SCHOTTENSTEIN, ZOX & DUNN CO., L.P.A. v. LELAND M. REINEKE aka MATT REINEKE
C.A. No. 10CA0138-M
IN THE COURT OF APPEALS NINTH JUDICIAL DISTRICT
December 5, 2011
[Cite as Schottenstein Zox & Dunn Co., L.P.A. v. Reineke, 2011-Ohio-6201.]
WHITMORE, Judge.
APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF MEDINA, OHIO CASE No. 08CIV1032
WHITMORE, Judge.
{1} Defendant-Appellant, Leland M. Reineke, appeals from the judgment of the Medina County Court of Common Pleas Court. This Court affirms.
I
{2} On May 30, 2008, Plaintiff-Appellee, Schottenstein, Zox, & Dunn Co., L.P.A. (“Schottenstein“), filed a complaint against Reineke to collect money owed on invoices for attorney fees and expenses in the amount of $37,542.61, plus interest. A jury trial was held on June 1 and June 2, 2010. At the conclusion of Schottenstein‘s case, Reineke moved to dismiss on the grounds of insufficient evidence. The court treated the motion to dismiss as a motion for a directed verdict and denied it. At the conclusion of all the evidence, the trial court dismissed count two of the complaint, a claim based on quantum meruit, leaving for the jury‘s consideration counts one and three, claims on an account and contract, respectively.
{4} The complaint in this case arises from a domestic relations matter. In February 2003, Reineke signed an engagement letter authorizing Schottenstein attorney Robert K. Danzinger, a partner with the firm, to represent him with respect to the drаfting of a separation agreement. The engagement letter specified an hourly rate of $210.00 and a retaining fee of $2,500. The separation agreement was never utilized because Reineke‘s wife, Juliana Reineke, filed a divorce action against him in the Medina County Domestic Relations Court. That case was dismissed on February 7, 2005. Directly following the dismissal of the Medina County case, Schottenstein filed a divorce action on Reineke‘s behalf against Juliana Reineke in Ashland County, which was also subsequently dismissed. On or about the same day as the Ashland Cоunty filing, Juliana Reineke initiated a divorce action against Reineke in the state of Michigan, where she was residing with the couple‘s children. Schottenstein‘s representation of Reineke in these matters continued until July 2005, when he terminated Schottenstein‘s services. The fees at issue here pertain to Schottenstein‘s invoices for legal fees and expenses incurred from February 2005 through July 2005.
II
Assignment of Error
“THE TRIAL COURT COMMITTED PREJUDICIAL ERROR BY OVERRULING THE APPELLANT‘S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT AND FOR NEW TRIAL WHERE THE APPELLEE DID NOT PRODUCE SUFFICIENT EVIDENCE AT TRIAL TO RECOVER DAMAGES FOR ATTORNEY FEES.”
{6} As an introductory matter, this Court will address Schottenstein‘s contention that Reineke‘s notice of appeal was not timely filed within the requirements of
{7} We turn now to the merits of Reineke‘s assignment of error. Reineke contends that the trial court erred in denying his motion for JNOV and new trial because Schottenstein
{8} With respect to appellate review of a trial court‘s decision on a motion for JNOV, this Court has held that:
“After a court enters judgment on a jury‘s verdict, a party may file a JNOV to have the judgment set aside on grounds other than the weight of the evidence. See
Civ.R. 50(B) . As with an appeal from a court‘s ruling on a directed verdict, this Court reviews a trial court‘s grant or denial of a JNOV de novo. Williams v. Spitzer Auto World Amherst, Inc., 9th Dist. No. 07CA009098, 2008-Ohio-467, at ¶9. JNOV is proper if upon viewing the evidence in a light most favorable to the non-moving party and presuming any doubt to favor the nonmoving party reasonable minds could come to but one conclusion, that being in favor of the moving party. Williams at ¶9, citingCiv.R. 50(B) . If reasonable minds could reach different conclusions, the motion must be denied. Garcea v. Woodhull, 9th Dist. No. 01CA0069, 2002-Ohio-2437, at ¶10.” Waugh v. Chakonas, 9th Dist. Nos. 25417 & 25480, 2011-Ohio-2764, at ¶7.
{9} Our standard of review regarding the trial court‘s decision on a motion for a new trial depends upon the grounds of the motion. “Depending upon the basis of the motion for a new trial, this Court will review a trial court‘s decision to grant or deny the motion under either a de novo or an abuse of discretion standard of review.” Calame v. Treece, 9th Dist. No. 07CA0073, 2008-Ohio-4997, at ¶13, citing Rohde v. Farmer (1970), 23 Ohio St.2d 82, paragraphs one and two of the syllabus. “[W]hen the basis оf the motion involves a question of law, the de novo standard of review applies, and when the basis of the motion involves the determination of an issue left to the trial court‘s discretion, the abuse of discretion standard applies.” Dragway 42, L.L.C. v. Kokosing Constr. Co., Inc. 9th Dist. No. 09CA0073, 2010-Ohio-4657, at ¶32.
{11} “When considering a
{12} Reineke first argues that Schottenstein did not establish a contract with him relative to the fees at issue. He contends that the engagement letter is not applicable because it only pertained to the preparation of the separation agreement, which never occurred or was rendered moot by the Medina County divorce filing. He also relies on the fact that the parties never executed a new written agreement upon the divorce filing. He further maintains that
“To set forth a claim for breach of contract, a complaining party must prove the following elements by a preponderance of the evidence: (1) that a contract existed; (2) that the complaining party fulfilled its сontractual obligations; (3) that the opposing party failed to fulfill its obligations; and (4) that the complaining party incurred damages as a result of this failure.” Community Health Partners Physicians, Inc. v. Sharbeck, 9th Dist. No. 10CA009874, 2011-Ohio-4033, at ¶7, quoting H & F Transp., Inc. v. Satin Ride Equine Transport, Inc., 9th Dist. No. 06CA0069-M, 2008-Ohio-1004, at ¶18.
{13} Reineke does not dispute that the engagement letter executed by the parties constitutes an express written contract for the preparation of the separation agreement or that the invoices at issue remain unpaid. Rather, he argues that the engagement letter ceased to control when his wife filed for divorce and no contract was entered into for further services.
{14} The language of the engagement letter, which was introduced as evidence at the trial, made specific reference to “the possibility of the occurrence of unpredictable and unforeseen circumstances” that would prevent Danzinger from quoting “a final and specific fee” and that “[t]his is particularly true in a situation such as yours, which is essentially adversary in nature.” The agreement also stated that the recording of time would apply to the “drafting of pleadings” and “preparation for and appearances in court,” neither of which would be necessary for a separation agreement, but instead, pertain to a lawsuit or other contested matter. The letter also referenced “unforeseen complexities that may result during negotiations.” Thus, by its very terms, the engagement letter contemplated an ongoing relationship between the parties of an unspecified duration due to the high likelihood of unpredictable and unforeseeable events in the case, including, inter alia, the potential filing of a divorce action. Accordingly, the evidence
{15} Even if the evidence did not support the finding of an express contract between the parties for services rendered in the eventual divorce, the evidence establishes, alternatively, that the parties’ conduct and expectations created an implied contract as the divorce proceeded. The Ohio Supreme Court has held that “an attorney-client relationshiр need not be formed by an express written contract or by the full payment of a retainer. Instead, *** an attorney-client relationship may be created by implication based upon the conduct of the parties and the reasonable expectations of the person seeking representation.” Cuyahoga Cty. Bar Assn. v. Hardiman, 100 Ohio St.3d 260, 2003-Ohio-5596, at ¶8; see, also, New Destiny Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 2011-Ohio-2266, at ¶26.
{16} Reineke testified at trial that after his wife filed for divorce in Medina County, he continued to confer with Danzinger and “then [Danzinger] was doing the work for it. So [Danzinger] was continuing on with the divorce case once it was filed.” Reineke further testified that as the divorce proceeded, Danzinger continued to do work on the case, billed him monthly, and that he was paying the bills. In fact, prior to the instant action, Reineke paid roughly $96,000 in legal fees to Schottenstein. Further, there was no evidence presented at trial demonstrating that Reineke terminated their attorney-client relationship until July 2005 during the pendency of the Ashland County and Michigan divorce cases.
{17} Based on the foregoing, the record is clear that Reineke expected Schottenstein would represent him in the divorce, and in turn, Reineke continued to pay the bills. Therefore, as evidenced by the parties’ conduct and mutual expectations, their attorney-client relationship also continued by implication.
“To establish a prima facie case for money owed on an account, a plaintiff must demonstrate the existence of an account, including that the account is in the name of the party charged, and it must also establish (1) a beginning balance of zеro, or a sum that can qualify as an account stated, or some other provable sum; (2) listed items, or an item, dated and identifiable by number or otherwise, representing charges, or debits, and credits; and (3) summarization by means of a running or developing balance, or an arrangement of beginning balance and items that permits the calculation of the amount claimed to be due.” Great Seneca Financial v. Felty, 1st Dist. No. C-050929, 2006-Ohio-6618, at ¶6; see, also, Climaco, Seminatore, Delligati & Hollenbaugh v. Carter (1995), 100 Ohio App.3d 313, 320.
{19} In support of his argument, Reineke primarily relies upon Cooper & Pachell in which this Court affirmed the trial court‘s finding that the plaintiff had not satisfied the requirements of an action on an account. Cooper & Pachell, 142 Ohio App.3d at 708. However, Cooper & Pachell is distinguishable from the instant matter. In Cooper & Pachell, the law firm sued for attorney fees for legal and tax planning work. Id. at 706. In upholding the trial court‘s finding, we reasoned as follows, in pertinent part:
“In support of the alleged debt, appellant offered a law firm ledger with columns of numbers, which merely lists dates, amounts charged, amounts paid, and balances. The ledger has no specific description of the service provided and to whom the service was rendered, which is important, considering that services were allegedly rendered for Kenneth Haslage in a personal capacity, Haslage‘s wife, and Form-A-Thread. Attorney Jim Pachell was the sole witness for
appellant, and he provided general answers about general services rendered. However, Pachell could not specifically set forth the services rendered on specific dates, for whom specific services were rendered, whether the services were authorized, and which of the services were and were not paid for. *** While Pachell testified that as a general matter firm services were paid at rates of $150, $135, and $90 per hour, Pachell could not specifically testify as to the rate charged for services provided to appellees. ***
“For the appellees, Haslage testified that he was aware that $6,693 was supposedly due and owing, but that bills were never itemized to reflect what work was done and by whom. The bills never identified precisely who was liable (i.e. Haslage, his wife, or Form-A-Thread) for what services. Haslage regularly questioned the bills sent by appellant and felt they were being overbilled. ***
“The trial court aptly summarized the amorphous nature of appellant‘s evidence in its order: ‘Plaintiff offered no exhibits or individual testimony breaking down or itemizing the charges in their account showing what service was rendered, by whom and the hourly rate used.’ Appellant‘s lack of specificity was manifest throughout the record.” Id. at 707-08.
{20} Here, Schottenstein introduced into evidence monthly invoices showing the charges from February 2005 through July 2005. Since Reineke was Schottenstein‘s only client in the domestic case, the question as to who was liable for the services is not an issue as it was in Cooper & Pachell where there were multiple clients. Nonetheless, Reineke‘s name and address were disрlayed at the top of each invoice, clearly identifying him as the liable party. The invoices also contained a ledger that included columns for the date of the service, the initials of the firm member responsible, the time expended, as well as a brief description of the services rendered. At the end of each invoice, if applicable, was an itemization of expenses, any amounts credited for the month, and a final invoice total. Schottenstein‘s credit manager, Jeff Deibel, testified that all bills prior to the March 2, 2005 invoice, which contained the charges for February 2005, had been paid, and that the February 2005 through July 2005 charges comprised the total of the open account. It is a simple mathematical exercise to add the monthly invoice totals and arrive at the sum of $37,542.61, the amount sought in the complaint. While Deibel could not testify as to the rate charged, the engagement letter specifically set forth Danzinger‘s
{21} Based on the foregoing, we conclude that Cooper & Pachell is distinguishable from the case at bar and that the unpaid invoices comply with the requirements for an account. Reineke‘s account with Schottenstein had a zero balance as of the March 2, 2005 invoice. The invoices identify the liable party, dates of service, amount of time expended and by whom, description of thе services rendered, and a total sum due. Reineke consented to the hourly rate, was put on notice that different rates may be charged when appropriate, and never questioned the bills. Therefore, taken as a whole, the invoices comply with the requirements of an account. Great Seneca Financial, 170 Ohio App.3d at 741; Cooper & Pachell, 142 Ohio App.3d at 707-08. Accordingly, the evidence supports the existence of a proper account.
{22} The remaining issue raised by Reineke is whether the fees listed on the account are reasonable. Reineke contends that Schottenstein did not present any evidence of the reasonableness, value, or necessity of the fees. We disagree.
{23} The test for determining the reasonableness of attorney fees is as follows:
“Compensation for services rendered by an attorney is generally fixed by contract prior to employment and the formation of the fiduciary relationship between attorney and client. Jacobs v. Holston (1980), 70 Ohio App.2d 55. After the fiduciary relationship is established, the attorney has the burden of establishing the reasonableness and fairness of fees. Id. Where, prior to employment, the attorney and client have reached an agreement as to the hourly rate to be charged and the amount of the retaining fee, but the agreement fails to provide for the number of hours to be expended by the attorney, in an action for attorney fees the burden of proving that the time was fairly and properly used and the burden of showing the reasonableness of work hours devoted to the case rest on the
attorney. Id. Furthermore, a trial court must base its determination of reasonable attorney fees upon actual value of the necessary services performed, and there must be some evidence which supports the court‘s determination. In re Hinko (1992), 84 Ohio App.3d 89. In making such a determination, the court must consider many important factors, including those set forth in Pyle v. Pyle (1983), 11 Ohio App.3d 31, 35:
“‘*** (1) [T]ime and labor, novelty of issues raised, and necessary skill to pursue the course of action; (2) customary fees in the locality for similar legal services; (3) result obtained; and (4) experience, reputation and ability of counsel. See DR 2-106(B), Code of Professional Responsibility; Annotation (1974), 57 A.L.R.3d 475.’ Id. at 35.” Climaco, 100 Ohio App.3d at 323-24.
{24} DR 2-106(B), referenced above, sets forth the factors to be considered when dеtermining the reasonableness of a fee. We note that DR 2-106(B) has been superseded by
{25} In the instant case, the parties had reached an agreement as to the hourly rate and retaining fee at the time of Schottenstein‘s employment. However, the agreement did not provide for the total number of hours to be expended. Thus, Schottenstein carried the burden of
{26} At trial, Danzinger took the stand and testified at length concerning his representation of Reineke and the reasonableness of the fees sought in the complaint. Danzinger testified that he is a Martindale-Hubbell AV rated attorney who specializes in domestic relations cases and, at the time, was a partner at Schottenstein. He testified that Reineke‘s divorce case was one of the most difficult, complicated, complex, and emotionally-charged casеs of his career and that he spent “two-plus years” and “more effort and more energy in a case than I ever had.” Danzinger further testified that the case involved significant personal and corporate assets and required the valuation of nine businesses. The case was also extremely adversarial and involved highly complex and contentious issues regarding child custody, visitation, spousal support, property division, and dueling jurisdictions. As a result, the case required extensive discovery of financial information and numerous communications between Danzinger and Reineke. Danzinger testified that the invoices “accurately reflect the amount of time” spent on the case, and that on occasion, he spent more time on the case than what was billed. Furthermore, Danzinger testified that the desired result was ultimately obtained; specifically, dismissal of the Medina County case.
{27} In turn, Reineke argues that pursuit of the dismissal resulted in the overbilling of fees because it involved the last-minute preparation and filing of a significant number of motions and briefs regarding opposing counsel‘s discovery tactiсs and requests the day before trial. Yet, both Danzinger and Reineke testified that it was their agreed strategy to seek dismissal of the Medina County case. Danzinger testified that the dismissal strategy was not only discussed at length with Reineke, but was necessary for several tactical reasons intended to advance the best
{28} Moreover, the record does not disclose that Reineke expressed any dissatisfaction during the attorney-client relationship regarding fees. There is no evidence that he ever contested the accumulation of fees or demonstrated concern about the quality of Danzinger‘s representation. He received invoices on a monthly bаsis and paid them. When he got in arrears on the fees, his father took out a loan for the outstanding balance so that Schottenstein‘s representation could continue. Accordingly, Reineke‘s argument has no merit. See, e.g., Reminger & Reminger Co, L.P.A. v. Fred Siegel Co., L.P.A., (March 1, 2001), 8th Dist. No. 77712, at *7-8 (upholding trial court‘s determination that fees were reasonable where client failed to complain about the excessiveness of the fees while receiving periodic billings, prior to the termination of the representation, and where record demonstrated presentation of competent, credible evidence concerning reasonableness of fees).
{30} In sum, the record here established that the jury‘s verdict was supported by the evidence. Schottenstein presented competent, credible evidence regarding the existence of a contract and an open account. Schottenstein also carried its burden of establishing the reasonableness, value, and necessity of its fees pursuant to the standards set forth in Pyle, Climaco, and
III
{31} Reineke‘s sole assignment of error is overruled. The judgment of the Medina County Court of Common Pleas is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run.
Costs taxed to Appellant.
BETH WHITMORE
FOR THE COURT
MOORE, J. CONCURS
APPEARANCES:
THOMAS L. MASON, Attorney at Law, for Appellant.
RANDY D. TRAMMEL, Attorney at Law, for Appellee.