Wood v. Carwile

• Decision Date: 25 April 1986
• Docket Number: No. 822105,822105
• Citation: 343 S.E.2d 346,231 Va. 320
• Parties: Wendell W. WOOD, et al. v. Stuart F. CARWILE, et al. Record
• Court: Virginia Supreme Court

Page 346

343 S.E.2d 346

231 Va. 320

Wendell W. WOOD, et al. v. Stuart F. CARWILE, et al.

Record No. 822105.

Supreme Court of Virginia.

April 25, 1986.

James R. Sheeran, Richmond, for appellants.

Edward B. Lowry (Gary W. Kendall, Michie, Hamlett, Donato & Lowry, Charlottesville, on brief), for appellees.

Present: All the Justices.

THOMAS, Justice.

This appeal arises out of a quantum meruit suit for the recovery of legal fees. Stuart F. Carwile, David W. Kudravetz, and Ross W. Krumm, former law partners in the firm of Carwile, Kudravetz & Krumm ^* (hereinafter collectively referred to as "Carwile"), sued Wendell W. Wood and Marlene C. Wood, husband and wife, for the value of legal services rendered to the Woods from January 1975 through September 1978. Suit was filed on February 13, 1981. Carwile asserted that the Woods owed $170,487.66 with interest thereon from October 1, 1980. The trial court ruled that $47,284.26 of the total claim was barred by the statute of limitations. In a jury trial, Carwile secured a joint and several judgment against both the Woods in the amount of $67,750.00 with interest thereon. Further, Carwile secured judgment against Wendell Wood alone in the amount of $44,828.00 with interest thereon.

On appeal, the Woods contend the trial court erred in admitting into evidence their financial statements for the years 1975, 1976, 1977, and 1978. The Woods argue that this evidence was irrelevant in a quantum meruit suit and that its introduction prejudiced them by causing the jury to focus upon their wealth instead of upon the value of the services rendered by Carwile. In our opinion, the trial court did not err in admitting the financial statements; therefore, we will affirm the evidentiary ruling.

Carwile cross-appeals. He contends the trial court erred in limiting his claim to services rendered within three years of the date suit was filed. According to Carwile, the statute of limitations on his entire claim did not begin to run until the termination of his representation of the Woods. We agree. Therefore, we will reverse the trial court's ruling on the statute of limitations issue.

The pertinent facts are as follows: The Woods were real estate developers. They were engaged in numerous complex real estate transactions and related efforts to secure financing for their projects. More specifically, the Woods were involved in the purchase and sale of large tracts of land, the negotiation for and securing of loans from several banks, litigation arising out of various transactions, efforts to resist foreclosure on properties on which payments were in default, searches for additional financing, and the preparation and filing of appropriate tax returns.

Significantly, either both the Woods were or Wendell alone was personally liable on virtually all their transactions, most of which were interrelated. With regard to personal liability, Wendell Wood testified as follows: "[I]n the twenty-one (21) years I have been borrowing money I have always personally endorsed any loans whether it has been through corporations or what, I have always personally endorsed them." Carwile testified that though Mrs. Wood was not personally liable on all the transactions, she was personally liable on certain loans from First and Merchants National Bank, one in the amount of $900,000 and the other in the amount of $2,450,000.

With regard to the relationship among the transactions, Carwile testified at a hearing on the statute of limitations issue that the Woods' transactions were interrelated because they had six or seven major properties and four or five major lending institutions. As a result, according to Carwile,

there was pretty much a continual shifting of collateral from--and of refinancing and by individual banks or collateralization of loans and going from one property to another, subordination collateral--we'd start at one institution, go to another and go to another and there was exchanges of collateral, exchanges of lien priorities in collateral.

Carwile said further that the Woods' transactions could not have been handled separately by attorneys who were not familiar with the other transactions.

In responses to requests for admissions that were read to the jury, Wendell Wood admitted that he requested Carwile to represent him on at least eleven matters including a $400,000 loan from United Virginia Bank in Charlottesville; a dispute with Rio Associates Limited Partnership concerning a $1,495,000 deed of trust; and loans from First and Merchants National Bank in the amounts of $900,000 and $2,450,000. Wood further admitted that "for the period of time covered by the bill for services ... Carwile ... acted as primary counsel for legal work performed on behalf of Wendell Wood ... on matters involving bank financing, transactions, tax planning, tax preparation for all commercial real estate transactions." Further, Wood admitted that he relied upon Carwile "to keep and maintain the records of Wendell Wood's various legal matters which Carwile ... undertook on his behalf." Wood also admitted that on several occasions Carwile's efforts prevented foreclosure on certain properties. Additionally, Wood admitted that he paid fees without designating that they be applied to any specific transaction.

To resolve the question of the relevance of the Woods' financial statements, we must consider two things: (1) what can properly be proved in a quantum meruit claim for legal fees, and (2) the general rules of relevance. We set forth in Co. of Campbell v. Howard, 133 Va. 19, 51, 112 S.E. 876, 885, (1922), the factors that may be taken into account in a suit to recover legal fees based on quantum meruit:

[T]he measure of compensation which attorneys at law are entitled to recover for services rendered under an employment which contains no provision fixing a definite compensation, is the reasonable value of the services rendered, not in benefit to the client, but, in themselves, on a quantum meruit; and ... the circumstances to be considered in determining the compensation to be recovered are--the amount and character of the services rendered; the responsibility imposed; the labor, time and trouble involved; the character and importance of the matter in which the services are rendered; the amount of the money or the value of the property to be affected; the professional skill and experience called for; the character and standing in their profession of the attorneys; and whether or not the fee is absolute or contingent, it being a recognized rule that an attorney may properly charge a much larger fee where it is to be contingent than where it is not so. The result secured by the services of the attorney may likewise be considered; but merely as bearing upon the consideration of the efficiency with which they were rendered, and, in that way, upon their value on a quantum meruit, not from the standpoint of their value to the client.

(Emphasis added) (citations omitted). See also Heinzman v. Fine, Fine, Legum & Fine, 217 Va. 958, 234 S.E.2d 282 (1977). In McNeir v. Greer-Hale Chinchilla Ranch, 194 Va. 623, 629, 74 S.E.2d 165, 169 (1953), we pointed out that

"all facts having rational probative value are admissible unless some specific rule forbids. However, the weight or probative value is not the criterion or test. If it tends even slightly to prove a fact relevant to any issue in the case and material or forceful in the determination thereof, it is admissible. The criterion of relevancy is whether or not the evidence tends to cast any light upon the subject of the inquiry."

(Quoting 7...