John Breen, Plaintiff-Appellant, v. Total Quality Logistics, Defendant-Appellee.
No. 16AP-3
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
February 7, 2017
[Cite as Breen v. Total Quality Logistics, 2017-Ohio-439.]
(M.C. No. 2014 CVF 8306) (REGULAR CALENDAR)
Rendered on February 7, 2017
On brief: Breen Law, and John E. Breen, for appellant. Argued: John E. Breen.
On brief: Lindhorst & Dreidame, Barry F. Fagel and James L. O‘Connell, for appellee. Argued: Barry F. Fagel.
APPEAL from the Franklin County Municipal Court
KLATT, J.
{¶ 1} Plaintiff-appellant, John Breen, appeals from a judgment of the Franklin County Municipal Court granting sanctions for his frivolous conduct in filing a complaint against defendant-appellee, Total Quality Logistics (“TQL“). For the following reasons, we affirm that judgment.
I. Factual and Procedural Background
{¶ 2} TQL is a company mainly engaged in the logistics business, i.e., brokering freight shipments throughout the United States. In 2009 or 2010, TQL hired a law firm, The Law Offices of John Alden (“the firm“), to handle its collections litigation. TQL and the firm entered into a contingency agreement whereby the firm would be paid a third of
{¶ 3} In 2011, Breen represented TQL in a matter against C&L Logistics (“C&L“), a Florida-based contract carrier. TQL alleged that C&L damaged cargo while in shipment and otherwise breached its agreement with TQL resulting in a loss of $55,776.40. Breen engaged in settlement discussions with C&L on behalf of TQL. C&L initially offered TQL $10,000 to settle the case. C&L later raised the settlement offer to $25,000 and then to $30,000. TQL‘s corporate counsel, Chris Brown, rejected these settlement offers. After Brown rejected the $30,000 offer, Breen withdrew as counsel for TQL in the matter. Neither the firm nor Breen received any compensation from TQL in connection with Breen‘s representation of TQL in this matter. TQL ultimately recovered nothing from C&L.
{¶ 4} On March 17, 2014, Breen filed a complaint against TQL asserting claims for breach of contract and quantum meruit arising from Breen‘s legal representation of TQL. Ultimately, both Breen and TQL filed motions for summary judgment. Breen argued that he was entitled to judgment as a matter of law because he provided legal services to TQL and obtained a settlement offer of $30,000 in the matter, which he argued was a recovery whether or not TQL accepted the offer. Breen also argued that TQL and Brown acted in bad faith by rejecting the $30,000 offer in the C&L litigation. Breen alleged that Brown rejected the offer because Brown believed that Breen had not done enough work to get paid out of the settlement. (Aug. 18, 2014 Breen Dep. at 78, 107.) He also accused Brown of not acting in the company‘s best interest by rejecting the offer. Id. at 102. TQL argued that under its agreement with the firm, the firm was entitled to a contingent fee only if TQL received a monetary recovery. Therefore, Breen could not recover because TQL did not accept the $30,000 offer and never obtained a recovery in the C&L matter. TQL also argued that Breen had no claim against it because its agreement was with the firm, not Breen.
{¶ 5} The trial court granted summary judgment to TQL and denied it to Breen. The court concluded that Breen could not recover as a matter of law because TQL did not accept the $30,000 offer, and therefore, did not recover anything in the C&L matter. The
{¶ 6} Subsequently, TQL filed a motion for sanctions based on its contention that Breen‘s complaint constituted frivolous conduct pursuant to
II. Breen‘s Appeal
{¶ 7} Breen appeals the trial court‘s decision granting sanctions and assigns the following errors:
- The lower court erred and abused its discretion in holding that an attorney who sues a former client for non payment of legal fees, based upon breach of contract and/or quantum meruit, which are not paid due to the bad faith and other misconduct of the client, engages in frivolous conduct pursuant to
R.C. 2323.51 . - The lower court abused its discretion in holding that an attorney acts frivolously in seeking payments of unpaid legal fees, when the client refuses the highest and maximum settlement possible, offers conflicting excuses and pretexts for doing so, demands that counsel reduce its percentage fees as a condition of acceptance and then transfers the case to its own local counsel.
- The lower court abused its discretion in disregarding the uncontroverted evidence of record - which was unopposed - showing that defendant‘s newly hired in house counsel, Chris
Brown, who the court observed acted “foolishly,” did not also act in bad faith, in refusing a settlement that was the highest and best attainable, and then demanded to handle the case his way with another attorney and obtained a recovery of zero, and then used his own bad judgment as a basis to refuse payment to plaintiff. - The lower court erred in conducting proceedings pursuant to
R.C. 2323.51 , by essentially misunderstanding the procedure to be a perfunctory submittal of legal bills. - The lower court erred in failing to reach any findings of fact or conclusions of law relative to each alleged instance of frivolous conduct.
- The lower court erred in admitting general time sheets, without supporting substantiation, when the sheets contained admitted errors and hearsay, and without expert testimony to substantiate the reasonableness of the fees.
A. Statutory Provisions for Frivolous Conduct
{¶ 8}
(i) It obviously serves merely to harass or maliciously injure another party to the civil action or appeal or is for another improper purpose, including, but not limited to, causing unnecessary delay or a needless increase in the cost of litigation.
(ii) It is not warranted under existing law, cannot be supported by a good faith argument for an extension, modification, or reversal of existing law, or cannot be supported by a good faith argument for the establishment of new law.
(iii) The conduct consists of allegations or other factual contentions that have no evidentiary support or, if specifically so identified, are not likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.
(iv) The conduct consists of denials or factual contentions that are not warranted by the evidence or, if specifically so identified, are not reasonably based on a lack of information or belief.
{¶ 10} For a trial court to award sanctions under this statute, it must first conduct a hearing and allow the parties and counsel of record involved to present any relevant evidence, determine that the conduct involved was frivolous and that a party was adversely affected by it, and then determine the amount of the award to be made.
B. Standard of Review
{¶ 11} No single standard of review applies in
{¶ 12} In its motion for sanctions, TQL argued that Breen‘s conduct in filing and continuing to prosecute his claim was frivolous pursuant to
{¶ 13} We now address Breen‘s assignments of error, although we do so out of order for analytical clarity.
C. Breen‘s Fifth Assignment of Error-The Absence of Factual Findings
{¶ 14} In his fifth assignment of error, Breen points out that the trial court did not make any factual findings in its decision granting TQL‘s motion. This omission, however, does not constitute error. First, Breen did not request factual findings or conclusions of law. Law Office of Natalie F. Grubb v. Bolan, 11th Dist. No. 2010-G-2965, 2011-Ohio-4302, ¶ 24 (“Absent a request in accordance with
{¶ 15} Accordingly we overrule Breen‘s fifth assignment of error.
D. Breen‘s First, Second, and Third Assignments of Error-Did he Engage in Frivolous Conduct?
{¶ 16} We consider these assignments of error together because they each challenge the trial court‘s ultimate conclusion that Breen engaged in frivolous conduct. Specifically, Breen argues that his complaint sought recovery for his unpaid legal services under two well-recognized causes of actions: breach of contract and quantum meruit and, therefore, the filing of the complaint cannot be frivolous conduct. We disagree.
{¶ 17} We interpret Breen‘s argument as contesting the frivolousness of his conduct under
{¶ 18} Both of Breen‘s causes of action fail as a matter of law. First, Breen cannot recover under a breach of contract theory because he did not have a contract with TQL. TQL‘s contract for legal services was with the firm. Spoerke v. Abruzzo, 11th Dist. No. 2013-L-093, 2014-Ohio-1362, ¶ 29, quoting Ireton v. JTD Realty Invests., LLC, 12th Dist. No. CA2010-04-023, 2011-Ohio-670, ¶ 38 (“The existence of an enforceable contract is a prerequisite to a claim for breach of contract.“); Federman v. Christ Hosp., 1st Dist. No. C-120484, 2013-Ohio-5507, ¶ 14 (affirming dismissal of breach of contract claim where no contract existed). Additionally, even when a contingent fee agreement is in effect at the time of an attorney‘s discharge, a discharged attorney recovers on the basis of quantum meruit, not pursuant to the terms of the agreement. Fox & Associates Co., L.P.A. v. Purdon, 44 Ohio St.3d 69, 72 (1989); Reid, Johnson, Downes, Andrachik & Webster v. Lansberry, 68 Ohio St.3d 570, 573 (1994); Zunshine v. Cott, 10th Dist. No. 08AP-347, 2009-Ohio-439, ¶ 15; Brancatelli v. Soltesiz, 11th Dist. No. 2009-L-10, 2009-Ohio-6861, ¶ 23. Thus, Breen cannot as a matter of law recover under a breach of contract theory.
{¶ 19} Second, Breen also cannot recover under a theory of quantum meruit. When an attorney representing a client pursuant to a contingency fee agreement is discharged, the attorney‘s cause of action for a fee recovery on the basis of quantum meruit arises upon the successful occurrence of the contingency. Reid at paragraph two of the syllabus; Renner, Otto, Boisselle & Sklar, L.L.P. v. Estate of Siegel, 8th Dist. No. 101861, 2015-Ohio-1839, ¶ 26. A discharged attorney cannot recover if the client recovers nothing. Id., citing Doellman v. Midfirst Credit Union, Inc., 12th Dist. No. CA2006-06-074, 2007-Ohio-5902, ¶ 23; Reid. Here, since TQL recovered nothing in the C&L litigation, Breen is not entitled to recovery under quantum meruit. Taylor v. Geer, 10th Dist. No. 00AP-159 (Dec. 21, 2000); Hawthorne v. Benton Ridge Tel. Co., 10th Dist. No. 99AP-1476 (Nov. 9, 2000).
{¶ 20} Breen argues that TQL recovered nothing only because Brown acted in bad faith by rejecting the $30,000 offer. However, it is solely within the client‘s discretion whether to accept or reject a settlement offer. Bernard v. Moretti, 34 Ohio App.3d 317, 319 (10th Dist.1987). See also Michael D. Tully, Co., L.P.A. v. Dollney, 42 Ohio App.3d 138, 140 (9th Dist.1987) (noting that clients are free to reject any settlement offers). While our decision in Bernard does note that there was no evidence of bad faith in the client‘s motive to reject a settlement offer, that case involved a breach of contract action, which is not available to Breen in this case.2 In an action for quantum meruit, this court has indicated that the only circumstance that would allow for recovery in this factual situation is where the attorney could demonstrate fraud or collusion. Hawthorne, citing Paxton v. Dietz, 10th Dist. No. 84AP-972 (May 28, 1985). Breen has not made nor even alleged such a demonstration.
{¶ 21} In light of this existing relevant law, Breen could not recover against TQL. Thus, we conclude that no reasonable attorney would have brought this action and that the filing of the complaint herein constitutes frivolous conduct as defined in
E. Breen‘s Fourth and Sixth Assignments of Error-The Award of Attorney Fees
{¶ 22} We address these assignments of error together because they both challenge the evidence supporting the trial court‘s award of attorney fees. Breen first argues that the trial court erred by admitting the monthly billing sheets presented by TQL‘s attorney because they were hearsay. We disagree.
{¶ 24} Breen further argues that counsel should have also presented supporting time slips, payment records, ledgers, or cover letters with the billing sheets. We disagree. Breen has not provided any support for such a requirement. Nor are we aware of such a requirement.
{¶ 25} Breen also argues that there was no evidence indicating the reasonableness of the attorney fees. Again, we disagree. TQL‘s attorney testified at the hearing that his hourly rate and the time expended in this action were both fair and reasonable. (Mot. Hearing at 18.) He also submitted monthly itemized billing statements and testified that the time he spent on this case was “reasonable and necessary to both defend this case, to obtain the outcome that we obtained and, in addition, to bring this motion for sanctions and to defend against his motion for sanctions.” Id. at 21. While expert testimony may be presented to address this issue, we have never found such testimony to be necessary in order to support a finding that attorney fees were reasonable. Hadden Co., L.P.A. v. Zweier, 10th Dist. No. 15AP-210, 2016-Ohio-2733, ¶ 23-25 (attorneys’ own testimony regarding reasonableness of fees charged was sufficient to support award). See also
{¶ 26} Last, Breen‘s related arguments about the bills, such as discrepancies among bills, reductions in some bills and the vagueness of some billing entries, all go to the weight of the evidence supporting the award and not the admissibility of that evidence. The trial court reviewed the evidence and found that it supported an award of attorney fees. That decision is supported by competent and credible evidence and, as such, is not against the manifest weight of the evidence. Hawkins v. Miller, 11th Dist. No. 2011-L-036, 2011-Ohio-6005, ¶ 30 (rejecting manifest weight argument upon a finding of competent and credible evidence to support fee award).
{¶ 27} For all of these reasons, we overrule Breen‘s fourth and sixth assignments of error.
III. Conclusion
{¶ 28} Having overruled Breen‘s six assignments of error, we affirm the judgment of the Franklin County Municipal Court.
Judgment affirmed.
BROWN, J., concurs.
BRUNNER, J., dissents.