Hallowes v. Bedard, 5D03-3184.

• Decision Date: 30 July 2004
• Docket Number: No. 5D03-3184.,5D03-3184.
• Citation: 877 So.2d 953
• Parties: Borden R. HALLOWES, Appellant, v. Ronald BEDARD and Barbara Bedard, his wife, Appellee.
• Court: Florida District Court of Appeals

877 So.2d 953

Borden R. HALLOWES, Appellant, v. Ronald BEDARD and Barbara Bedard, his wife, Appellee.

No. 5D03-3184.

District Court of Appeal of Florida, Fifth District.

July 30, 2004.

Borden R. Hallowes, Fernandina Beach, pro se.

R.J. Larizza of R.J. Larizza, P.A., St. Augustine, for Appellees.

SHARP, W., J.

Hallowes appeals from a final judgment rendered after a non-jury trial, which denied his request for an award of attorney fees against Ronald and Barbara Bedard, based on quantum meruit. Hallowes represented the Bedards in prosecuting their claim against First Union Securities and others for investment losses, beginning with reviewing their letter claim form and handling the arbitration of their claim under NASD (National Association of Securities Dealers) Code of Arbitration Procedure through arbitration, a process that lasted a little over one year. The trial judge ruled that Hallowes was not entitled to recover attorney fees from the Bedards for two reasons: first, that Hallowes' expert witness to establish the reasonableness of fees to be awarded, based on quantum meruit, did not take into consideration all of the criteria required pursuant to Searcy, Denney, Scarola, Barnhart & Shipley, P.A. v. Poletz, 652 So.2d 366 (Fla.1995); and second, that the Bedards had good reason to believe Hallowes undertook their representation with the understanding and expectation that he would be paid for his services solely by an award imposed against First Union, et al., as a result of the arbitration. Because both findings are supported by competent, substantial evidence, even though in dispute, we affirm.

The circumstances and facts in this case are highly unusual. Hallowes admitted that he had never, in his lengthy legal career of forty years, handled a client representation in such a manner. He testified he has never had a case like this one, where he did not have a written contract, never discussed his hourly rate, and never provided a bill to his client until the legal matter had been concluded.

He first met Ronald Bedard after being assigned to play golf with him at the Oakridge Country Club. When Hallowes told Bedard he was an attorney, Bedard told him he and his wife were in the process of filing a claim with NASD to seek a recovery against First Union for investment losses. Hallowes offered to assist.

Bedard pointed out that on the letter form he intended to file there was a box to check to request the arbitration panel to award attorney fees. Bedard told Hallowes that if he wanted to assist him, he would check the box and claim attorney's fees. Bedard testified he told Hallowes that his fees would be paid on that basis. Hallowes said: "Well, yeah, that would be fine."

This conversation took place either in the parking lot at the Country Club, or in the Bedards' home, when Hallowes and his wife happened to stop by while riding their bicycles, one weekend shortly after Bedard and Hallowes first met. Bedard signed a document, which he sent to NASD, indicating Hallowes was representing him in this matter and Hallowes began work on the case.

Hallowes testified that a lot of his review of records and work was done at the Bedards' home, sitting at their dining room table and at a Burger King restaurant, and discussions about the claim took place while they were playing golf. Hallowes never told the Bedards what his hourly rate (fee) charge would be ($250.00), or the fee he would charge them per day for conducting the case for them at arbitration ($3,500.00). He never sent them an interim billing or statement until the arbitration had been concluded. They never signed a written agreement for Hallowes' services. As time progressed, Hallowes became uncomfortable with the fact that he had no written contract to cover his representation and fees. He presented the Bedards with two or three contingency fee contracts, one very shortly before the arbitration proceeding was scheduled. Each time Bedard refused to sign a contingency fee contract. He testified he reminded Hallowes that he had agreed to seek his fees from First Union and that he (Bedard) would not pay him out of his pocket: "I made it very clear."

Hallowes testified he was upset by the failure of the Bedards to sign a written contingency fee contract. He tried to get them "to come up with something," but "we never did." He did not want to press them, because they were friends, nor did he want to withdraw immediately before the arbitration. He was "resigned." At the end, he felt "what the heck ... just go ahead and ... get it over with." In turn, Bedard testified that after he rejected the last contingency fee contract, he feared that Hallowes might not appear for the arbitration hearing. Bedard was prepared to proceed on his own.

The arbitration decision awarded the Bedards $86,546.83, as compensatory damages, plus interest, bringing the total award to $106,834.01. The Bedards had sought compensation for $264,000 in investment losses, punitive damages of $235,000, attorney's fees and costs. The costs were $10,000.00.¹ The arbitration panel denied punitive damages, attorney's fees and costs.

Hallowes admitted he had not researched how to obtain an attorney's fee award in an arbitration proceeding and as a result, the arbitration panel could not have awarded attorney fees, against First Union. Bedard was also unaware he could have sought fees against First Union by filing suit in circuit court, after the arbitration award was final.² Accordingly, Hallowes failed to apply to the circuit court to have the award certified and to pursue his claim for attorney's fees in that venue.

I. Expert Testimony to Establish Attorney's Fees Based on Quantum Meruit.

The Searcy case is the Florida Supreme Court's most current direction to the Florida Bar and courts concerning the criteria to be used in determining a reasonable fee for an attorney in a quantum meruit situation. That is to say, when there is no controlling contract between the client represented and the attorney, and the attorney is seeking fees against the client. In Searcy, there had been a contingency fee contract, but the attorney was discharged without cause prior to the resolution of the case. But the Searcy case has been applied to other situations where there was no written contract. See Frank J. Pepper, Inc. v. Vining, 783 So.2d 1160 (Fla. 3d DCA 2001)

.

The Searcy court said that the lodestar method of calculating fees,³ should not be applied if the fee is to be paid by the client or other contracting party. Reasonable time and rate are factors, and Florida Bar Rule 4-1.5(b) is a starting point. But the criteria should encompass all relevant factors surrounding the professional relationship, including the actions taken by the attorney, whether and to what extent they benefitted the client, the skill demanded and demonstrated, and the results obtained. It concluded that the determination as to which factors are relevant in a given case, the weight to be given each factor and the ultimate determination as to the amount to be awarded, are matters within the sound discretion of the court. In Searcy, the court overturned the trial court's attorney's fee award because it failed to "consider the totality of the circumstances present in this case, considering only the time reasonably expended and the reasonable hourly rate for the services, as determined under the principles set forth in Rowe."652 So.2d at 369.

In this case, Hallowes' expert witness testified as to the reasonableness of Hallowes' hourly rate charged ($250.00 per hour), the daily rate for handling the arbitration proceedings,...