Covert v. Allen

• Decision Date: 15 November 1943
• Docket Number: Civil 4602
• Citation: 61 Ariz. 19,143 P.2d 341
• Parties: N. P. COVERT, Appellant, v. LESLEY B. ALLEN, Appellee
• Court: Arizona Supreme Court

143 P.2d 341

61 Ariz. 19

N. P. COVERT, Appellant, v. LESLEY B. ALLEN, Appellee

Civil No. 4602

Supreme Court of Arizona

November 15, 1943

APPEAL from a judgment of the Superior Court of the County of Pima. Arthur T. La Prade, Judge. Judgment affirmed.

Mr. A O. Johnson, for Appellant.

Mr John A. Bruning, for Appellee; Mr. Lesley B. Allen, Appellee in propria persona.

OPINION

STANFORD, J.

This cause comes to us from Pima County, Arizona, where the case was tried before the Honorable Arthur T. La Prade, of Maricopa County, Arizona, without a jury. The appellant retained the appellee, who was a practicing lawyer, by written contract to represent her in the foreclosure of a realty mortgage securing a promissory note in the sum of $20,000 with interest, executed by Arizona Mortuary, a corporation, and assigned by the mortgagee and payee to this appellant. By the contract appellant agreed to pay appellee for his services $100 upon the execution of the contract $100 upon the entering of an order of the continuance under the Moratorium Law or upon the issuance of a sheriff's certificate of sale, and 5% of any amount received in settlement of the action or 10% of the amount paid in redemption after sheriff's sale or the amount allowed by the court, less the $200 above referred to as advanced. Appellee filed his action for foreclosure July 11, 1933. In March, 1933, the Legislature of Arizona passed the Mortgage Moratorium Law, Laws 1933, chapter 29, whereby on proper application of a mortgagor continuance could be obtained through the court on certain conditions. In August, 1933, the Arizona Mortuary filed a motion for continuance under that law, and about each two years thereafter an application was made by the mortgagor for a continuance under the successive laws in that respect, the last continuance expiring March 4, 1941. However, on April 1, 1940, the Supreme Court of this State declared the Moratorium Act of 1939, Laws 1939, chapter 34, underwhich the last continuance was granted, unconstitutional. Pouquette v. O'Brien, 55 Ariz. 248, 100 P.2d 979. The mortgagor thereupon filed its answer and set-off, and the appellee, on behalf of his client, the appellant, filed a reply on December 22, 1941.

On the 23rd day of January, 1942, appellant notified appellee that she no longer required his services, and at a time thereafter the appellee brought his action against the appellant for legal services rendered in connection with the foreclosure action, and asked for $2,500, less $200 previously paid. Judgment was granted the appellee for the full amount prayed for in his action.

The assignments of error raised by appellant are:

First. That the court erred in the admission of evidence of services rendered by appellee short of complete performance of the contract.

Second. That appellee had been employed upon a contract for contingent fee and that the contingency upon which the fee was payable had not occurred, that the contract had not been performed, nor any adequate excuse shown for failure to perform, the court erred in overruling appellant's motion for judgment because the evidence showed that the appellant discharged her attorney for just cause.

Third.The court erred in rendering judgment for appellee in an amount greatly in excess of the reasonable value of services rendered.

The appellant submits two propositions of law:

First. An attorney, employed upon a contract for a contingent fee, discharged by his client for just cause before the happening of the contingency, cannot recover for services, either upon the contract or upon a quantum meruit.

Second. When an attorney is allowed to recover a fee upon a quantum meruit basis, the fee must be reasonable, taking into account the importance of the services, the standing of the attorney in the profession and the degree of skill required for the services and the results obtained.

Among the contentions of the appellee are that he was always ready and willing to complete the case and carry out the contract as agreed, but did not have the cooperation of the appellant herein and that she declined to go to trial; that he offered to call experts in support of the value of his services, but the trial court ruled that they were not necessary to determine the issue; that he represented the appellee from June, 1933, to January, 1942, and that up to April, 1940, which was the earliest date the matter could be brought to issue because of the Moratorium law, he could not bring the case to trial, and thereafter she would not come at his request and get ready for the trial.

Appellant cites in support of her contentions the cases of In re Badger, 2 Cir., 9 F.2d 560; Fletcher v. Kellogg, 55 App. D.C. 351, 6 F.2d 476, 40 A.L.R. 1525; Crowley v. Wolf, 281 N.Y. 59, 22 N.E.2d 234, 131 A.L.R. 970.

In the Badger case [2 Cir., 9 F.2d 562] referred to, the opinion has this to say:

"The rule is that, where an attorney has been retained on a specific contract and was discharged for a justifiable cause, he may not recover compensation either in an action upon contract or upon a quantum meruit basis. The reason for this rule is that the contract of employment is entire and in order to earn his compensation, the attorney is subject to the same test as every other contract performer; he must show full performance in accordance with his retainer in order to recover the stipulated compensation."

This case is conditioned that he was discharged for a justifiable cause.

In the case of Fletcher v. Kellogg, supar [55 App. D.C. 351, 6 F.2d 478, 40 A.L.R. 1525,] the appellant submits the following:

"... The defendant accordingly was entitled to a reasonable time and opportunity to take proper action,... This opportunity was fully given him....

"... since the defendant's fee was contingent upon success, he cannot now recover compensation for his unsuccessful efforts."

This case we find to be conditioned on the fact that counsel had reasonable time to take proper action.

And, in the case of Crowley v. Wolf, supra [281 N.Y. 59, 22 N.E.2d 237, 131 A.L.R. 970], we find the following:

"Assuming, however, that the plaintiff was justified in treating the defendant's letter as a discharge, the question remains whether in the circumstances the discharge was wrongful. A client who employs an attorney on a contract for a contingent fee has an absolute right to discharge the attorney and will not be liable on quantum meruit if the discharge was in good faith, for cause, and not wrongful...."

This case has to do with whether in the circumstances the discharge was wrongful.

One of the principal clauses in the contract of employment is as follows:

"The said attorney hereby agrees that he will take, file and prosecute the said action, in all respects in a proper, diligent and professional manner, to the end that the said mortgage may be finally and completely foreclosed, judgment taken against the mortgagor company, and Sheriff's Deed be received in favor of the said client or her assignees, if any, with the understanding that the said attorney will use his best efforts to make any settlement of the said case that may be desired and directed by his said client;"

The covenants entered into by the appellant relative to fees are as follows:

"One hundred dollars ($100.00) cash, paid herewith, receipt of which is hereby acknowledged by the said attorney;

"One hundred dollars ($100.00), lawful money of the United States of America to be paid to the said attorney by the said client upon the making and entry by the said court of any order of continuance of such foreclosure cause under the moratorium laws of the State of Arizona, or upon the issuance in such cause of Sheriff's Certificate of Sale;

"Five per cent (5%) of any amount received in settlement of such action, such settlement to be approved by such client; and

"Ten (10%) of amount paid in redemption of such property after Sheriff's sale, if such amount be allowed by the Court as attorney's fee of client, otherwise such amount as is allowed by the court; and

"Either of such last mentioned amounts to be less the sum of Two hundred dollars above provided for."

On June 19, 1940, ...