Hinkle, Cox, Eaton, Coffield & Hensley v. Cadle Co. of Ohio, Inc.

848 P.2d 1079, 115 N.M. 152
CourtNew Mexico Supreme Court
DecidedFebruary 23, 1993
Docket20332
StatusPublished
Cited by28 cases

This text of 848 P.2d 1079 (Hinkle, Cox, Eaton, Coffield & Hensley v. Cadle Co. of Ohio, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hinkle, Cox, Eaton, Coffield & Hensley v. Cadle Co. of Ohio, Inc., 848 P.2d 1079, 115 N.M. 152 (N.M. 1993).

Opinion

OPINION

MONTGOMERY, Justice.

This is an appeal and a cross-appeal from a judgment in favor of the plaintiff, a law firm, awarding it the amount sought in its complaint as fees allegedly earned in representing the defendant over a period of time (plus prejudgment interest, costs, and attorney’s fees), and dismissing the defendant’s counterclaims. Defendant, Cadle Company of Ohio, Inc. (“Cadle”), 1 challenges the trial court’s orders granting summary judgment to the plaintiff, Hinkle, Cox, Eaton, Coffield & Hensley (“Hinkle”), on Hinkle’s complaint and on Cadle’s counterclaims to recover amounts previously paid during the course of Hinkle’s previous representation. By its cross-appeal, Hinkle attacks the trial court’s refusal to award, as part of Hinkle’s claim for attorney’s fees as the prevailing party in the present litigation, amounts representing the value of services performed by a Hinkle associate. The case presents issues on allocation of the burden of establishing reasonableness in connection with a claim for attorney’s fees allegedly earned in the past by a lawyer or a law firm, the requirements for the defense of “account stated” in resisting a claim by a former client for refund of fees previously paid, recovery of attorney’s fees to a prevailing party for work related to the defense of counterclaims, and the requirements for asserting a claim for “in-house” attorney’s fees in connection with a claim for attorney’s fees recoverable in an action. We affirm in part, reverse in part, and remand for further proceedings.

I. FACTS

Cadle is an Ohio corporation engaged in the business of purchasing commercial paper at a discount from the Federal Deposit Insurance Corporation and the Resolution Trust Corporation. Cadle often employs outside legal counsel to assist it in collecting such commercial paper and in liquidating any collateral securing it. In 1988 Cadle employed Hinkle to represent it in the collection of amounts due under certain promissory notes.

Cadle and Hinkle did not enter into a written fee agreement to govern Hinkle’s fees for its services. Rather, according to Cadle’s President, Daniel Cadle, the parties orally agreed that Hinkle would bill Cadle on an hourly basis, based on Hinkle’s customary and reasonable hourly rate. Daniel Cadle testified by deposition that Stuart Shanor, a managing and senior partner of Hinkle, told him that the hourly rate would vary, depending on who performed the legal work.

Hinkle began the collection work and sent Cadle monthly invoices for the work performed. From approximately July 1988 to May 1989, Cadle paid Hinkle a total amount of between $26,572.13 and $27,-364.54' (the exact amount was disputed). Thereafter, Hinkle continued to send Cadle monthly invoices, but Cadle refused to pay them.

In May 1990 Hinkle sued Cadle, seeking to recover $14,968.64 for unpaid legal services that it allegedly had rendered in collecting or attempting to collect on the promissory notes. Hinkle sought recovery based on theories of open account, account stated, and breach of contract. Cadle answered the complaint, denying that it owed any amounts to Hinkle. Cadle also asserted two counterclaims, seeking recovery of amounts it had already paid for previously rendered legal services. Its counterclaims alleged breach of contract and unfair trade practices.

Subsequently, during discovery, Cadle indicated that it was going to rely on the testimony of an expert witness, Louis Puccini, to establish that Hinkle’s fees were unreasonable. Hinkle therefore sought to depose Puccini before' trial. Hinkle attempted to schedule Puccini’s deposition, but Cadle repeatedly delayed the deposition because it had not provided Puccini with the necessary documentation to enable him to express an expert opinion. Because of Cadle’s delays, the trial court entered an order on August 22, 1991, compelling Puccini’s deposition by August 30. Hinkle then deposed Puccini by telephone on August 30; however, Puccini could not express an opinion as to the reasonableness of Hinkle’s fees because Puccini still had not received sufficient documentation on which to base an opinion.

Hinkle then moved to dismiss Cadle’s counterclaims as a discovery sanction against Cadle. Hinkle alleged that Cadle’s failure to provide Puccini with the necessary documentation was willful and deliberate. The trial court denied Hinkle’s motion, but did impose an alternative sanction: It struck Puccini as a witness and prohibited Cadle from offering any other expert testimony in the case.

Hinkle next filed two motions for summary judgment, seeking judgment on its complaint and on Cadle’s counterclaims. In support of the motion on its complaint, Hinkle submitted monthly invoices it had sent to Cadle and which remained unpaid. The invoices itemized the tasks performed by Hinkle, the attorney who performed each task, the amount of time spent on each task, and the amount billed for each task. The invoices also listed Hinkle’s expenses incurred in representing Cadle. Along with the invoices, Hinkle submitted the affidavit of Stuart Shanor, who stated that the invoices represented actual work performed and expenses incurred and that the legal work and expenses were reasonable in amount and necessarily incurred.

Hinkle’s other motion for summary judgment, addressed to Cadle’s counterclaims, was based on the theory of an account stated. Hinkle asserted that Cadle could not recover amounts it had already paid Hinkle because Cadle had assented to those amounts by paying them without objection.

Cadle responded to Hinkle’s motions by submitting affidavits signed by Timothy Taber, Vice President and General Counsel of Cadle. In his affidavit in response to Hinkle’s motion on the. complaint, Taber stated that since May 1989 he had been primarily responsible for hiring outside counsel for Cadle and that he had reviewed invoices from approximately 100 outside counsel, including four New Mexico firms. He then stated that he was familiar with Hinkle’s representation, that he had reviewed Hinkle’s invoices, and that Hinkle’s legal fees were unreasonable. Taber’s affidavit incorporated by reference two of Cadle’s answers to Hinkle’s discovery interrogatories. In the answers, Cadle listed the items from Hinkle’s invoices that Cadle found objectionable and generally objected to “paying for [Hinkle’s] legal education” and to being charged for intraoffice conferences and memos, unnecessary research projects, and excessive time allegedly spent on certain procedures.

In his affidavit in response to Hinkle’s motion on the counterclaims, Taber again said that Hinkle’s legal fees were unreasonable. This affidavit incorporated by reference a portion of Daniel Cadle’s deposition, in which he referred to his previous discussions with attorneys at Hinkle, in which he had objected to the amount of Hinkle’s bills.

The trial court considered Hinkle’s motions at a hearing in October 1991. Initially, the court struck the affidavits of Timothy Taber insofar as they “purported] to assert any expert opinion.” The court reasoned that Cadle could not rely on Taber’s affidavits because of the court’s earlier discovery sanction prohibiting Cadle from relying on any expert opinion and that Taber was in any event incompetent to offer any expert opinions in the case.

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Cite This Page — Counsel Stack

Bluebook (online)
848 P.2d 1079, 115 N.M. 152, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hinkle-cox-eaton-coffield-hensley-v-cadle-co-of-ohio-inc-nm-1993.