Breen v. Total Quality Logistics
2017 Ohio 439
| Ohio Ct. App. | 2017Background
- TQL contracted with a law firm on a contingency basis to handle collections; Breen was an independent-contractor attorney retained by that firm and paid by the firm (not by TQL).
- Breen represented TQL in a 2011 matter against C&L; settlement offers up to $30,000 were made but TQL (through in-house counsel Brown) rejected them and recovered nothing. Breen received no payment.
- In 2014 Breen sued TQL for unpaid fees, asserting breach of contract and quantum meruit. TQL moved for summary judgment and the trial court granted it; Breen did not appeal that judgment.
- TQL then moved for sanctions under R.C. 2323.51 and Civ.R. 11, alleging Breen’s suit was frivolous; after a hearing the trial court awarded TQL $15,000 in attorney fees as sanctions.
- Breen appealed, arguing (inter alia) the complaint was not frivolous because breach/quantum meruit are valid claims, the court failed to make findings of fact, and the fee evidence was inadmissible or insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Breen’s suit was frivolous under R.C. 2323.51(A)(2)(ii) (no reasonable attorney would bring it) | Breen: breach of contract and quantum meruit are recognized claims for unpaid fees; his claim was legally viable and not frivolous | TQL: under existing Ohio law a discharged contingency attorney may recover only by quantum meruit and only if the client obtains a recovery; TQL recovered nothing, so no viable claim existed | Held: filing was frivolous — Breen could not recover on breach (no contract with TQL) and quantum meruit fails because the contingency never occurred; no reasonable attorney could have maintained the suit |
| Whether alleged bad faith by TQL’s in-house counsel (in rejecting settlement) would permit recovery | Breen: Brown acted in bad faith rejecting the $30,000 offer, so recovery should be possible | TQL: client has sole discretion to accept settlement; absent fraud or collusion a discharged contingency attorney cannot recover when client obtains nothing | Held: bad-faith speculation insufficient; Ohio law bars recovery absent fraud/collusion when client recovers nothing |
| Whether the trial court’s failure to issue written findings of fact/ conclusions required reversal | Breen: court erred by not making factual findings/conclusions on each alleged instance of frivolous conduct | TQL: Civ.R. 52 findings not required absent a request; R.C. 2323.51 does not mandate written findings | Held: no reversible error — Breen did not request findings and record contained basis to affirm |
| Admissibility and sufficiency of fee evidence supporting the sanctions award | Breen: billing sheets were hearsay, lacked supporting slips/ledgers, and no expert showed reasonableness | TQL: billing statements admitted under Evid.R. 803(6) business-records exception and attorney’s testimony supported reasonableness | Held: billing records admissible and attorney testimony sufficed to establish reasonable fees; challenges affected weight not admissibility |
Key Cases Cited
- Fox & Associates Co., L.P.A. v. Purdon, 44 Ohio St.3d 69 (Ohio 1989) (discharged attorney recovers in quantum meruit, not on contract terms)
- Reid, Johnson, Downes, Andrachik & Webster v. Lansberry, 68 Ohio St.3d 570 (Ohio 1994) (reaffirms quantum meruit as remedy for discharged contingency counsel and conditions of recovery)
- Bernard v. Moretti, 34 Ohio App.3d 317 (10th Dist. 1987) (clients have discretion to accept or reject settlements)
- State v. Davis, 116 Ohio St.3d 404 (Ohio 2008) (explaining foundational requirements for the business-records hearsay exception)