's license application was approved by the FCC. By its terms, and as restated in the October 6, 1975 letter, the August 26 letter made clear Chase's intention to require additional fees for "other purposes," which he defined in terms of matters either following a final FCC disposition or unrelated to those proceedings. The July 1, 1975 language about "present issues" was dropped from all subsequent letters. Chase's letters after October 6, 1975 suggest that he understood he was bound by the October 6, 1975 fee arrangement; some of those letters stated that the parties had not agreed to other fee proposals. These circumstances provide support for the trial court's finding that the ministers' issue was within the scope of the October 6, 1975 agreement to prosecute GBC's application "until there [was] a final disposition of the matter by the Federal Communications Commission."

We also find without merit Chase's contention that he is entitled to recover in quantum meruit even if the ministers' issue was within the scope of the October 6, 1975 contract. "[T]he right to recover in quantum meruit does not grow out of the contract, but it is independent of it. This right is based upon the promise implied by law to pay for beneficial services rendered and knowingly accepted." Campbell v. Northwestern National Life Insurance Co., 573 S.W.2d 496, 498 (Tex. 1978) (citing 1 WILLISTON ON CONTRACTS § 3A (other citations omitted)). Thus a party who has incurred a detriment at the request of another, by rendering service to the other with the reasonable expectation of compensation, is as entitled to enforce his claim at law as one who has acted similarly based on an expressed promise. Welsh v. Woods, 47 Hawaii 252, 254, 386 P.2d 886, 887 (1963) (citations omitted). For reasons previously discussed, we hold that the record supports the trial court finding that the parties' actions in directing Chase to prosecute the application by reopening the proceedings before the Review Board, did not constitute an implied promise to pay him an additional fee beyond that agreed to in the October 1975 agreement. The cases on which Chase relies are readily distinguishable.⁴ Chase cannot resort to quantum meruit merely because prosecuting the FCC application became more expensive than he had envisioned. Under the terms of a contract which he drafted he had "a...