Guess v. Parrott

• Decision Date: 16 September 2003
• Docket Number: No. COA02-1071.,COA02-1071.
• Court: North Carolina Court of Appeals
• Parties: Johnny Robert GUESS, Jr., Plaintiff, v. Terry Anthony PARROTT, Bridget Christina Parrott, d/b/a Parrott Trucking, Defendants.

585 S.E.2d 464

160 NC App. 325

Johnny Robert GUESS, Jr., Plaintiff, v. Terry Anthony PARROTT, Bridget Christina Parrott, d/b/a Parrott Trucking, Defendants.

No. COA02-1071.

Court of Appeals of North Carolina.

September 16, 2003.

Lloyd T. Kelso & Associates, by Lloyd T. Kelso, Gastonia, for the firm of Lloyd T. Kelso & Associates and for plaintiff, appellants.

Melrose, Seago & Lay, P.A., by Randal Seago, Sylva, for the firm of Melrose, Seago & Lay, P.A., appellees.

McCULLOUGH, Judge.

This appeal arises out of a dispute between attorneys for the firms of appellant Lloyd T. Kelso & Associates and appellee Melrose, Seago & Lay, P.A., as to entitlement to attorneys' fees stemming from the underlying case. The underlying case involved an automobile accident that occurred on 24 July 1999 in which plaintiff Johnny Robert Guess, Jr., was injured when his vehicle collided with a tractor-trailer driven by defendant Terry Anthony Parrott.

Shortly after the accident, plaintiff's father and brother, on 26 July 1999, contacted the appellee law firm of Melrose, Seago & Lay, P.A., and made arrangements with Randal Seago to represent plaintiff. On 29 July 1999, plaintiff and Randal Seago entered into a contingency fee agreement in which plaintiff promised to pay appellee one-third of any recovery. Further, plaintiff would reimburse appellee for expenses and costs advanced by it.

Mr. Seago went about the task of representing plaintiff. He filed a complaint on 6 January 2000. The parties negotiated at mediation, asking for $750,000.00. A settlement could not be reached as defendants would not go above $200,000.00. Plaintiff would not lower his demand under $650,000.00. Therefore, this matter went to trial on 29 January 2001. During the trial, a "high/low agreement" was made by the parties that guaranteed plaintiff $250,000.00, plus $15,000.00 for costs, regardless of the outcome, but capped recovery at $800,000.00. Defendants increased their offer to $350,000.00, but it was not accepted. The trial ended deadlocked at 10-2 in favor of defendants, and a mistrial was declared.

Following the unsuccessful trial, Seago and other attorneys at appellee law firm were involved in negotiations with their client, plaintiff, and defendants. Plaintiff made a settlement offer of $500,000.00, while defendants were willing to settle for $265,000.00. Both offers were rejected by the respective parties.

Plaintiff became dissatisfied with the representation provided to him by appellee law firm and informed them of such. Acceding to plaintiff's wishes, appellee filed a motion to withdraw on 23 April 2001. An order granting such was entered on 20 April 2001.

Thereafter, plaintiff secured the services of appellant Lloyd Kelso of Lloyd T. Kelso & Associates. Plaintiff entered into a contingency fee agreement with Kelso, promising to pay 35% of the amount recovered. Once retained, Kelso reviewed plaintiff's file that he had brought over from appellee. Kelso developed a strategy and hired several new experts. Kelso also revisited witnesses, including some who did not testify in the previous trial.

By September 2001, Kelso approached defendants about settlement. Kelso made a new request on behalf of plaintiff in the amount of $1,286,421.30. On 14 January 2002, a hearing was held as to the validity of the "high/low agreement" from the first trial and the issue of apportioning attorneys' fees between plaintiff's attorneys. The parties were ordered into mediation and eventually settled plaintiff's case for $525,000.00 on 22 January 2002. This amount was able to be procured, appellant contends, largely because of its work on the case. Further, appellant contends that had the "high/low agreement" not been in effect, the recovery could have been more. Either way, this amount was in excess of what plaintiff was offered during appellee's representation of plaintiff. The attorneys' fees issue was not resolved in mediation.

On 4 February 2002, appellee filed a motion requesting a portion of the attorneys' fees in the case. Appellant filed its motion in opposition on 15 February 2002, requesting a jury trial on the issue of the reasonable value of appellee's services. A hearing was held during the 25 February 2002 Mixed Session of Cleveland County Superior Court on 28 February 2002 before The Honorable Richard D. Boner as to whether a jury trial should be had. It was determined that the trial court would conduct a bench trial on the attorneys' fees issue during the 26 March 2002 Civil Session of Gaston County Superior Court before the same judge.

After the trial court heard the arguments and evidence on that date, it filed its order on 17 April 2002. In this order and in addition to the facts already discussed herein, the trial court found that both firms entered into contingency fee agreements with, provided competent legal services to, and advanced costs and expenses on behalf of plaintiff. In finding of fact # 12, the trial court found that

[p]rior to the Plaintiff's discharge of Melrose, Seago & Lay, P.A., the law firm had 244.72 hours in attorney and staff time invested in the case and this amount of time was reasonable and necessary to competently represent the Plaintiff's interests in this matter. Prior to its discharge by the Plaintiff, Melrose, Seago & Lay, P.A. had provided significant services to the Plaintiff in this matter.

As to appellant's time in the case, the trial court found that it had "invested 332.02 hours of attorney and staff time in this case." The trial court then found that:

14.

The case between the Plaintiff and the Defendants was ultimately settled by Lloyd T. Kelso & Associates on behalf of the Plaintiff in the amount of $525,000.00, thereby generated a contingency fee of $183,750.00. During 2000, both Lloyd T. Kelso & Associates and Melrose, Seago, & Lay, P.A. charged $200.00 per hour for litigation services. Lloyd T. Kelso & Associates incurred $40,565.73 in advanced costs and expenses on behalf of the Plaintiff during the time it represented the Plaintiff in this case. Lloyd T. Kelso & Associates performed additional and different work in preparing the case for trial including having additional medical evaluations performed of the Plaintiff, hiring another accident re-construction expert and taking depositions.

15.

After Lloyd T. Kelso & Associates undertook representation of the Plaintiff, it was able to settle the case for $150,000.00 over the Defendants' previous high offer made during the first trial in this matter, and $260,000.00 more than the Defendants offer made immediately after the first trial concluded.

16.

Although Lloyd T. Kelso & Associates undertook additional and different work on behalf of the Plaintiff in preparing the case for trial, this does not change the fact that Melrose, Seago & Lay, P.A. did a competent job of representing the Plaintiff at the first trial, and that Melrose, Seago, & Lay P.A.'s performance during the first trial on behalf of the Plaintiff was within the range of competence to be expected of attorneys practicing personal injury law in North Carolina.

Based on these findings, the trial court concluded that:

4. The representation of Melrose, Seago, & Lay P.A. conferred a valuable benefit upon the Plaintiff for which it has not been compensated.

5. Melrose, Seago & Lay, P.A. is entitled to recover the reasonable value of its services in quantum meruit from the Plaintiff from the contingency fee funds generated by the successful settlement of his case for the work it performed on behalf of the Plaintiff until unilaterally discharged by the Plaintiff on April 20, 2001.

6. It would be unjust for the Plaintiff and/or Lloyd T. Kelso & Associates to be enriched by the legal services and representation provided by Melrose, Seago, & Lay P.A. without having to compensate Melrose, Seago, & Lay P.A. for those services.

7. Considering the totality of the circumstances of this case, the reasonable value for services for which Melrose, Seago, & Lay P.A. is entitled to recover is $86,500.00 from the $183,750.00 contingency fee generated by the ultimate successful settlement of this case.

Appellant was awarded the remaining funds from the generated fee, and both parties were awarded their costs. Appellant Lloyd T. Kelso & Associates appeal from this order.

Appellant makes several assignments of error and presents the following questions on appeal: Did the trial court commit reversible error (I) by denying its motion to dismiss appellee's motion to determine attorneys' fees; (II) by entering judgment after conducting the hearing without a jury after a request was made for such; (III) in finding that appellee was entitled to recover attorneys' fees of $86,500.00 pursuant to quantum meruit; and (IV) by abusing its discretion by awarding $86,500.00 as that amount was not supported by the evidence.

I.

Appellant contends that the trial court erred by denying its motion to dismiss for several reasons, including that appellee failed to state a claim upon which relief could be granted. We disagree.

On a Rule 12(b)(6) motion to dismiss, the question is whether, as a matter of law, the allegations of the complaint, treated as true, state a claim upon which relief can be granted. Dismissal under Rule 12(b)(6) is proper when one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiff's claim; (2) the complaint on its face reveals the absence of facts sufficient to make a good claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff's claim.

Wood v. Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d 490, 494 (2002) (citations omitted).

Appellee's motion alleges that it provided valuable legal services to plaintiff pursuant to its contingency fee agreement. Subsequent to the agreement and services, appellee was unilaterally discharged by plaintiff. The case was settled afterward by another law firm, appellant,...