Joseph F. Hogan v. Wilbur C. Wright, D/B/A Wright Construction Company

356 F.2d 595, 1966 U.S. App. LEXIS 7234
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 8, 1966
Docket16347
StatusPublished
Cited by14 cases

This text of 356 F.2d 595 (Joseph F. Hogan v. Wilbur C. Wright, D/B/A Wright Construction Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Joseph F. Hogan v. Wilbur C. Wright, D/B/A Wright Construction Company, 356 F.2d 595, 1966 U.S. App. LEXIS 7234 (6th Cir. 1966).

Opinions

CELEBREZZE, Circuit Judge.

This action for the recovery of attorney fees is now on appeal for the second time. The defendant-appellant in both appeals, Wilbur C. Wright, appeals from the finding of the District Court that the reasonable value of the legal services performed by Joseph F. Hogan, plaintiff-appellee, was $27,468.36. This finding was made after the case had been remanded to the District Court with instructions to interpret the contract or relationship between the parties as a matter of law, and to make findings of fact relative to the services performed by the plaintiff and the amount of the legal fees due plaintiff as a result of those services.

The facts of this case are fully set forth in the opinion of this Court, reported at 322 F.2d 83. These facts will be briefly summarized.

In July, 1950, Wilbur Wright, d/b/a Wright Construction Company, hereinafter referred to as Wright, contracted with the State of Ohio for the construction of a bridge. Wright contracted to purchase the necessary steel from Allied Structural Steel Corporation. Because of the Korean conflict, there was a two and a half year delay in the delivery of the steel. As a result the final cost of the steel was $180,000. higher than the original estimate.

Wright retained Joseph F. Hogan, hereinafter referred to as Hogan, to represent him. Hogan advised Wright not to pay Allied Steel. Allied Steel sued Wright, and after four days of trial the case was settled by an allowance of a credit of $75,000. to Wright on the amount owing Allied. After this settlement, Hogan sent the following letter, dated December 18, 1956, to Wright: “Dear Mr. Wright:

“In Re: Allied v. Wright
“Over the telephone a few days ago, you asked that I send you a statement for services in the above-captioned case.
“In arriving at the amount of the statement, I have treated the $75,-000.00 credit allowed you by Allied in the settlement, as a recovery by you of that amount, and my thought is that 20%, $15,000 is a reasonable fee.
“As I have heretofore informed you, I paid the Kelly firm the sum of $622.20 (copy of the statement enclosed), and I am to take care of Mr. Reed’s fees.
“As you know, a great deal of time was expended in intensively preparing the case for trial, including the three trips to Lansing, the trips to Chicago and Massillon, the three days at Akron when we thought we were going to trial, and the four days of trial. An itemized statement of the time will be sent to you if you so desire.
“At different times, I have sent to you statements of expenses as follows: $191.69, $183.76 and $256.54. Those statements total $631.89. You have a credit against those charges in the amount of $1,000.00 paid July 6, 1955 and $183.76 paid February 7, 1956, or total credits of $1,183.76. That would leave a credit now due you of $551.87 on the $15,000.00 charge.
“As I told you on leaving Akron, I will prepare, file and present your claim with the Sundry Claims Board without charge to you. (My usual fee for a claim of this size is $2,-500.00 for preparation and presentment against 25% of the recovery.) Out of any recovery in your claim, you are to pay me a percentage figure acceptable to you. That claim is now ready for filing, except that you [597]*597have failed to send me the material requested in my letter of December 12. I am enclosing a copy of the claim as it will be filed upon receipt of the material requested from you.
“With best wishes for a happy Holiday Season, I am
“Sincerely yours,
“Joseph F. Hogan.”

Pursuant to this letter, Wright paid Hogan $15,000. and sent Hogan the requested material necessary to present Wright’s claim to the Sundry Claims Board of the State of Ohio. The sum of $212,314.81, less the credit of $75,000. previously recovered from Allied Structural Steel, or a total recovery of $137,-341.81, was paid to Wright in November, 1959. Before the claim was paid, Wright wrote Hogan suggesting a fee of $2,000. This lawsuit followed the rejection by Hogan of the fee suggested by Wright.

Upon remand by this Court, the District Court, in supplemental findings of fact, found that Wright and Hogan entered into a contract; that the terms of the contract were that Hogan was to prepare, file and present Wright’s claim to the Sundry Claims Board without charge to Wright; that Hogan’s normal charge for these services was an advance payment of $2,500.; that out of any recovery from the claim, Wright was to pay Hogan a percentage figure acceptable to Wright; that Hogan did prepare, file and present the claim and did recover from the State of Ohio the sum of $137,341.81; that both parties knew and understood that Hogan’s normal charge was 25% of any recovery, which in this case would be $34,335.45; that Wright notified Hogan that he was fixing his fee in the amount of $2,000., which, when computed as a percentage of recovery would be 1.4%.

In its conclusions of law the Court found that Hogan’s letter of December 18, 1956, constituted an offer, and Wright’s subsequent conduct constituted an acceptance. Thus a valid contract was created. The court further found as a matter of law that the contract required Wright to pay Hogan out of any recovery a percentage acceptable to Wright; that Hogan performed the services required under the contract; that Wright fixed the sum of $2,000. as payment; that this amount was so insufficient as to amount to bad faith; that Wright was bound in good faith to determine and pay to Hogan the reasonable value of his services; and that Hogan was entitled to recover from Wright $27,468.36.

As a general rule, a wholly executory agreement which reserves to the will and discretion of one party the unlimited right to determine the extent of compensation he will make is too indefinite to be enforceable. I Corbin on Contracts, Section 98; 17 Am.Jur.2d, Contracts, Section 83. Here, however, is a contract where the promisor has fully performed, and the promisee has the unlimited right to determine the amount of compensation he will pay the promisor for the services rendered. The cases are in conflict as to the manner of measuring the adequacy of the compensation rendered by the one party. The facts of each case generally suggest the appropriate rule. Recovery has been allowed for the reasonable value of such services where the facts disclose that this wás the intention of the parties or where the express reservation to one party to determine the fee is coupled with the provision that the payment to be made shall be “reasonable”, “fair”, ’’right”, or “good”. Foster v. Young, 172 Cal. 317, 156 P. 476; Corthell v. Summit Thread Co., 132 Me. 94, 167 A. 79, 92 A.L.R. 1391; Pillois v. Billingsley, 179 F.2d 205 (C.A.2, 1949); Millar v. Cuddy, 43 Mich. 273, 5 N.W. 316, 92 A.L.R. 1391. Other cases have held that where the promisor has determined the amount to be paid, no more can be recovered. This is especially true where the promisor has acted in good faith, although the compensation is considerably less than the reasonable value of the services. Lee’s Appeal, 53 Conn. 363, 2 A. 758 (1886); Butler v. Winona Mills Co., 28 Minn. 205, 9 N.W. 697 (1881); Tennant v. Fawcett, 94 Tex. 111, 58 S.W.

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Bluebook (online)
356 F.2d 595, 1966 U.S. App. LEXIS 7234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/joseph-f-hogan-v-wilbur-c-wright-dba-wright-construction-company-ca6-1966.