Williams & Cochrane, LLP v. Rosette

• Decision Date: 27 September 2022
• Docket Number: 17-CV-1436-RSH-DEB
• Parties: WILLIAMS & COCHRANE, LLP, Plaintiff, v. ROBERT ROSETTE, et al., Defendants.
• Court: U.S. District Court — Southern District of California

WILLIAMS & COCHRANE, LLP, Plaintiff, v. ROBERT ROSETTE, et al., Defendants.

No. 17-CV-1436-RSH-DEB

United States District Court, S.D. California

September 27, 2022

ORDER (1) PARTIALLY GRANTING AND PARTIALLY DENYING MOTIONS FOR SUMMARY JUDGMENT BY QUECHAN TRIBE AND BY WILLIAMS AND COCHRANE AGAINST QUECHAN TRIBE; (2) DENYING MOTION FOR SUMMARY JUDGMENT BY WILLIAMS & COCHRANE AGAINST ROSETTE DEFENDANTS; (3) GRANTING MOTION FOR SUMMARY JUDGMENT BY ROSETTE DEFENDANTS; AND (4) DENYING AS MOOT MOTIONS TO EXCLUDE AND STRIKE [ECF NOS. 322, 328, 329, 330, 332 336]

HON ROBERT S. HUIE UNITED STATES DISTRICT JUDGE

This Order addresses six motions: (1) a motion for summary judgment filed by Defendant Quechan Tribe of the Fort Yuma Indian Reservation (the “Quechan Tribe”) (the “Quechan Motion”), ECF No. 329; (2) a summary judgment motion filed by Plaintiff Williams & Cochrane, LLP (“W&C” or “Plaintiff”) against the Quechan Tribe (the “W&C Motion against the Quechan Tribe”), ECF No. 330; (3) a motion for summary judgment filed by Defendants Robert Rosette (“Rosette”); Rosette & Associates, PC; and Rosette, LLP (collectively, the “Rosette Defendants”) (the “Rosette Motion”), ECF No. 322; (4) a motion for summary judgment filed by W&C against the Rosette Defendants (the “W&C Motion against the Rosette Defendants”) ECF No. 328; (5) the Rosette Defendants' motion to exclude expert declarations that W&C filed in connection with its summary judgment briefing, ECF No. 332; and (6) W&C's motion to strike the Rosette Defendants' aforementioned motion to exclude, ECF No. 336. After outlining the facts and procedural history, the Court will address the Quechan Motion and W&C Motion against the Quechan Tribe [(1) through (2)], the Rosette Motion and W&C Motion against the Rosette Defendants, [(3) and (4)], and finally the motions to exclude and strike [(5) and (6)].

This case arises out of an attorney-client relationship between W&C as attorneys and the Quechan Tribe as client. The representation began in September 2016, and involved work on negotiating a new gaming compact with the State of California. In June 2017, the Quechan Tribe fired W&C and hired a new law firm, the Rosette Defendants, which completed the negotiations with the State at a lower cost to the Quechan Tribe.

W&C sued its former client, seeking unpaid attorney's fees, and the Quechan Tribe brought counterclaims against W&C. W&C also sued the replacement law firm, the Rosette Defendants, alleging that the Rosette Defendants had overstated Rosette's past accomplishments, as contained within a single sentence in Rosette's web biography.

As set forth below, as to W&C's claims against the Quechan Tribe, the Court denies summary judgment to both sides on W&C's claim for breach of contract, and grants summary judgment to the Quechan Tribe on W&C's claim for breach of implied covenant. As to the Quechan Tribe's counterclaims against W&C, the Court grants summary judgment to W&C on the Quechan Tribe's counterclaims for breach of fiduciary duty and breach of implied covenant, and denies summary judgment to W&C on the Quechan Tribe's counterclaims for negligence and breach of contract. As to W&C's claim against the Rosette Defendants under the Lanham Act-the sole federal claim in this case-the Court grants summary judgment to the Rosette Defendants and denies summary judgment to W&C.

I. FACTS

The law firms that are parties to this lawsuit-Plaintiff W&C and the Rosette Defendants-have a history together. Several years ago, Cheryl Williams (“Williams”) and Kevin Cochrane (“Cochrane”) worked as associates for Rosette, LLP (formerly known as Rosette & Associates, PC). ECF Nos. 322-3 ¶ 15; 321-15 at 34:22-24; 321-16 at 25:6-14; 52-2 ¶ 4.^[1] Rosette, the firm's founder, along with Williams and Cochrane, worked together to bring a lawsuit against the State of California on behalf of the Pauma Band of Luiseno Mission Indians (the “Pauma Band”) based on overpayments the Pauma Band had made under its gaming compact (the “Pauma Litigation”). ECF No. 220, Fourth Amended Complaint (“4AC”), ¶ 119; ECF Nos. 322-3 ¶¶ 10, 13; 349-2 ¶ 20. In the midst of the Pauma Litigation, Williams and Cochrane left Rosette's firm to start their own firm, Plaintiff W&C. 4AC ¶ 28; ECF No. 321-16 at 101:21-102:1. The Pauma Band terminated Rosette's firm and hired W&C instead. 4AC ¶ 32; ECF Nos. 328-12 at 4. The Pauma Band was highly successful in that lawsuit.^[2]

A. The Quechan Tribe Retains W&C

In 1999, the Quechan Tribe entered into its own gaming compact with the State of California. ECF No. 335. This compact was amended in June 2006 (the “2006 Amendment”). ECF No. 328-22. The 2006 Amendment required the Quechan Tribe to pay additional revenue sharing fees. ECF Nos. 325 at 3-4; 349-4 ¶ 3. On September 29, 2016, the Quechan Tribe hired W&C, along with its two founding partners, Williams and Cochrane, for legal advice on reducing those compact payments. ECF Nos. 328-20 ¶ 2; 328-21.

The Attorney-Client Fee Agreement between the Quechan Tribe and W&C (the “Fee Agreement”) had three different fee provisions: a monthly flat fee, a contingency fee, and-as an alternative to the contingency fee-a “reasonable fee” for services provided. ECF No. 329-7 ¶¶ 4, 5, 11.

Paragraph 4 of the Fee Agreement required the Quechan Tribe to pay a flat fee of $50,000 per month, without regard to the work performed or results obtained:

4. MONTHLY FLAT FEE

Client agrees to pay a flat fee of $50,000 per month for Firm's services under this Agreement. This fee is fixed and does not depend on the amount of work performed or the results obtained. Client acknowledges that this fee is negotiated and is not set by law. The fee shall be paid by Client by the last day of each month . . . If either party terminates the representation before Firm has provided all legal services described in this Agreement, Client may be entitled to a refund or reduction of all or part of the flat fee for the current month based on a pro-rated daily fee (i.e., $50,000 divided by the number of days in the month equals daily fee) . . .

Id. ¶ 4.

Paragraph 5 of the Fee Agreement provided for a contingency fee additional to the monthly flat fee. The fee was to be calculated at 15% of a base amount referred to as a “net recovery,” which referred to amounts that the Quechan Tribe might receive, in the form of a credit, offset, or reduction in future compact payments “as a result of the excess payments” it had made under the 2006 Amendment:

5. CONTINGENCY FEE

Client agrees to pay Firm an additional contingency fee in the event Client receives a monetary award or other sum resulting from the representation . . . The contingency fee will be a percentage of the “net recovery,” depending on the stage at which the settlement or judgment is reached. The term “net recovery” means the total of all amounts received by settlement, court award or judgment, including but not limited to any award of pre- or post-judgment interest or attorney's fees. In the event Client's matter is resolved via negotiation or settlement, the term “net recovery” shall include any credit, offset or other reduction in future compact payments to the State in a successor compact (whether new or amended) as a result of the excess payments made under [the 2006 Amendment] in lieu of or in addition to a monetary “net recovery.” Whether resolved through negotiation, settlement, or legal action, the contingency percentages . . . shall be calculated by totaling the amounts Client receives - both monetary and/or as a credit, offset, or other reduction in future compact payments - for the excess payments it made under [the 2006 Amendment] . . . Firm's contingency fee will be calculated as follows if the representation matter is resolved through settlement or negotiations:

(a) If the matter is resolved before the filing of a lawsuit or within 12 months thereof, then Firm's contingency fee will be fifteen percent (15%) of the net recovery.

[ . . . ]

(c) For purposes of subsection (a) alone, the matter is resolved at the point in time that the Client signs a successor compact (whether new or amended), which subsequently obtains the requisite State and federal approvals and takes effect under the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq.

Id. ¶ 4.

Before the Quechan Tribe executed the Fee Agreement, Williams in an email of September 16, 2016 explained to the Tribal Council the scope of the contingency fee arrangement, distinguishing between reductions in future compact payments (i) offered by the State of California for past excess payments made under the 2006 Amendment, to which the contingency fee would apply; and (ii) those offered “during the normal give and take of negotiating . . . to end the dispute without court directives,” to which the contingency fee would not apply:

To be clear, the contingency amount will only apply to the actual value Quechan receives for the excess payments the Tribe made to the State of California under [2006 Amendment] . . . [I]f Quechan decides [] to pursue settlement now or at any point in the future, the contingency rate would only apply to any revenue sharing rate reduction the Tribe receives as a credit or reimbursement of sorts for its past excess payments, and not any standard (albeit slight) reduction the State offers during the normal give and take of negotiating in an attempt to end the dispute without court directives.

ECF No. 327-3 at 3.

Paragraph 11 of the Fee Agreement authorized the Quechan Tribe to terminate W&C at will. It provided, however, that if the Quechan Tribe terminated W&C before W&C became entitled to a contingency fee under Paragraph 5, W&C would instead be entitled to a “reasonable fee” for legal services performed....