Smith v. Westside Transit Lines, Inc.

• Decision Date: 15 May 1975
• Docket Number: No. 6734,6734
• Citation: 313 So.2d 371
• Parties: Walter SMITH v. WESTSIDE TRANSIT LINES, INC. and Liberty Mutual Insurance Company.
• Court: Court of Appeal of Louisiana — District of US

Page 371

313 So.2d 371

Walter SMITH v. WESTSIDE TRANSIT LINES, INC. and Liberty Mutual Insurance Company.

No. 6734.

Court of Appeal of Louisiana, Fourth Circuit.

May 15, 1975.

Rehearing Denied June 11, 1975.

Writ Refused Sept. 11, 1975.

Fine & Waltzer, Bruce C. Waltzer, New Orleans, for plaintiff-appellee.

Dodd, Hirsch, Barker, Meunier, Boudreaux & Lamy, Harold J. Lamy, New Orleans, for intervenor-appellee Frank S. Bruno.

Before REDMANN, STOULIG and SCHOTT, JJ.

SCHOTT, Judge.

This appeal was taken by Frank S. Bruno, an attorney at law, from a judgment on his petition of intervention in his favor against Walter Smith for $2400.

On July 29, 1970, appellant was employed by Smith to represent him in connection with personal injuries he sustained on July 27, 1970. The written contract of employment prepared by appellant provided for a contingent fee to appellant of one-third of any amounts 'collected by him by settlement' and 40% Of any amounts 'collected by actual litigation.' It further provided 'that neither party can settle without consent of the other.'

On April 29, 1971, appellant filed a suit on Smith's behalf and in due course, after various pleadings were filed and discovery devices were employed, a pre-trial conference was held on July 5, 1972, at which time the case was scheduled for trial before a jury on November 8. On July 24 counsel for defendants moved for a continuance, and on September 15 this motion was granted by the trial judge. In the meantime, on September 14, 1972, Smith by letter to appellant notified him that his employment as attorney was terminated and requested that his file be sent to Mr. Bruce C. Waltzer for further representation in the matter. On November 8 Smith contacted the State Bar Association for assistance in obtaining his file from appellant who, after releasing Smith's file, filed a petition of intervention on December 27, 1972, on which he claimed either one-third or 40% Of whatever amounts would be received by Smith as a result of the litigation, and in the alternative the sum of $11,650 on the basis of quantum meruit computed at $50 per hour for 233 hours of work done in Smith's behalf.

While the petition of intervention purports to have attached a copy of appellant's contract of employment the record shows that it was not filed as an exhibit or otherwise made a part of the record. Also, while a request was made for service of the petition of intervention on both Smith and the defendants at the time it was filed the record shows that no service of it was made until October 25, 1973. In the meantime defendants settled the case with Smith for $25,000 and on October 19, 1973, Smith's case was dismissed.

The record and the testimony taken at the trial of the intervention demonstrate that appellant was ably and diligently handling Smith's case when he was discharged. Because the case was to be tried to a jury the earliest date possible was in November, 1972. The stated grounds for the continuance requested by defendants were such that one would reasonably expect the motion to be granted. Unfortunately, the procedure in the trial court was such that the case would be postponed until the next jury term one year later. Shortly after the motion for continuance was filed, appellant, sensing that this development would cause already strained relations between himself and Smith to deteriorate further, tried without success to salvage some other trial date in November, 1972. It was when appellant informed Smith of these developments that he was told that his employment was terminated.

Out of the settlement of $25,000, $6,000 was paid to Smith's employer's compensation carrier and 40% Of the.$19,000 difference, or $7,600 was paid to Smith's new attorney, Bruce C. Waltzer. For the duration of appellant's representation, no offer of $25,000 was made to or refused by Smith.

Appellant had kept no time records during his representation but made his estimate of 233 hours spent on the case by reconstructing and analyzing the evolution of the case. He produced as an expert an attorney who testified that an hourly rate of $50 was appropriate . However, both appellant and the expert maintained that personal injury tort claims taken on a contingent fee basis are not susceptible to compensation at an hourly rate, and they thereby explained the absence of time records.

The trial judge, concluding that appellant was entitled to recover a fee on a quantum meruit basis, found that a fee based on 60 hours at an hourly rate of $40, or $2,400, would do substantial justice.

In this Court appellant makes the following assignment of errors in the judgment of the trial court:

'I. The contract of legal representation does not fall when client discharged attorney without cause.

II. Quantum Meruit applies only when there is just cause for the attorney's discharge.

III. Trial court cannot arbitrarily fix attorney's fees under Quantum Meruit contrary to the evidence.

IV. Intervenor's claim should be charged to Defendants, Westside Transit Lines, Inc., and Liberty Mutual Insurance Company as well as to Plaintiff.'

The first and second errors assigned by appellant are not susceptible of easy disposition, despite the fact that one of the cases relied upon by appellant, Doucet v. Standard Supply & Hardware Company, 250 So.2d 549 (La.App.3rd Cir. 1971), is clearly distinguishable and does not support appellant's position. In that case, the attorney with a contingent fee contract had actually been offered a settlement, which offer was transmitted to the client with the recommendation that it be accepted. Thereafter, the attorney was discharged by the client, a second attorney was employed, the case was tried in due course and the client's recovery was less than that which had been offered through the first attorney. The court held that the first attorney was entitled to his full contingent fee on the amount of the settlement offer transmitted to and rejected by the client, because the attorney's employment was terminated after the attorney satisfied the condition of the contract which entitled him to the stipulated fee, citing C.C. Art. 3022. A result similar to that reached in the Doucet case was also reached in Andirac v. Richardson, 125 La. 883, 51 So. 1024. but the other three cases relied upon by appellant, D'Avricourt v. Seeger, 169 La. 620, 125 So . 735 (1929), United Gas Public Service Co. v. Christian, 186 La. 689, 173 So. 174 (1937) and Carlson v. Nopal Lines, 5 Cir., 460 F.2d 1209, tend to support appellant's position but are difficult to reconcile with other cases, especially some of the more recent ones.

In the D'Avricourt case, the attorney entered into a contract with the clients obligating himself to place the heirs (clients) in possession of property and to effect a partition sale of the property for a fee of $10,000 to be paid 60 days after the heirs were placed in possession. The attorney proceeded in accordance with the contract, but after the property was sold at public auction the adjudicatee refused to comply with his bid whereupon two of the three clients sold their interest in the property to a third party. The court found that the attorney had been prevented from the performance of his contract by the action of the clients in selling their interest in the property and held that he was entitled to his full fee. The court held:

'It is expressly provided in article 2040 of the Civil Code that: 'The condition is considered as fulfilled, when the fulfillment of it has been prevented by the party bound to perform it.'

'The contract of sale of the two-thirds interest of Mrs. Bickmann and Mrs. Manzella to the Gentilly Development Company was clearly an act, on their part, of entering into another contract destructive of their first contract with plaintiff. A party cannot get out of his contract in that manner. No one can be permitted to take advantage of his own wrong. Lloyd v. Dickson et al., 116 La. 90, 92, 40 So. 542.'

In the United Gas Public Service Co. case, at the time the attorneys were employed by the client they were conveyed an interest in immovable property in exchange for their undertaking to represent the client. Before the attorneys undertook any legal action the client employed other counsel without any notice given to or attempt to discharge the original attorneys. The court recognized the rule that the client has a right to revoke the employment of his attorney at will with or without cause, but in deciding that the attorneys were entitled to the interest in the property which by contract they had acquired held that there is an exception where in the contract of employment the attorney acquires an interest in property.

In Louque v. Dejan, 129 La. 519, 56 So. 427 (1911), the court distinguished between the contract of employment where an interest in property is taken and the contract of employment where there is a contingent fee to be paid out of money which may or may not be recovered. The court said:

'From the foregoing, we deduce that the test is where there is a mandate with an interest; the agent or attorney acquires a vested right, of which he cannot be diverted by his discharge.

'Of course, if plaintiff had acquired an interest, he is entitled to the amount claimed. But, if he was not vested with an interest, it was a mandate which could be terminated, as was done in this instance.

'The mandate in question extended to and included only the amount which the attorney was to recive in compensation. That amount was to become his on collecting the fund. He had no ownership in the thing.

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'Certainly, if the client had the right to dismiss the suit altogether, causing the destruction of the eventual res, he certainly had the lesser right to contract the res by employing another attorney, leaving to the first the right to recover for his services actually performed.

'Plaintiff is not entitled to a fee for services rendered after the discharge.'

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