Flanders+ Medeiros Inc. v. Bogosian, Civ. A. No. 91-0026L.

• Decision Date: 14 November 1994
• Docket Number: Civ. A. No. 91-0026L.
• Parties: FLANDERS + MEDEIROS INC., Plaintiff, v. Elizabeth V. BOGOSIAN, Defendant.
• Court: U.S. District Court — District of Rhode Island

868 F. Supp. 412

FLANDERS + MEDEIROS INC., Plaintiff, v. Elizabeth V. BOGOSIAN, Defendant.

Civ. A. No. 91-0026L.

United States District Court, D. Rhode Island.

November 14, 1994.

COPYRIGHT MATERIAL OMITTED

Matthew F. Medeiros, Robert Karmen, Flanders & Medeiros, Jeffrey C. Schreck, Brown, Rudnick, Freed & Gesmer, Providence, RI, Cynthia C. Smith, Eric Lund, Posternak, Blankstein & Lund, Boston, MA, for plaintiff.

Robert I. Deutsch, Chestnut Hill, MA, William Y. Chaika, Providence, RI, for defendant.

MEMORANDUM AND ORDER

LAGUEUX, Chief Judge.

I. INTRODUCTION

Pursuant to Fed.R.Civ.P. 72(b) and Rule 32(c)(2) of the Local Rules of this Court, plaintiff Flanders + Medeiros, Inc., ("F + M") objects to the recommendations of United States Magistrate Judge Timothy M. Boudewyns: 1) that F + M's motion for summary judgment should be denied on its breach of contract claim as contained in the Complaint against defendant Elizabeth V. Bogosian ("Bogosian"); and 2) that the reasonableness of F + M's fees as a matter of law cannot appropriately be determined under Fed.R.Civ.P. 56(d). Bogosian objects to Magistrate Judge Boudewyns' recommendation that F + M's motion for summary judgment be granted on Bogosian's attorney malpractice counterclaim. Bogosian does not object to Magistrate Judge Boudewyns' recommendation that her cross-motion for summary judgment on F + M's breach of contract claim be denied.

After considering Magistrate Judge Boudewyns' Report and Recommendation, the parties' legal memoranda, and the relevant case law, this Court concludes that summary judgment should be granted for F + M on its breach of contract claim as contained in the Complaint. Having determined that F + M is entitled to summary judgment on its breach of contract claim, the Court determines that the outstanding balance owed to F + M by Bogosian on June 9, 1994 is $1,079,282.30, plus any interest which has accrued since that time. The Court also concludes that summary judgment should be granted for F + M on Bogosian's attorney malpractice claim as contained in Counts I and II of the Counterclaim.¹

II. FACTS

Plaintiff, F + M, is a law firm based in Providence, Rhode Island. Defendant, Bogosian, is a real estate developer in the southeastern New England area, formerly a citizen of Rhode Island but now a citizen of Florida. In November 1989, F + M agreed to represent Bogosian in a number of litigations which were pending before various state courts and in this Court. The suits involved numerous disputes concerning the substantial real estate holdings she had with her two brothers (the Woloohojians) through various entities. This case arose from the attorney-client relationship between F + M and Bogosian — specifically Bogosian's failure to pay F + M's legal fees and her allegation of legal malpractice on the part of F + M.

On November 24, 1989, F + M sent Bogosian a letter (the "retainer letter") setting out the terms of F + M's retention as Bogosian's counsel. The retainer letter provided, in pertinent part:

We recognize that you may be unable to pay our monthly statements in full on an ongoing basis. To the extent that you are unable to pay those bills from other sources, you have agreed to apply your first proceeds out of the E & J receivership, the Woloohojian Realty Associates receivership, and/or the federal court litigation, until all of our outstanding bills, including any accrued interest, are paid in full. Appended to this letter as Exhibit A is an Assignment that we would ask you to execute. That assignment gives us an interest in the proceeds of those court proceedings up to the amount of our bills. It is my understanding that you have reviewed this agreement with Ted Pliakas and have found it acceptable.

Bogosian signed the retainer letter and also executed the referenced assignment agreement (the "assignment") which provided:

To the extent that Assignor owes Assignee any money for out-of-pocket expenses and legal services rendered by Assignee in connection with said actions, Assignor hereby assigns to Assignee, effective as of the day and year first above written, that portion of the Recoveries² which is necessary to pay all of Assignee's then unpaid bills.

Bogosian also executed a UCC-1 financing statement which was filed with the Rhode Island Secretary of State. Bogosian was represented by her personal counsel, Eustace T. Pliakas ("Pliakas"), when she executed the retainer letter, assignment, and financing statement.

After Bogosian signed the retainer letter on November 24, 1989, F + M entered its appearance as substitute counsel for Bogosian in a number of pending actions. Subsequently, F + M agreed to represent Bogosian in several additional lawsuits. In all, F + M represented Bogosian in approximately ten separate but related litigations.

On December 23, 1992, F + M received two checks from Woloohojian Realty Corporation ("WRC") totalling one million dollars and payable to Bogosian. The letter which accompanied the checks stated that the checks were:

a voluntary principal payment made by WRC on account of Mrs. Bogosian's former shareholder interest. This entire sum shall constitute an immediate credit toward any principal sums which may become due and owing to Mrs. Bogosian in the federal court proceeding on account of WRC's purchase of her shares and/or WRC's liquidation.

The checks themselves contained no written conditions or restrictions. It was merely noted on the checks that they were a "partial payment for stock acquisition."

F + M requested that Bogosian indorse the two checks and remit them to F + M in payment of outstanding legal fees. Bogosian refused to indorse the checks. She alleges that her refusal was based on her good faith belief that indorsing the checks would cause her adverse tax consequences. Bogosian also asserts that she believed WRC's payments were improperly designated for principal amounts owed to her by WRC rather than interest. F + M alleges that as of June 9, 1994, the total principal and interest owed to F + M by Bogosian was $1,079,282.30, and that interest has continued to accrue at Fleet National Bank's prime rate since that date.

F + M filed this action against Bogosian on January 14, 1993, alleging that Bogosian breached her agreements with F + M and that F + M is entitled to compensatory damages in the amount of its outstanding fees, plus interest, costs and attorney's fees. Additionally, F + M's complaint sought an order requiring Bogosian to indorse the two checks and pay them over to F + M.³ On March 16, 1993, Bogosian filed an Amended Answer and Counterclaim with the Court. The Counterclaim in Count I alleged that F + M was negligent in its representation of Bogosian and committed professional malpractice.⁴ The Counterclaim in Count II alleged that F + M breached its contractual obligations to Bogosian because of F + M's negligent representation of her.

A review of the discovery process in this case is pertinent to the Court's consideration of F + M's motion for summary judgment on Bogosian's malpractice counterclaim. At the pre-trial scheduling conference on March 29, 1993, this Court set a discovery closure date of September 24, 1993. On April 12, 1993, Bogosian moved to stay discovery. Her motion was denied by Magistrate Judge Boudewyns on June 14, 1993. On September 17, 1993, Bogosian moved to enlarge the time for discovery. This Court denied her motion on October 1, 1993. Finally, on October 22, 1993, Bogosian moved to continue the case and pass it from the trial calendar and to reconsider opening discovery. These motions were denied by Magistrate Judge Boudewyns on November 23, 1993. Bogosian did not serve any discovery requests of her own until September 24, 1993 — the date discovery closed. She did not hire an expert witness to provide testimony necessary for her malpractice counterclaim until February, 1994, and her supplementary answers to F + M's interrogatories merely identified her expert but did not indicate the likely substance of his testimony. Apparently Bogosian's expert did not have adequate time to review the records.

F + M moved for summary judgment on its breach of contract claim in the Complaint and on Bogosian's malpractice counterclaim. Bogosian moved for summary judgment on F + M's breach of contract claim. On February 22, 1994, Magistrate Judge Boudewyns heard arguments on the parties' cross-motions for summary judgment. On April 6, 1994, Magistrate Judge Boudewyns issued a Report and Recommendation in which he urged that summary judgment be denied to both parties on the breach of contract claim as contained in the Complaint but that summary judgment be granted to F + M on Bogosian's malpractice counterclaim.

Pursuant to Fed.R.Civ.P. 72(b) and Local Rule 32(c) of this Court, both parties filed timely objections to the Magistrate's Report and Recommendation. On June 10, 1994, the Court heard oral arguments on the parties' objections and now makes a de novo determination on the summary judgment motions.

III. DISCUSSION

A. Summary Judgment Standard

Rule 56(c) of the Federal Rules of Civil Procedure sets forth the standard for ruling on a summary judgment motion:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

In determining whether summary judgment is appropriate, the Court must view the facts on the record and all inferences therefrom in the light most favorable to the nonmoving party. Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d 370, 373 (1st Cir.1991). Additionally, the moving party bears the burden of showing that no evidence supports the nonmoving party's position. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986). If...