Opinion
No. A05-2042.
Filed September 12, 2006.
Appeal from the District Court, Carver County, File No. 10CV05210.
Linda S.S. de Beer, de Beer Associates, P.A., (pro se respondent).
Scott G. Swanson, University of St. Thomas School of Law, (for appellant).
Considered and decided by Toussaint, Chief Judge; Stoneburner, Judge; and Worke, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Appellant challenges the district court's judgment for attorney fees, arguing that respondent's withdrawal from representation violated Minn. R. Prof. Conduct 1.4, relieving appellant of the obligation to pay attorney fees that were outstanding at the time respondent withdrew from representation. Appellant also argues that the award of collection costs and attorney fees was excessive. We affirm.
FACTS
Appellant Christine Callahan retained Linda S.S. de Beer, d/b/a de Beer Associates, P.A., to represent her in post-dissolution proceedings in the district court. Callahan signed and initialed all but one of the paragraphs of an "Hourly Fee Agreement" with de Beer. The agreement provided, in relevant part, that Callahan was required to pay each monthly statement in full within 30 days after the billing-statement date, that failure to do so could result in de Beer terminating representation, and that Callahan agreed to reimburse de Beer for court costs and reasonable attorney fees resulting from collection efforts.
The un-initialed paragraph did not refer to attorney fees or collection of attorney fees.
Initially, Callahan was able to pay the fees as billed, but after more than ten weeks of nonpayment and appropriate notice from de Beer that she was terminating representation, de Beer withdrew from representation three weeks before the scheduled trial date. Callahan proceeded to trial pro se and was awarded $10,000 in attorney fees, payable in monthly installments by her former spouse, none of which was paid or assigned to de Beer.
Seven months later, de Beer sued Callahan in Hennepin County to recover the unpaid balance, interest, and collection fees. Callahan submitted an answer and counterclaim alleging that she was prejudiced in the underlying matter by de Beer's withdrawal. The matter was referred to alternative dispute resolution, and the parties agreed to nonbinding arbitration. The arbitrator found in favor of Callahan. De Beer requested a trial and moved for a change of venue to Carver County for trial before the judge who had heard the underlying case and who, de Beer argued, was in the best position to judge whether the withdrawal had prejudiced Callahan. The change of venue was granted. After trial, the district court awarded de Beer the balance due for the outstanding attorney fees, interest, and costs incurred by de Beer for collection. This appeal follows.
Callahan erroneously asserts that de Beer initially brought a conciliation-court action in Hennepin County, lost, and appealed to the district court. The record demonstrates that de Beer's action was initiated in district court.
DECISION
"Generally on appeal from a judgment where no motion for a new trial was made, `the only questions for review are whether the evidence sustains the findings of fact and whether such findings sustain the conclusions of law and the judgment.'" Novack v. N.W. Airlines, Inc., 525 N.W.2d 592, 596 (Minn.App. 1995) (quoting Gruenhagen v. Larson, 310 Minn. 454, 458, 246 N.W.2d 565, 569 (1976)). "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Minn. R. Civ. P. 52.01. In applying rule 52.01, "we view the record in the light most favorable to the judgment of the district court." Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999). "Findings of fact are clearly erroneous only if the reviewing court is left with the definite and firm conviction that a mistake has been made." Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (quotation omitted).
"The standard of review for an appellate court examining an award of attorney fees is whether the district court abused its discretion." Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999). "The award must not be disturbed if it has a reasonable and acceptable basis in fact and principle." Reinke v. Reinke, 464 N.W.2d 513, 514 (Minn.App. 1990) (quotation omitted).
I. de Beer's withdrawal from representation
Minn. R. Prof. Conduct 1.16(b)(5) allows an attorney to withdraw from representation if "the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled." Callahan does not challenge the reasonableness of notice but argues that she did not fail substantially to fulfill an obligation to de Beer. The district court, however, concluded that Callahan's failure to pay outstanding attorney fees justified de Beer's withdrawal. We agree.
The district court erroneously referred to Minn. R. Prof. Conduct 1.16(b)(3) in reaching this conclusion, which clearly uses the language of Minn. R. Prof. Conduct 1.16(b)(5).
Callahan argues that "usually" a family-law judge will not allow withdrawal if a matter is scheduled for trial and cites 14 Martin L. Swaden Linda A. Olup, Minnesota Practice § 22.6 (2000). Callahan fails, however, to acknowledge the portion of her cited authority that provides:
Withdrawal of representation frequently arises in situations where the client is not paying his or her attorney fees. If the withdrawal of representation for non-payment of fees is addressed in the retainer agreement, and if the client is given warning, the attorney should be able to formally withdraw from the case. In order to withdraw, notice of withdrawal must be served on all parties who have appeared and their attorneys, and appropriately filed with the court. No order from the court is necessary.
Id. In this case, withdrawal for nonpayment was fully covered in the agreement signed by Callahan, and de Beer provided the required notice and appropriately filed a withdrawal notice with the court. No court approval was necessary.
Callahan's reliance on comment 4 to Minn. R. Prof. Conduct 1.4, which she cites for the proposition that a lawyer who agrees to represent a client must complete representation, is also misplaced. The rule addresses communication issues between attorney and client, and comment 4 explains that communication will minimize a client's request for information from an attorney. We find the comment irrelevant to the issue before us.
Callahan cites Spearman v. Salminen, 379 N.W.2d 627 (Minn.App. 1986), for the proposition that in family law, the preferred method for an attorney to withdraw from representation is by motion to the district court. Spearman involved a client who did not accept an attorney's case assessment or advice and insisted on tactics that the attorney thought were inadvisable. Id. at 632. The opinion cites 7A C.J.S. Attorney Client § 221 (1980) for the proposition that "[a]n attorney may withdraw for justifiable and lawful cause, upon leave of the court." But Spearman was decided before the adoption of Minn. R. Gen. Pract. 105, which requires notice and filing of withdrawal, but not leave of the court.
Callahan argues that the district court did not place an appropriate burden on de Beer regarding the fee arrangement and incorrectly relied on contract law. Callahan's first argument appears to rely on the C.J.S. statement that because
lawyers almost always possesses the more sophisticated understanding of fee arrangements, it is therefore appropriate to place the balance of the burden of fair dealing and the allotment of risk in the hands of the lawyer in regard to fee arrangements with clients.
7A C.J.S. Attorney Client § 378 (2004). But Callahan has not demonstrated that de Beer failed to meet any "burden of fair dealing," and the fee agreement at issue does not involve any allocation of risk. The district court's detailed findings of fact demonstrate that it fully considered the fee agreement and concluded that it was valid and enforceable. The agreement states in a number of locations, and in bold type, that if there is a balance due on the account, the attorney has the right to withdraw from representation. Callahan provides no evidence that she did not understand the agreement or that the agreement was unjust or unfair.
The district court cited Voigt v. Jones, 404 N.W.2d 830 (Minn.App. 1987), to support its conclusion that Callahan's nonpayment of attorney fees constituted a substantial failure to fulfill her obligations to de Beer under the agreement. Voigt involved a dispute between a remodeling contractor and a homeowner and discussed substantial compliance in the context of contract law. Id. at 831-832, 834. Callahan argues that the attorney-client relationship involves a heightened fiduciary duty that was not present in Voigt. But general contract principles apply to a fee contract between an attorney and client, despite the fiduciary nature of the attorney-client relationship. See Burns v. Valene, 298 Minn. 257, 260, 214 N.W.2d 686, 689 (1974) (stating that it is "well known that a party has an unrestricted right to contract with his attorney as to compensation for services and the manner and measure of payment"). The district court did not err by applying contract principles to the analysis of this case.
In a footnote, Callahan cites In re Estate of Lee, 214 Minn. 448, 460, 9 N.W.2d 245, 251 (1943), for the proposition that "[u]nquestioned fidelity to [the real interests of clients] is the duty of every attorney to [the attorney's] clients. When a breach of faith occurs, the attorney's right to compensation is gone." But Callahan does not argue that de Beer committed a "breach of faith," and we find no merit in the implication that de Beer breached a fiduciary duty to Callahan. Furthermore, arguments not raised in the district court will generally not be considered on appeal. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
II. Award of costs of collection
Callahan argues that the district court's award to de Beer was excessive and erroneous. Although Callahan did not argue to the district court that de Beer's asserted costs were unreasonable, she did argue that de Beer increased the costs of collection by making various motions in the collection action. The district court commented that, in its experience, the amount of fees, costs, and interest seemed "excessive." But the district court stated that there was nothing in the record that would allow it to make a finding that the costs, fees, and interest should be in any specific lesser amount. We agree. Generally, an award of attorney fees "rests almost entirely within the discretion of the [district] court and will not be disturbed absent a clear abuse of discretion." Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn.App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999). Aside from arguing that de Beer could have used a collection agency rather than pursuing litigation, Callahan does not argue that any specific bills or billing amounts are unreasonable or excessive. The record supports the district court's award, and the court did not abuse its discretion.