Law Offices of Russell A. Kelm v. Selby
100 N.E.3d 108
| Ohio Ct. App. | 2017Background
- Selby hired the Law Offices of Russell A. Kelm on a contingency agreement (33 1/3% of any recovery from Abbott exceeding a prior severance offer) to pursue an ADEA/age-discrimination claim after Abbott made a severance offer that expired April 11, 2014.
- The firm negotiated with Abbott and secured a revised lump‑sum severance offer of $52,304.40 (no reduction upon reemployment). Selby signed Abbott’s final form on July 24, 2014 but did not notify the Kelm firm and moved to Illinois in August 2014.
- The Kelm firm billed Selby (hourly and contingency calculations) in August 2014 and sent demand emails in November 2014; after nonpayment the firm sued Selby for fees asserting breach of contract and quantum meruit.
- The trial court dismissed the breach‑of‑contract count, concluding Selby had effectively discharged the firm, and allowed the quantum meruit claim to proceed (bench trial).
- After a bench trial, the court found Selby had constructively terminated the attorney‑client relationship, that the firm conferred a benefit (the revised, unconditional lump‑sum), and awarded $11,515.07 under quantum meruit (crediting trust funds and a $500 omitted expense).
- Both parties appealed: Selby challenged entitlement to fees, the finding of discharge, and fee reasonableness; the Kelm firm argued the court undervalued fees (seeking an hourly quantum‑meruit award higher than the court’s award).
Issues
| Issue | Plaintiff's Argument (Kelm firm) | Defendant's Argument (Selby) | Held |
|---|---|---|---|
| Whether the firm may recover fees when the contingency condition (recovery exceeding Abbott’s original offer) was not met | Firm: performed work that produced a materially different settlement (lump sum, no reemployment offset) and therefore is entitled to reasonable value under quantum meruit | Selby: contingency not satisfied (recovery not in excess of original offer), so no fee due under contract or quantum meruit | Court: Firm entitled to quantum meruit; final settlement changed material terms (lump sum/no offset) so firm conferred a benefit and may recover reasonable value |
| Whether Selby discharged the firm (entitling firm to quantum meruit rather than contractual contingent fee) | Firm: relationship ended when Selby accepted settlement without notifying firm; fee recovery should be on quantum meruit | Selby: he did not discharge the firm; he and firm performed under contingency agreement so contingency failure bars recovery | Court: factual finding Selby constructively terminated the relationship (silence after signing and failing to inform counsel); no abuse of discretion in that finding |
| Proper measure of recovery: contingency fee percentage vs. hourly quantum‑meruit calculation | Firm: under quantum meruit it should recover reasonable value based on hourly rates and hours (higher amount asserted) | Selby: trial court correctly limited recovery to reasonable value up to discharge date; contingency percentage is persuasive evidence of value | Court: used contingency agreement as evidence of value at time of discharge and awarded amount consistent with parties’ prior agreement; no abuse of discretion |
| Whether expert testimony was required to prove fee reasonableness | Firm: attorney testimony and invoicing suffice; contingency agreement supports valuation | Selby: asserts the court erred by awarding fees without independent expert proving reasonableness | Court: attorney testimony and contemporaneous invoices plus contingency agreement provided sufficient evidence; independent expert not required given circumstances |
Key Cases Cited
- Reid, Johnson, Downes, Andrachik & Webster v. Lansberry, 68 Ohio St.3d 570 (1994) (discharged attorneys may be limited to quantum meruit recovery)
- Aultman Hospital Ass'n v. Community Mut. Ins. Co., 46 Ohio St.3d 51 (1989) (quantum meruit prevents unjust enrichment where services conferred benefit without just compensation)
- Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143 (1991) (appellate courts defer to trial court fee determinations unless amount shocks the conscience)
- Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (1984) (presumption of correctness for trial court findings in bench trials)