Charles Gruenspan Co. v. Thompson, Unpublished Decision (7-10-2003)
Charles Gruenspan Co. v. Thompson, Unpublished Decision (7-10-2003)
Opinion of the Court
{¶ 2} Because the bulk of the assigned errors are procedural in nature, an abbreviated statement of the underlying facts will suffice. Gruenspan represented defendants Robert and Dolores Thompson and several of their companies (the parties have referred to them as the "Thompson defendants") in extended litigation involving two primary cases: the first against the Cuyahoga Metropolitan Housing Authority ("CMHA") and the second against two accounting firms in litigation relating to tax credits on an apartment complex. At some points in that relationship, defendant Alexander Jurczenko acted as co-counsel with Gruenspan. Gruenspan claimed that he had negotiated settlement numbers on behalf of the Thompsons, but they chose not to settle. On the eve of trial, the Thompsons discharged Gruenspan and asked Jurczenko to represent them. Jurczenko then allegedly settled the cases for the same dollar amount that Gruenspan had negotiated. Gruenspan believed that the settlements were reached with the agreement that he would not receive any fees from the settlements.
{¶ 3} Gruenspan brought suit against the Thompson defendants, Jurczenko, CMHA, CMHA's legal counsel, and accountants who represented the parties whom the Thompsons sued, alleging claims ranging from breach of contract, fraudulent conveyance, malpractice, tortious interference with business relationship, breach of fiduciary duty, quantum meruit, conspiracy and intentional infliction of emotional distress. In short, Gruenspan believed that the defendants conspired among themselves to reap the benefits of settlement numbers that Gruenspan had negotiated.
{¶ 4} The court granted summary judgment to a number of defendants and, on the eve of trial, Gruenspan filed a voluntary notice of dismissal without prejudice and sought to appeal the summary judgments. Because the court had not certified the summary judgments pursuant to Civ.R. 54(B), we dismissed the appeal on grounds that the voluntary dismissal disposed of the entire case, including the interlocutory summary judgments. SeeCharles Gruenspan Co., L.P.A. v. Robert Thompson (Oct. 12, 2000), Cuyahoga App. No. 77276.
{¶ 5} Gruenspan refiled his complaint and the defendants again sought summary judgment. The court granted the motions as unopposed because Gruenspan failed to submit opposition in a timely manner. The case proceeded to trial against the remaining defendants and the court found in Gruenspan's favor, awarding him fees of $125,000. Gruenspan contests the summary judgments and is disappointed by the size of the damage award. Other facts will be developed as necessary within individual assignments of error.
{¶ 7} Civ.R. 41(B)(1) states that "where the plaintiff fails to prosecute * * * the court, upon motion of a defendant or on its own motion may, after notice to the plaintiff's counsel, dismiss an action or a claim." The rule does not define what constitutes a failure to prosecute. The Staff Notes cite as examples of a failure to prosecute an appearance at trial by counsel who is completely unprepared or who fails to appear at all. Other examples of grounds for dismissal are violations of rules or court orders. At bottom, the rule appears intended to vindicate the authority of the court by punishing the dilatory party. The United States Court of Appeals for the Second Circuit has construed the analogous federal rule as showing a failure to prosecute "either in an action lying dormant with no significant activity to move it or in a pattern of dilatory tactics." Lyell Theatre Corp. v. Loews Corp. (C.A. 2, 1982),
{¶ 8} Under Civ.R. 4(E), Gruenspan had six months in which to perfect service on Klaiman. He did so just under that deadline. The court's dismissal, coming only three weeks later, was an obvious abuse of discretion, as the dismissal, in effect, punished Gruenspan for taking no action during that three week period.
{¶ 9} Moreover, a Civ.R. 41(B)(1) dismissal for failure to prosecute requires advance notice of the court's intent to dismiss. SeeLogsdon v. Nichols (1995),
{¶ 10} We are aware that Gruenspan had previously filed and dismissed an action against Klaiman, but that procedural fact has no bearing on the dismissal. A party has twelve months to perfect service, see Civ.R. 3(A), and a miminum of six months before the rules authorize the court to take any action. Once Gruenspan perfected service within that six month period, the court's basis for finding a want of prosecution disappeared. Klaiman argues that even if the court erred by dismissing the case against it, we can affirm for different reasons; namely, that Gruenspan's claims are barred by res judicata. The difficulty with this argument is that res judicata is an affirmative defense under Civ.R. 8(C), and a motion to dismiss is "generally not the proper method to raise the affirmative defense of res judicata." State exrel. SuperAmerica Group v. Licking Cty. Bd. of Elections,
{¶ 12} Before addressing the individual arguments presented by Gruenspan, we must consider that the court granted the summary judgments as unopposed. Gruenspan makes no specific argument on appeal that the court erred in doing so, hence he has waived the right to argue his version of the facts on appeal. Of course, even when a motion for summary judgment is unopposed, the motion and supporting evidence must show the absence of any material fact before the court can grant the motion. This is demonstrated by the language of Civ.R. 56(E) which states that if a party does not oppose a motion for summary judgment, "summary judgment, if appropriate, shall be entered against the party." See Mullen v. St. PaulFire Marine Ins. Co. (C.A. 1, 1992),
{¶ 14} Jurczenko did not file an appellee's brief. When the appellee fails to file a brief, we may accept the appellant's statement of the facts and issues as correct and reverse the judgment if appellant's brief reasonably appears to sustain such action. See App.R. 18(C). Unfortunately for Gruenspan, his failure to file opposition to Jurczenko's motion for summary judgment leaves him in the position of failing to submit facts of his own. Since our review of a summary judgment is de novo, we have no choice but to accept the facts stated in Jurczenko's motion for summary judgment.
{¶ 15} "The elements of the tort of tortious interference with contract are (1) the existence of a contract, (2) the wrongdoer's knowledge of the contract, (3) the wrongdoer's intentional procurement of the contract's breach, (4) lack of justification, and (5) resulting damages. See Fred Siegel Co., L.P.A. v. Arter Hadden,
{¶ 16} Jurczenko submitted an affidavit in which he asserted that "I did not solicit this representation." Robert Thompson testified during deposition that his growing dissatisfaction with Gruenspan led him to approach Jurczenko about taking over the case. Thompson testified that Jurczenko told him "he's not the type of attorney that would take cases from another attorney * * *." Thompson persisted with Jurczenko, finally saying, "would you please get this thing settled so that I can save my business?"
{¶ 17} Gruenspan did not offer any facts to refute this assertion. Indeed, shortly before his termination, Gruenspan wrote the Thompsons and acknowledged "that this is not the first time that you have become dissatisfied with my representation in this case." Obviously, the poor relationship between Gruenspan and the Thompsons had existed for several years before Jurcenko's involvement. It follows that the disintegration of the attorney/client relationship began well before Jurczenko's involvement in the case; therefore, as a matter of law, Gruenspan cannot show that Jurczenko interfered with the business relationship between Gruenspan and the Thompsons.
{¶ 19} The necessary elements of a fraud claim are (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance. State ex rel.The Illuminating Co. v. Cuyahoga Cty. Ct. of Common Pleas,
{¶ 20} The evidence shows that Gruenspan first noted his awareness that the Thompsons were dissatisfied with his representation in a letter dated September 5, 1996. That letter closed with Gruenspan's statement that "I will, therefore, suspend my work on this case unless I get instructions otherwise." Up to that point, however, the Thompsons had not formally terminated Gruenspan. That termination came in a letter dated October 17, 1996. Curiously, on October 15, 1996, Gruenspan sent a court reporter a letter in which he advised that "I am no longer the attorney of record of the above captioned matter." Jurczenko memorialized Gruenspan's termination in a letter dated October 21, 1996. The undisputed evidence shows that Jurczenko's negotiations with CMHA did not begin until after he sent the October 21, 1996 letter to Gruenspan.
{¶ 21} Gruenspan disputes whether his termination could have been considered final because the court did not approve his motion to withdraw from the case until after a hearing held in November 1996. It was at this same hearing that the court memorialized the terms of the settlement between the Thompsons and CMHA. He thus maintains that he was still actively representing the Thompsons at the time they settled with CMHA.
{¶ 22} We do not disagree in principle with Gruenspan's argument that Loc.R. 10 of the Cuyahoga County Court of Common Pleas requires that an attorney seeking to withdraw from representation after litigation has been commenced must seek leave from the court. Nevertheless, it would be grossly unjust to apply that rule in the manner suggested by Gruenspan. The court held a hearing on Gruenspan's motion to withdraw because of Gruenspan's insistence that he could not be terminated. In fact, despite filing the motion to withdraw on behalf of his clients, Gruenspan filed his personal opposition to that motion. We understand that Gruenspan did so in an effort to ensure the payment of his attorney fees, but that fact cannot change the nature of what happened. Unbeknownst to the court at the time it conducted the hearing on Gruenspan's conflicting motions, Gruenspan had only minutes earlier filed his first suit against the Thompsons. So not only had Gruenspan told the Thompsons that he would no longer do any work on the case, he indicated to third parties that he was no longer counsel of record and had sued his own client. All of this occurred while Gruenspan was representing to the court that he was still the Thompsons' attorney. It was a functional withdrawal of representation, if not a technical withdrawal for purposes of Loc.R. 10.
{¶ 23} It follows that for purposes of the fraud claim, Gruenspan's representation had terminated as a matter of law such that Jurczenko, not Gruenspan, had been the sole attorney representing the Thompsons in settlement negotiations with CMHA. Hence, Jurczenko had no duty to disclose to Gruenspan the existence of settlement discussions with CMHA. Despite his equitable lien for attorney fees against the Thompsons, that lien did not extend to Jurczenko. In short, Gruenspan was not in privity with Jurczenko to that extent that any duty to disclose the negotiations would arise.
{¶ 25} To the extent that Gruenspan's cause of action could be construed to assert any claim for relief on actions Jurczenko took after Gruenspan's termination, the court did not err. Having been terminated, Gruenspan was no longer counsel and thus could not claim that any fiduciary duty existed between he and Jurczenko on the basis of the co-counsel relationship. As to the relationship that existed before Gruenspan's termination, we find that the imposition of fiduciary duty between co-counsel would be against the public policy because it could compromise an attorney's duty to represent the best interests of the client.
{¶ 26} A "fiduciary" is "a person having a duty, created by his undertaking, to act primarily for the benefit of another in matters connected with his undertaking." Haluka v. Baker (1941),
{¶ 27} While there are no Ohio cases directly on point, we think it to be a self-evident principle of ethics that an attorney owes the foremost duty to the client, not to co-counsel. In Beck v. Wecht (2002),
{¶ 28} "It is fundamental to the attorney-client relationship that an attorney have an undivided loyalty to his clients. (See ABA Code of Professional Responsibility, Canon 5.) This loyalty should not be diluted by a duty owed to some other person, such as an earlier attorney. While, as a practical matter, both the client and former attorney stand to benefit from any recovery in the client's action, their interests are not identical. * * * It would be inconsistent with an attorney's duty to exercise independent professional judgment on behalf of his client to impose upon him an obligation to take into account the interests of predecessor attorneys * * *."
{¶ 29} With this case in mind, we find that Jurczenko owed no fiduciary duty to Gruenspan. His duty, like that of Gruenspan before him, was solely to the Thompsons. Absent the existence of a duty owed by Jurczenko to him, Gruenspan could not prevail on a claim alleging a breach of a fiduciary duty. The court did not err by granting summary judgment.
{¶ 31} There is "no authority recognizing a cause of action in favor of a co-counsel for negligence arising from representation of a mutual client; and we know of none." Evans v. Steinberg (1985),
{¶ 33} A claim of civil conspiracy requires a showing of: (1) a malicious combination, (2) two or more persons, (3) injury to persons or property, and (4) the existence of an unlawful act independent from the actual conspiracy. Geo-Pro Services, Inc. v. Solar Testing Laboratories,Inc. (2001),
Gruenspan's civil conspiracy claim for relief fails as a matter of law because he cannot show the fourth element — the existence of an unlawful act independent from the actual conspiracy. During deposition, Gruenspan testified that he believed the conspiracy was to "settle the case and cut me out of my fee." Assuming this to be true, there is nothing unlawful about it. Because Ohio is a code law state, only those acts for which there is a positive prohibition and specific penalty are considered to be criminal offenses. See R.C.
{¶ 35} To prevail on a claim for intentional infliction of emotional distress, a plaintiff must show the following: (1) that the defendant intended to cause the plaintiff serious emotional distress, (2) that the defendant's conduct was extreme and outrageous, and (3) that the defendant's conduct was the proximate cause of plaintiff's serious emotional distress. Phung v. Waste Mgt., Inc. (1991),
{¶ 36} We earlier noted that Jurczenko submitted uncontroverted evidence that he did not ask the Thompsons for permission to take over representation and, in fact, resisted the idea. Consequently, we can say as a matter of law that he did not engage in any behavior of the kind that would be considered outrageous enough to support a claim for intentional infliction of emotional distress.
{¶ 37} Moreover, since Gruenspan did not file any opposition to Jurczenko's motion for summary judgment, he did not offer any evidence to show that he suffered from severe emotional distress. Granted, Gruenspan might have been very angry indeed over his perceived treatment, but that kind of response is not the type of serious emotional injury that would support the claim. Knief v. Minnich (1995),
B. CHMA, Guest, Kelley, O'Bryan, and Summers
{¶ 38} In addition to suing his clients (the Thompsons and their several companies) and their subsequent attorney (Jurczenko), Gruenspan brought tort claims against the Thompsons' legal adversaries and the attorneys and law firms who represented those legal adversaries. The action underlying the claims raised against these particular defendants involved a Thompson company called TomRob. TomRob and CMHA entered into certain contracts, and TomRob eventually brought suit against CMHA for breach of those contracts. Defendant Guest was a CMHA staff attorney. Defendants O'Bryan and Summers are attorneys with the law firm of Kelley, McCann Livingstone (now known as Taft, Stettinius Hollister, LLP.). Kelley McCann represented CMHA as legal counsel in its defense against TomRob. Gruenspan alleged that he negotiated a settlement offer in the TomRob litigation but the Thompsons rejected that offer. Shortly after being fired as the Thompsons' attorney, Jurczenko hired on and reached the same settlement amount that Gruenspan had earlier negotiated. The claims against CMHA and the Kelley McCann defendants are that they conspired with Jurczenko to rob Gruenspan of the attorney fee that he earned by negotiating the first settlement. The specific claims were for conspiracy, tortious interference, fraud and intentional infliction of emotional distress.
{¶ 40} In Scholler v. Scholler (1984),
{¶ 41} Gruenspan made no allegation that he was in privity with the Kelley McCann defendants, and there are no facts which would show any privity. The affidavits submitted in support of the motions for summary judgment show that Kelley McCann defendants were engaged in the active representation of their clients, not with Gruenspan. Nor are there any facts to show that the Kelley McCann defendants acted with malice. Those defendants submitted affidavits which attested to their good faith throughout their representation of CMHA. Gruenspan did not respond to the motion for summary judgment, so he failed to present evidence to create a genuine issue of material fact on whether the Kelley McCann defendants acted with malice.
{¶ 42} The facts before the court show that none of the Kelley McCann defendants had prior knowledge of the Thompsons' decision to terminate Gruenspan and hire Jurczenko. They received notice of Gruenspan's termination from Jurczenko, who then advised them that the Thompsons wished to settle against CMHA. As noted by Summers in his affidavit, he had an ethical obligation to inform his client, CMHA, of the Thompsons' desire to settle. In Evans v. Jeff D. (1986),
{¶ 43} "Generally speaking, a lawyer is under an ethical obligation to exercise independent professional judgment on behalf of his client; he must not allow his own interests, financial or otherwise, to influence his professional advice. ABA, Model Code of Professional Responsibility E.C. 5-1, 5-2 (as amended 1980); ABA, Model Rules of Professional Conduct 1.7(b), 2.1 (as amended 1984). Accordingly, it is argued that an attorney is required to evaluate a settlement offer on the basis of his client's interest, without considering his own interest in obtaining a fee; upon recommending settlement, he must abide by the client's decision whether or not to accept the offer, see Model Code of Professional Responsibility E.C. 7-7 to E.C. 7-9; Model Rules of Professional Conduct 1.2(a)."
{¶ 44} As Summer states, he had no legal or ethical duty with respect to any fees that Gruenspan might have been owed by the Thompsons. His ethical duty went to his clients, not to Gruenspan.
{¶ 46} CMHA is a "body corporate and politic, see R.C.
{¶ 48} There were no facts to show that Guest acted outside the scope of his employment. The undisputed facts show that Guest acted within the scope of his employment and that he did not act with malice, bad faith, or in a wanton or reckless manner. Since Gruenspan submitted no evidence to contradict these facts, no genuine issue of material fact existed and Guest was entitled to judgment as a matter of law on grounds that he was immune from damages.
C. Seikel and Seikel, Koly Co.
{¶ 49} John Seikel and Seikel, Koly Co. ("Seikel") were accountants who represented the Thompsons in a construction project known as Dynes Village. Dynes Village was built with a mix of low-income units. Those units qualified for certain low-income housing tax credits which the Thompsons intended to sell to a group of investors. Any profit on the project would be realized from the sale of the tax credits. The Thompsons retained Seikel to prepare an audit report and the 1989 tax returns for the Dynes Village project. When Seikel erroneously stated the tax credits on the income tax return, those tax credits were lost, as was the ability to sell them for a profit. In 1991, the Thompsons brought suit in the court of common pleas against Seikel for accounting malpractice stemming from that project. In 1993 and 1994, the Thompsons brought the same causes of action, plus causes of action for RICO violations in the United States District Court for the Northern District of Ohio. Seikel filed a motion to dismiss the Thompsons' federal claims, and the federal court granted the motion in 1995. Seikel then filed a motion for summary judgment in the court of common pleas and argued that the federal court's dismissal was a dismissal on the merits and that the Thompsons' state court claims were barred by principles of res judicata. While Seikel's motion for summary judgment remained pending before the court, the Thompsons terminated Gruenspan's legal services. Hence, at the time the court granted Seikel's motion for summary judgment, the Thompsons were represented by Jurczenko, not Gruenspan. The Thompsons appealed from the summary judgment rendered in Seikel's behalf. Before this court heard the appeal on the merits, the parties reached a settlement during a prehearing conference. Seikel agreed to pay the Thompsons $77,500 in exchange for a complete release with no admission of liability on its part. Gruenspan argued that he had perfected an attorney's lien on the proceeds of the settlement between the Thompsons and Seikel by serving Seikel and its counsel with a "notice of lien" relating to his claim for attorney fees.
{¶ 50} Gruenspan had a valid claim against the Thompson defendants for legal fees that he earned prior to his termination because his contract with the Thompsons specified that he would be "compensated for work already performed." But his contractual right to fees earned prior to the termination of his legal services did not translate into an equitable lien against the party-defendants in the Dynes litigation. SeePennsylvania Co. v. Thatcher (1908),
{¶ 51} The analysis we used in Meros applies here. Gruenspan had every right to enforce his equitable lien against the Thompsons, but he could not hold Seikel liable for paying settlement proceeds to the Thompsons. Gruenspan's claims against Seikel failed as a matter of law.
{¶ 54} Under Civ.R. 52, when questions of fact are tried by the court without a jury, the court may render a general verdict unless one of the parties, "in writing," requests otherwise. If a party does request written findings of fact, the court has a mandatory duty to issue such findings. See In re Adoption of Gibson (1986),
{¶ 55} Gruenspan did not file a written request for findings of fact and conclusions of law. He therefore waived the right to challenge the lack of specific findings by the court. See Pawlus v. Bartrug
(1996),
{¶ 57} In a bench trial, the trial judge acts as the trier of fact and determines the credibility of witnesses and the weight to be given the evidence. State v. Walker (1985),
{¶ 58} Gruenspan submitted two separate documents which he claimed established both an hourly fee arrangement and a contingency fee arrangement. The first agreement was dated January 10, 1995, and was to cover "our claim for breach of contract, and/or other damages or loss, against CMHA, HUD, and others, as a result of the occurrence on or about 1984 to present." The agreement provided for a retainer fee of $5,000 and a contingency fee as applicable here, of forty percent of the amounts collected.
{¶ 59} The second agreement was contained in a July 28, 1995 letter drafted by Gruenspan and approved in writing by the Thompsons. The letter specifically mentions the case of Dynes Corporation v. Seikel, etal., that being the accountant malpractice action. It also purports to cover "various legal matters" for the Thompsons and their affiliated companies. This agreement provides for Gruenspan's representation at an hourly fee of $155.
{¶ 61} "2. When an attorney representing a client pursuant to a contingent-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.
{¶ 62} "3. A trial court called upon to determine the reasonable value of a discharged contingent-fee attorney's services in quantum meruit should consider the totality of the circumstances involved in the situation. The number of hours worked by the attorney before the discharge is only one factor to be considered. Additional relevant considerations include the recovery sought, the skill demanded, the results obtained, and the attorney-client agreement itself."
{¶ 63} Any request for a quantum meruit recovery necessarily invokes the equitable jurisdiction of the court. Sonkin MelenaCo., L.P.A. v. Zaransky (1992),
{¶ 64} The court examined at length the content of the contingency fee agreement between Gruenspan and the Thompsons, as well as the amount of hours that Gruenspan worked on the various matters falling under the agreement. Because Gruenspan claimed the fees under the equitable remedy of quantum meruit, the court further considered all other factors that might balance equity in one way or another.
{¶ 65} The court had serious reservations about the scope of the contingency agreement. It believed that if the agreement were read literally, it "turns the whole case over to Mr. Gruenspan and relieves Mr. Thompson of any opportunity to have any voice in determining it whatsoever." These reservations arose from a provision which purported to give Gruenspan a lien "for all past and future fees owed," and further prohibited the clients from obtaining any settlement "without complete prior approval of the lawyer." That provision was clearly voidable. InHoleton v. Crouse Cartage Co.,
{¶ 66} "* * * this court has never tolerated an `illegal restriction upon the right to compromise.' Davy v. Fid. Cas. Ins.Co. (1908),
{¶ 67} Settlement of the CMHA action was the sticking point between the parties. Gruenspan testified that he negotiated a settlement of $259,636.69, but the Thompsons refused to accept that figure. Just days after they terminated Gruenspan, the Thompsons retained Jurczenko who settled with CMHA for that same amount. For their part, the Thompsons testified that they kept asking Gruenspan to terminate the litigation. The evidence showed that they were in dire financial straits, having folded all of their companies and having their house placed in foreclosure. Robert Thompson was in poor health. He testified that when informed of CMHA's settlement offer, he told Gruenspan that "I wanted to collect the money and forget this matter and put it behind us. I wanted a settlement, as it had been going on, and on, and on." Other evidence showed that a few months before Gruenspan's termination, Robert Thompson sent Jurczenko a letter in which he stated that "Charles Gruenspan is filing more motions and I think he is only antagonizing the judge. It is very important that you call me right away because we have to get this case settled." Thompson's claim that Gruenspan had been filing "more motions" was substantiated at least in part by testimony showing that Gruenspan filed a notice of appeal from a July 26, 1996 judgment without authorization from the Thompsons. Robert Thompson testified that Gruenspan refused to dismiss the appeal even though ordered to do so. It was only after the Thompsons terminated Gruenspan and brought in Jurczenko that the appeal was dismissed.
{¶ 68} This is not to say that the litigation which Gruenspan prosecuted on behalf of the Thompsons in the CMHA case was frivolous. This evidence does, however, lend some credence to Robert Thompson's testimony that Gruenspan was refusing to settle with CMHA in order to increase his contingency fee. And there can be no doubt that Gruenspan's fee had become the primary point of contention. Gruenspan's October 24, 1996 letter acknowledging his termination made this veiled threat:
{¶ 69} "Why take your greatest asset and strongest defender and ally and turn him into an adversary? If the only purpose of terminating me is to try to save money on my fees, this could be counterproductive. If you truly want my services terminated, I will do everything in my power to protect my family's interest in these cases. These cases are tough enough without having to deal with me too."
{¶ 70} In the end, the court relied on competent, credible evidence to award a contingency fee, although not in the amount specified under the contingency fee agreement. By the time of his termination, Gruenspan had ceased to follow his client's wishes to settle the case and held out for a larger settlement. The fee agreement itself was suspect, as it gave Gruenspan a right of refusal over any settlement of the litigation. Finally, the results obtained by Jurczenko were identical to the settlement that Gruenspan negotiated but refused to accept. The court could reasonably conclude that the amount of fees specified in the contingency fee agreement should be modified.
{¶ 72} The court erred as a matter of law when it voided the letter agreement on grounds that it was "ambiguous and uncertain." When a party to a contract claims that the contract is ambiguous, the court must give words and phrases to their plain, ordinary, or common meaning.Gomolka v. State Auto. Mut. Ins. Co. (1982),
{¶ 73} The contract referred to the Dynes Corporation litigation and "various legal matters." It is true that it did not mention the other corporate matters by name, but there can be no doubt that the Thompsons agreed to have Gruenspan represent their affiliated companies. To be sure, Gruenspan performed legal work for the Thompsons as individuals. But when Gruenspan sent billing invoices for the Thompsons' corporate work, the Thompsons made no effort to correct the billing statements to show that the companies and not the Thompsons were the true obligors for Gruenspan's legal fees. Moreover, they did not sign the letter agreement in their representative capacities for their companies. This evidence, which was uncontroverted, convinces us that, as a matter of law, the Thompsons were individually liable for Gruenspan's legal fees.
And if the Thompsons were individually liable for Gruenspan's legal fees, it follows that the court also erred when it absolved Dolores Thompson of any liability under the letter agreement. The court found that her involvement in the corporate matters was so "minuscule as to be the basis for a failure of justice if she were to be required to be responsible for these payments * * *." It may be that Dolores Thompson had nominal operational involvement with the Thompson corporations, but she was the president and sole shareholder of at least one of the companies. Moreover, she signed the letter agreement as an individual along with her husband, Robert. And at least some of the legal fees were produced for projects that were unrelated to the Thompsons' corporate affiliates. At the very least, the court had the obligation to determine which legal fees arose as a result of non-corporate legal work and assess Dolores' share accordingly.
{¶ 75} We find the court both erred and abused its discretion by awarding Gruenspan only $125,000 in fees. We agree with the court that these were difficult questions for it to resolve. Nevertheless, the court should have made it clear just what work made up the total amount of the award, for it is impossible for us to review the award without that finding. For example, even though Gruenspan had been terminated from the CMHA case, that termination happened just weeks before the case was settled for an amount that Gruenspan claimed to have negotiated. The court relied on competent, credible evidence to show that Gruenspan refused to settle in hopes of negotiating a higher settlement. Yet the fact remains that he had at least negotiated the final settlement number. His work on the case was more than just minimal, and his quantum meruit award should have reflected that fact. In other words, while he was not entitled to forty percent of the settlement, he was entitled to an award that reflected the amount of work he performed. If the court believed that Gruenspan's actions over the years prolonged the case, its award should have said as much so that we could rationally review the court's award.
{¶ 76} As for the hourly fee work, there is no question that Gruenspan documented his billing over the years. The court may have had doubts as to the veracity of some of these bills, and the evidence would have supported some of those doubts. But many of the hourly fees went unchallenged. Given the meticulous documentation of the work, the court had no reason not to make a more specific damage award for the work on account. The court cited to only a few examples in which it believed that Gruenspan padded his fee, yet those few examples could not taint the entire claim, at least not without more specific findings by the court. And all of the hourly fee work that had not been paid was subject to interest at ten percent. We see nothing in the damage award that would suggest that the court calculated interest.
Judgment affirmed in part; reversed in part and remanded.
JAMES J. SWEENEY, J., and SEAN C. GALLAGHER, J., CONCUR.MICHAEL J. CORRIGAN PRESIDING JUDGE
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