McLane, Graf v. Rechberger

District Court, D. New Hampshire·Decided April 29, 1999·No. CV-97-398-JD·Published

Opinion

McLane, Graf v. Rechberger CV-97-398-JD 04/29/99 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

McLane, Graf, Raulerson & Middleton, P.A.

v. Civil No. 97-398-JD

Alfred A. Rechberger and ARC Partners, Ltd.

O R D E R

This litigation arises from a fee dispute for legal work done by several attorneys for Alfred Rechberger and his company ARC Partners, Ltd. The plaintiff law firm, McLane, Graf, Raulerson & Middleton, P.A. ("McLane"), moves for partial summary judgment (document no. 65) as to part of the fees and expenses it claims from defendants, Alfred A. Rechberger and ARC Partners, Ltd. (referred to collectively as "Rechberger"). Third-party defendant Jon L. Meyer has filed motions both for judgment on the pleadings (document no. 57) and for summary judgment (document no. 64) in his favor on the only remaining claim against him. The pending motions, which are opposed by Rechberger, are resolved as follows.

Background1

Alfred Rechberger first contacted attorney Edward Hahn in March of 1995 concerning a suit in state court filed by Rechberger's daughter, Marion Jacobi, charging him with sexual abuse. See Jacobi v. Rechberger, et al.. No. 94-C-482 (Merrimack County Superior Court, filed 1994). Hahn allegedly advised Rechberger that his daughter's suit was a "$50,000 case" and that litigation costs for his defense would be "around $200,000." In June of 1995, Hahn joined the law firm of Backus, Meyer, and Solomon, and Jon Meyer of that firm worked on the Jacobi case with Hahn. Ms. Jacobi's attorney made a settlement demand in December of 1995 that Hahn rejected. Soon after, Rechberger's motion to dismiss on statute of limitations grounds was denied. The Backus firm billed Rechberger during this time, and he paid the bills.

Rechberger also used Hahn to handle legal matters pertaining to his business, ARC Partners Ltd. In January of 1996, Hahn filed suit on behalf of Rechberger and ARC to recover losses arising from a failed stock purchase agreement. See Rechberger, et al. v. BioSan Laboratory, et al.. No. 96-44-JD (D.N.H. filed

1The background is summarized from the parties' pleadings, motions, and memoranda and is provided only as general background information.

1996).

In March of 1996, Hahn joined the McLane firm, bringing his client Rechberger with him. Attorney Wilbur Glahn of the McLane firm filed appearances in both the Jacobi and BioSan cases, and Hahn continued to work on both cases. In addition, an associate at the McLane firm, Mark Whitney, worked on the cases. Rechberger did not have a written fee agreement with the McLane firm. He was billed regularly for the work done by the firm and expenses, and he paid the bills in a timely manner without dispute.

Rechberger alleges that in January of 1997, Glahn informed him that his liability in the Jacobi case could be between four and ten million dollars. Rechberger immediately instructed Glahn to settle the case. The case was settled in February of 1997 for 1.35 million dollars. Rechberger then stopped paying his bills. In response to his reguest, the McLane firm sent Rechberger detailed billing statements for the firm's work and expenses on the Jacobi case.

When Rechberger failed to pay the outstanding fees and expenses, the McLane firm filed suit against Rechberger and ARC Partners in state court by a writ dated July 11, 1997. The writ alleged claims in three counts of assumpsit, guantum meruit, and bad faith based on the defendants' failure to pay for legal

services received from the firm. Rechberger removed the action to this court and filed counterclaims against the McLane firm and third-party claims against Edward Hahn and Jon Meyer. Meyer filed a counterclaim against Rechberger for the amount of unpaid legal fees for his work. Summary judgment was granted in favor of the McLane firm, Jon Meyer, and Edward Hahn on Rechberger's claims of legal malpractice and infliction of emotional distress leaving only the third count which alleges breach of an implied covenant to charge reasonable fees against the McLane firm as a counterclaim, and against Jon Meyer and Edward Hahn, as third- party defendants.

Discussion

Third-party defendant Jon Meyer filed a motion for judgment on the pleadings, and then, in response to Rechberger's expert witness's report, filed a motion for summary judgment. Meyer's motions for judgment on the pleadings and summary judgment both address Rechberger's only remaining claim against him, breach of an implied covenant to charge reasonable fees. In his motion for judgment on the pleadings, Meyer contends that Rechberger's allegations are insufficient as a matter of law to support a claim that his fees were unreasonable. For purposes of summary judgment, Meyer relies on Rechberger's expert witness's opinion

that Meyer's bills were reasonable to show undisputed facts in his favor. As Meyer's motion for summary judgment is dispositive of the claim, it is not necessary to also consider Meyer's motion for judgment on the pleadings.

The McLane firm filed a motion for partial summary judgment on its claim and Rechberger's counterclaim to the extent the claims are based on legal fees and expenses that McLane contends are not disputed. Rechberger opposes the motions and also seeks leave to amend his complaint.

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The record is taken in the light most favorable to the nonmoving party. Perkins v. Brigham & Women's Hosp., 78 F.3d 747, 748 (1st Cir. 1996). "An issue is only 'genuine' if there is sufficient evidence to permit a reasonable jury to resolve the point in the nonmoving party's favor, while a fact is only 'material' if it has the potential to affect the outcome of the suit under the applicable law." Bourque v. F.D.I.C., 42 F.3d 704, 707-08 (1st Cir. 1994) (guotations omitted). "[T]he mere existence of some alleged factual dispute between the parties

will not defeat an otherwise properly supported motion for summary judgment . . . Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) .

A. Meyer's Motion for Summary Judgment Rechberger's expert witness, attorney Finis Williams, reviewed the billing records of Backus, Meyer, and Solomon, and gave his opinion in his report that the Backus firm's billing was excessive by one guarter to one-third of the amount billed, but he also concluded that "Attorney Meyer's bills are considered to be reasonable." Rechberger offers no evidence to dispute Williams's conclusion that Meyer's bills were reasonable, and instead seems to accept that fact as undisputed. Instead, Rechberger argues in opposition to summary judgment that Meyer is vicariously liable for the allegedly excessive and unreasonable billing by Edward Hahn while he worked for the Backus firm.

The Backus firm is not a party to the present litigation.

Rechberger's third-party complaint does not allege a claim of vicarious liability against Meyer. Nevertheless, Rechberger argues that Meyer should have been on notice of a vicarious liability claim against him because he was the primary trial attorney in the Jacobi case and Hahn billed excessively while under Meyer's supervision. Even if Rechberger's theory were

included in his complaint, which it is not, there are no facts pled to support a vicarious liability theory, and Rechberger has presented no legal basis for imposing vicarious liability on Meyer for Hahn's allegedly excessive billing.

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