Wolf, Rohr, Gemberling & Allen, P. A. v. Margots Kapacs

• Court: Court of Appeals of Minnesota
• Decided: June 20, 2016
• Docket: A15-1849
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA IN COURT OF APPEALS A15-1849

Wolf, Rohr, Gemberling & Allen, P. A., Respondent,

vs.

Margots Kapacs, Appellant.

Filed June 20, 2016 Affirmed Hooten, Judge

Hennepin County District Court File No. 27-CV-15-7833

Sarah B. Quigley, Quigley Law Firm, PLLC, Minneapolis, Minnesota (for respondent)

Margots Kapacs, Minneapolis, Minnesota (pro se appellant)

Considered and decided by Hooten, Presiding Judge; Worke, Judge; and Smith,

Tracy, Judge.

UNPUBLISHED OPINION

HOOTEN, Judge

In this attorney fee dispute, appellant challenges the district court’s order granting

summary judgment in favor of respondent law firm, arguing primarily that the law firm

was required to obtain his consent before providing further services once his retainer was

exhausted. We affirm. FACTS

In July 2013, appellant Margots Kapacs retained respondent Wolf, Rohr,

Gemberling & Allen, P.A. (law firm) to represent him in marital dissolution proceedings.

Kapacs and the attorney who was to represent him signed a retainer agreement (agreement)

and, in accordance with the agreement, Kapacs paid the law firm an initial retainer of

$3,500. The agreement provided that in the event that the retainer was depleted, Kapacs

“may be notified of the need for an additional advance fee retainer.” Kapacs paid an

additional $1,200 to the law firm to be used as a retainer for the services of a financial

consultant in connection with the dissolution. As of January 2014, the law firm had

exhausted the initial retainer that Kapacs had paid. In February 2014, the law firm

submitted a bill to Kapacs that reflected services it had provided after the retainer had been

exhausted. The law firm withdrew from representing Kapacs in March 2014 as a result of

Kapacs’ failure to pay the bill. After a number of communications regarding the correction

of an error in the bill, Kapacs sent two emails to the law firm in July 2014, in which he

stated, “[The bill] is on my list to pay” and “I am accepting all [of] the bill,” with the

exception of one item that is not at issue in this appeal.

The law firm initiated an action in conciliation court to recover the amount of the

outstanding bill and obtained a judgment in the amount of $3,546.61. Kapacs appealed the

conciliation court’s judgment to district court, and the law firm moved for summary

judgment. In response to the law firm’s motion, Kapacs argued that he was not liable for

the attorney fees, alleging primarily that, after exhausting his retainer, the law firm was

required to receive his consent before providing further services. The district court granted

2 summary judgment in favor of the law firm and ordered that judgment be entered in favor

of the law firm in the amount of $3,546.61 plus interests and costs. This appeal followed.

DECISION

“[Appellate courts] review a district court’s grant of summary judgment de novo to

determine whether any genuine issue of material fact exists and whether the district court

erred in applying the law.” Larson v. Nw. Mut. Life Ins. Co., 855 N.W.2d 293, 299 (Minn.

2014). To defeat summary judgment, the nonmoving party must do more than “create[] a

metaphysical doubt as to a factual issue” or “rest on mere averments.” DLH, Inc. v. Russ,

566 N.W.2d 60, 71 (Minn. 1997). We review the evidence in the light most favorable to

the party against whom summary judgment was granted. McIntosh Cty. Bank v. Dorsey &

Whitney, LLP, 745 N.W.2d 538, 545 (Minn. 2008).

Consent

Kapacs argues that the district court erred by granting summary judgment to the law

firm because the law firm was required, after exhausting the initial retainer, to obtain his

consent before providing any additional services. In connection with this argument,

Kapacs argues that the agreement is ambiguous regarding whether he would be notified

that the initial retainer had been exhausted and required to replenish it before further

services would be provided by the law firm.

“[T]he primary goal of contract interpretation is to determine and enforce the intent

of the parties.” Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320,

323 (Minn. 2003). We determine the parties’ intent from the plain language of the

instrument and will not rewrite the contract when its plain meaning is unambiguous.

3 Dorsey & Whitney LLP v. Grossman, 749 N.W.2d 409, 418 (Minn. App. 2008). A contract

is ambiguous if it is “susceptible to more than one reasonable interpretation.” Caldas v.

Affordable Granite & Stone, Inc., 820 N.W.2d 826, 832 (Minn. 2012).

In granting summary judgment to the law firm, the district court stated that the

agreement did not require the law firm to notify Kapacs of the exhaustion of the retainer or

contain any language suggesting that Kapacs was required to pay an additional retainer in

order to continue receiving legal services. We agree.

Paragraph 13 of the agreement, titled “Subsequent Retainers,” provides that “[w]hen

little to no money remains credited to your account, you may be notified of the need for an

additional advance fee retainer.” The paragraph further states, “In the event your initial

retainer is depleted and we fail to request a subsequent retainer, you agree to pay the

outstanding balance on each monthly statement unless specified in a separate written

agreement.” Kapacs’ argument that the agreement is ambiguous stems primarily from the

fact that the agreement states that a client “may be notified of the need for an additional

retainer” if the initial retainer is exhausted. (Emphasis added.) While Kapacs is frustrated

by the fact that the agreement allows the law firm the option of requesting an additional

retainer, the mere fact that it is within the discretion of the law firm under the agreement

whether to request an additional retainer does not render the agreement ambiguous or

invalid.

Kapacs notes that paragraph 12 of the agreement, titled “No Client Credit,” states:

“We do not loan money or extend credit to our clients. Therefore, there must be a sufficient

balance on your retainer to cover the firm’s estimate of the costs of completing the next

4 major steps in your case.” Kapacs interprets this provision as meaning that no advance

services will be provided unless a sufficient balance of the retainer remains. Kapacs’

interpretation is undermined, however, by the next sentence, which provides that “[a]ll

balances on your account are due 15 days after the date of the statement.” If Kapacs’

interpretation were correct, there would never be a need for clients to pay monthly bills for

services because there would always have to be sufficient funds remaining in the retainer

to cover the services provided by the law firm. Moreover, the sentence Kapacs relies upon

does not state that the law firm will stop providing services if there is an insufficient balance

in the retainer to cover services or indicate that the client must consent to any future

services as soon as the retainer is exhausted. Finally, the language Kapacs relies on is

qualified by the fact that it only requires a balance in the retainer sufficient to cover the

costs of the “next major steps” in the client’s case. This sentence is not sufficient to create

ambiguity regarding whether the law firm was required to get the client’s consent before

providing services after the exhaustion of the retainer.

Kapacs argues that he was assured by the attorney representing him that he would

be given a warning before the initial retainer was exhausted and given 30 days before being

required to replenish the retainer. Even if the attorney made such an oral representation,

the agreement provides that it “contains the entire agreement between [Kapacs] and [the

law firm] regarding this matter and the fees, charges and expenses to be paid relative

thereto.” The agreement further provides that it was not to be modified “except by written

agreement signed by [Kapacs] and a representative of the firm.” Because Kapacs provides

no evidence that he and a representative of the law firm signed a document altering the

5 terms of the agreement as he claimed, his argument about the attorney’s alleged oral

representation is without merit.

Breach of the Agreement

Kapacs argues that the district court erred by granting summary judgment in favor

of the law firm because the law firm breached the agreement. “The elements of a breach

of contract claim are (1) formation of a contract, (2) performance by plaintiff of any

conditions precedent to his right to demand performance by the defendant, and (3) breach

of the contract by defendant.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848

N.W.2d 539, 543 (Minn. 2014) (quotation omitted).

Kapacs first asserts that the law firm breached the agreement by not providing notice

that he needed to replenish the retainer before rendering further services and by providing

no opportunity for him to consent before the services were rendered. As discussed above,

however, the agreement unambiguously states that the law firm “may” request an

additional retainer after the initial retainer is exhausted and that if the law firm does not

request an additional retainer, the client agrees to pay the outstanding balance on the

monthly statements. As such, the law firm did not breach the agreement by not requesting

an additional retainer upon the exhaustion of the initial retainer and continuing to provide

legal services.

Next, Kapacs argues that the law firm breached the agreement by “failing to provide

the correct and complete invoices for more than [six] months.” This argument refers to the

fact that the law firm mistakenly billed Kapacs twice for the fee paid to retain the financial

consultant. Though Kapacs claims that it took more than six months to correct the bill, this

6 assertion is not supported by the record, which indicates that the law firm was made aware

of the error in late March 2014 and corrected it by May 9, 2014. Moreover, Kapacs fails

to put forth any facts or law indicating that this billing error, which was corrected less than

a month and a half after it was discovered, amounts to a breach of the agreement.

Poor Representation

Kapacs argues that he was poorly represented by the law firm in the dissolution

proceedings and received little benefit from its services. Kapacs argues that the law firm

represented him poorly because he was not able to see his children as much as he wished

during the proceedings, the law firm did not adequately defend the attacks of his wife’s

counsel, and the law firm did not inform him about meetings and deadlines. The only

evidence Kapacs points to in support of these allegations is one email exchange between

Kapacs and the law firm regarding his thoughts on parenting time, but this evidence does

not indicate that the law firm’s representation was inadequate.1 Furthermore, Kapacs fails

to point out any evidence showing that the allegedly flawed representation of the law firm

led to any of the unfavorable outcomes he experienced during the dissolution proceedings.

As Kapacs has failed to do more than “rest on mere averments,” DLH, 566 N.W.2d at 71,

the law firm’s allegedly deficient performance is not a reason to conclude that the district

court erred in granting summary judgment.

1 Kapacs also points to two other emails included in his brief’s addendum where he expresses his dissatisfaction with the parenting time arrangements to the law firm. However, as these emails were not part of the district court record, we will not consider them on appeal. Minn. R. Civ. App. P. 110.01 (“The documents filed in the trial court, the exhibits, and the transcript of the proceedings, if any, shall constitute the record on appeal in all cases.”).

7 Due Process Rights

Kapacs argues that the district court violated his constitutional due process rights

because he was provided no opportunity to be heard or to contest statements made by the

law firm. After the law firm moved for summary judgment, Kapacs filed a responsive

memorandum with the district court. Pursuant to Minn. R. Gen. Pract. 115.03, the law firm

filed a reply memorandum and a supplemental reply memorandum. Kapacs argues that he

was denied his due process rights because he was denied his right to respond to the law

firm’s reply memoranda. Minn. R. Gen. Pract. 115.03 does not, however, provide that a

nonmoving party must be allowed the opportunity to respond to the moving party’s reply

memoranda. Kapacs essentially argues that a party’s due process rights are violated if a

party is not always granted the opportunity to respond to the opposing party’s argument,

despite the fact that such a premise would result in a never-ending circle of responsive

memoranda. Because there is no requirement that Kapacs be allowed to respond to the law

firm’s reply memoranda, the district court did not violate Kapacs’ due process rights.

Professional Responsibility

Kapacs argues that the law firm failed to uphold “the requirements of professional

responsibility.” Because Kapacs failed to raise this argument to the district court, we will

not consider it. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (“A reviewing court

must generally consider only those issues that the record shows were presented and

considered by the trial court in deciding the matter before it.” (quotation omitted)).

8 Breach of Good Faith

Kapacs argues that the law firm forfeited its right to compensation by breaching its

duty of good faith. Kapacs’ contention that the law firm did not act in good faith is

premised on his argument that the law firm was required to receive his consent before

rendering any further legal services once the retainer was exhausted. As discussed above,

however, the agreement did not require that Kapacs consent before the law firm provide

further legal services. We conclude that this argument is without merit.

Unreasonable Legal Fees

Kapacs argues that the district court erred in granting summary judgment to the law

firm because the legal fees he incurred were unreasonable or out of proportion to the legal

services he received. The law firm provided Kapacs with itemized bills detailing the

services it provided to him, and Kapacs does not argue that the law firm did not provide

these services or that such services were unnecessary for his representation. Additionally,

Kapacs does not argue that the law firm charged unreasonable hourly fees. Rather, Kapacs

argues that it is unreasonable for him to have to pay more than $8,000 when the law firm

only “attended one 30 min[ute] initial hearing at [f]amily court, had a 2.5 [hour] meeting

with the [child] custody evaluators at city hall and did some correspondence.”

The itemized bills demonstrate, however, that in its representation of Kapacs the

law firm drafted numerous documents, prepared for hearings, communicated extensively

with opposing counsel and the district court, and appeared on Kapacs’ behalf at the initial

case management conference and the financial early neutral evaluation. Additionally,

paragraph 10 of the agreement requires that Kapacs contact the law firm within 30 days of

9 receipt of a bill regarding any complaints regarding the charges on his statement and that

failure to do so would result in Kapacs’ agreement that he owe the amounts reflected in the

statement. Despite this requirement, Kapacs never objected to the bill and in fact admitted

in his July 2014 emails that he was accepting all of the bill and that the bill was on his list

to pay. Moreover, a party must do more than “rest on mere averments” to defeat a motion

for summary judgment, DLH, 566 N.W.2d at 71, but Kapacs merely alleges that the fees

are unreasonable without providing further argument or evidence. Because Kapacs has

failed to establish that a genuine issue of material fact exists or that the district court erred

in applying the law, we conclude that the district court properly granted summary judgment

in favor of the law firm.

Arguments in Reply Brief

While Kapacs raises new arguments in his reply brief, a reply brief “must be

confined to new matter raised in the brief of the respondent.” Minn. R. Civ. App. P. 128.02,

subd. 4. “If an argument is raised in a reply brief but not raised in an appellant’s main

brief, and it exceeds the scope of the respondent’s brief, it is not properly before this court

and may be stricken from the reply brief.” Wood v. Diamonds Sports Bar & Grill, Inc.,

654 N.W.2d 704, 707 (Minn. App. 2002), review denied (Minn. Feb. 26, 2003). Because

the arguments were not presented in Kapacs’ principal brief, we will not consider them.

Affirmed.