Devil's Advocate, LLC v. Zurich American Insurance Company

666 F. App'x 256
CourtCourt of Appeals for the Fourth Circuit
DecidedNovember 22, 2016
Docket15-1048
StatusUnpublished
Cited by19 cases

This text of 666 F. App'x 256 (Devil's Advocate, LLC v. Zurich American Insurance Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Devil's Advocate, LLC v. Zurich American Insurance Company, 666 F. App'x 256 (4th Cir. 2016).

Opinion

Affirmed by unpublished per curiam opinion.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

Devil’s Advocate, LLC, and John W. Toothman (“Appellants”) sued Zurich American Insurance Company (“Zurich”) for breach of contract, unjust enrichment, conversion, unauthorized use of name, trademark infringement, and copyright infringement. After the district court dismissed all of their claims, Appellants timely appealed. 1 Finding no error, we affirm the judgment of the district court.

I.

Appellant John W. Toothman is a lawyer and the founder of Devil’s Advocate, a consulting firm that provides expert testimony regarding the reasonableness of legal fees. In 2008, Appellee Zurich became *259 embroiled in a coverage dispute in state court in Harris County, Texas (the “Texas litigation”). 2 On October 12, 2010, Blair Dancy, a lawyer representing Zurich in the Texas litigation, contacted Toothman about serving as an expert witness regarding the reasonableness of the attorneys’ fees billed by defense counsel in the case. Toothman responded by email, indicating his availability and attaching a copy of a blank form billing agreement (“Billing Agreement”), his resume, and additional information about Devil’s Advocate’s services. The Billing Agreement included no fee terms, leaving several blank spaces where the parties could later insert such terms should they reach an agreement. Neither Dancy nor anyone else representing Zurich signed the Billing Agreement.

Less than a month later, on November 2, 2010, Dancy asked Appellants to provide a proposal for services to include review of billing records and other pertinent information relevant to the disputed defense fees, as well as providing potential trial testimony. Toothman responded with an email proposal (“Proposal”), which stated: “Assuming we review at least $4 million in bills (fees and expenses) and the bill formats are consistent with the sample bill you provided, we are quoting a fee for your project of 2.1% of the gross amount of the fees we would review and report upon.” J.A. 314. Further, it made plain that “[t]his proposal is preliminary, prior to our engagement and full review of available information.” J.A. 315. Toothman did not include a completed Billing Agreement with his email.

Toothman contacted Dancy two days later to determine if he had received the Proposal. After confirming that he had, Dancy informed Toothman that “[t]he client’s mulling it over.” J.A. 322. Tooth-man followed up four days later, on November 8, 2010, with an email inquiring whether there had been “[a]ny word yet from Zurich” regarding the Proposal. J.A. 294-95; J.A. 322.

No later than November 19,2010, Dancy informed Toothman by telephone that Zurich would not accept the Proposal because the parties still needed to negotiate the price of the proposed services. Dancy also notified Toothman that, because the deadline for designating experts had passed, Zurich needed leave of court to designate him as an expert witness. Dancy explicitly stated that such designation was a condition precedent to Zurich’s acceptance of Toothman’s Proposal. Ultimately, although Toothman continued to negotiate his fee with Dancy, the parties never reached an agreement.

In an email update dated November 16, 2010, Dancy advised Toothman that the court in Texas had postponed the trial and pre-trial conference in the litigation, a development that impeded Zurich’s ability to amend its expert designation to include Toothman. Toothman responded to this news on November 19, 2010: “Just checking in. I’m assuming this may be shut down for some time, but the more time we can spend on the review, the better.” J.A. 408-09. Also on the 19th, Dancy served opposing counsel in the Texas litigation with Zurich’s proposed amended expert designation naming Toothman. Thereafter, in an email dated December 2, 2010, Toothman acknowledged that Zurich had not yet hired him. J.A. 296; J.A. 410 (“I’ll be careful, if I ever get hired.”).

The next day, Dancy filed an amended motion for a Rule 166 3 pretrial conference *260 in the Texas litigation, seeking leave to amend Zurich’s expert designation and attaching-the amended designation naming Toothman.

Toothman was aware that Zurich needed court approval of his late designation before it could accept Appellants’ Proposal. In a December 8, 2010, email to Dancy, Toothman confirmed that, although Zurich had provided his name to the court, he knew he had not yet been retained to perform any work under the Proposal.

On December 13, 2010, Toothman again emailed Dancy, advising him that “[i]n case this thing goes forward,” the total amount of legal fees he had received for review was just under $3.5 million, a difference of $500,000 from the $4 million originally estimated in the Proposal. J.A. 297; J.A. 422. The next day, he acknowledged to Dancy that Zurich had neither accepted the Proposal nor retained him: “[I]s there any way to make sure Zurich’s ready to go right after the hearing, e.g., by approving our agreement and cutting the initial check?” J.A. 297; J.A. 428.

Finally, on December 29, 2010, Tooth-man sent Dancy the following email: “Attached is the paperwork to get this project going once you decide what to do.... We would start as soon as we received the signed agreement and initial payment.” J.A. 297; J.A. 430. Attached was a Billing Agreement listing a flat fee of $69,233.82, based on 2.0% of the gross amount of fees and expenses subject to review, estimated by Toothman to be at least $3.4 million. This was the first Billing Agreement submitted by Toothman that included a specific fee estimate.'Also attached was an invoice totaling $34,616.91, purportedly representing one-half of the estimate. Dancy never signed this Billing Agreement and denies ever agreeing to its terms.

On January 13, 2011, Toothman emailed Dancy, claiming “[payment of the full fee was triggered when Zurich designated me as its expert on December 3, 2010.” J.A. 433. He also attached an account statement, with two invoices totaling $69,233.82. Dancy called Toothman on January 17, 2011, to discuss the email and invoices, but Toothman terminated the call. Zurich then concluded that it could not work with Toothman and withdrew its request for leave to designate him as an expert witness in the Texas litigation. It confirmed this to Toothman. in a letter dated January 17, 2011. J.A. 438-40.

Toothman and Devil’s Advocate responded by suing Zurich in the Circuit Court for Fairfax County, Virginia in February 2011. Several days prior to trial, however, they voluntarily dismissed their claims pursuant to Virginia’s nonsuit statute. Later, on October 7, 2013, they sued Zurich in the Eastern District of Virginia, alleging claims of breach of contract, unjust enrichment, conversion, unauthorized use of name, trademark infringement, and copyright infringement.

The district court granted in part Zurich’s motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
666 F. App'x 256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/devils-advocate-llc-v-zurich-american-insurance-company-ca4-2016.