Opinion
12-2-1957
Prentiss MOORE, Plaintiff, Cross-Defendant, Respondent and Cross-Appellant, v. Leopold FELLNER and Clara M. Fellner, Defendants, Cross-Complainants, Appellants and Cross-Respondents.* Civ. 22204.
Sidney Dorfman, Beverly Hills, for appellants and cross-respondents. George Bouchard, Los Angeles, for respondent and cross-appellant.
Prentiss MOORE, Plaintiff, Cross-Defendant, Respondent and Cross-Appellant,
v.
Leopold FELLNER and Clara M. Fellner, Defendants, Cross-Complainants, Appellants and Cross-Respondents.*
Dec. 2, 1957.
Hearing Granted Jan. 28, 1958.
Sidney Dorfman, Beverly Hills, for appellants and cross-respondents.
George Bouchard, Los Angeles, for respondent and cross-appellant.
SHINN, Presiding Justice.
The plaintiff in this action, an attorney at law, recovered judgment against Leopold Fellner and Clara M. Fellner (hereafter referred to as Fellner, or defendant), for $12,825 as attorney's fees. He had sued for $51,720 and he appeals from the judgment, claiming that he should have been awarded the full amount of his claim. Fellner appeals, contending that judgment should have been in his favor. Incidental to these issues was a cross-complaint of Fellner seeking a declaration of his rights as against Moore under the employment contract.
The evidence consists of writings passing between the parties. These are set forth in the margin. The first is the contract of the employment of Moore. 1 By this agreement Moore was employed to prosecute an action against one Steinbaum for damages for breach of an agreement. Included in the services of the attorney was the defense of an action by one Gerzon for a broker's commission. Moore was given $500 on account of costs in the first action and the same amount as a retainer in the second action. He was to receive 20 per cent of the amount collected from Steinbaum in a settlement without suit and 25 per cent if the case went to trial or was settled on the eve of trial after full preparation had been made. The Steinbaum case was tried and resulted in a judgment in favor of Fellner of $104,500. Gerzon recovered judgment for $20,000, which was settled for $17,500. Steinbaum appealed. [132 Cal.App.2d 509, 282 P.2d 584]. Moore, with the consent of Fellner, rendered certain services in connection with the appeal, as hereafter stated.
On March 2, 1954 Moore addressed a letter to Fellner stating that if Fellner wished him to handle the appeal his fee would be $2,000 plus the necessary costs. 2 On March 3rd Fellner replied. 3 The reference was to the provision of the employment contract reading as follows: 'It is understood that this agreement covers our understanding to the conclusion of these two cases in the Superior Court and, at out option, in any of the higher courts.' Moore replied under date of March 10th. 4
On March 13th Fellner wrote Moore again calling attention to the provision of the agreement we have just quoted. 5 To this letter Moore replied on March 19th. 6 Moore declined to sign a substitution of attorneys and Fellner obtained an order in the District Court of Appeal for the substitution of other counsel on the appeal. Thereafter on June 30th Moore addressed another letter to Fellner. 7
From these writings the court made its findings and conclusions. In brief, the findings were the following: (1) Plaintiff demanded of Fellner $2,000 as additional compensation for handling the appeal and refused, after demand by Fellner, to handle the appeal unless he was paid $2,000; he was discharged by the Fellners and refused to sign a substitution of attorneys and, (2) 'that it is not true that the defendants discharged plaintiff without cause or justification'; (3) On June 30, 1954 plaintiff rescinded his agreement with defendants; (4) At the time of his discharge plaintiff had 'substantially performed his part of the agreement with defendants, and the services rendered by him were of value to defendants' and, (5) the services of plaintiff were of the value of $13,325, that the same would be a fair and reasonable compensation to plaintiff, and that plaintiff had been paid on account the sum of $500. As conclusions of law the court found: (1) Moore was required to represent Fellner on the appeal without further charge; (2) His demand for an additional fee was wrongful and a breach of his contract. But the court nevertheless concluded that Moore was entitled to judgment for the reasonable value of his services.
We shall discuss the questions involved in the following order: (1) Was Moore required to represent Fellner on the appeal without compensation other than the contingent fee. (2) Did he demand payment of an additional fee of $2,000 and refuse to render any further services on the appeal unless he was paid that sum. (3) If Moore breached his contract was he discharged for cause and, (4) if he was discharged for cause was he entitled to recover for the value of his services to the date of his discharge.
It is conceded by Moore that he was required to represent Fellner on the appeal if Fellner elected to avail himself of his services. His contention is that he was never notified that Fellner desired his services on the appeal. This is a specious contention. He had done everything there was to do up to the time he made his demand for an additional fee. He had arranged for the deposit of $110,000 in U. S. Treasury Certificates to stay execution of the judgment; he had arranged for clerk's and reporter's transcripts, and notified Fellner of the charges; Fellner had paid the charges and advised Moore that any additional costs would be paid. Nothing remained to be done by Moore except to write a respondent's brief. The rendition of these services, with the consent of Fellner, proved beyond question that Fellner expected to be represented on the appeal by Moore and by no one else. And it is equally clear that up to the time he conceived the idea of charging an additional fee Moore fully understood that Fellner had no thought of changing attorneys. Notice to Moore that his services on the appeal were desired was unnecessary and would have been an idle act. The demand for additional compensation was an ultimatum. It left Fellner no choice between continuing with Moore under the contingent fee agreement and employing other counsel, but only a choice between paying an additional $2,000 to Moore and obtaining other counsel. The argument that Moore would have rendered services on the appeal under the contingent fee agreement if he had been requested to do so is but a shallow pretense, since it is clear from the correspondence that he had no such intention. The finding to that effect was correct and is conclusive on the appeals.
Moore contends that he did not demand payment of an additional fee and did not refuse to handle the appeal if it was not paid. The express findings of the court were to the contrary and are likewise conclusive. There is nothing in the correspondence we have quoted that tends in the slightest degree to support the contention presently made, and there was no other evidence on that subject.
The findings just mentioned established a breach of contract by Moore. It is true that Fellner notified him that he was discharged, but that was a mere formality. When Moore refused to handle the appeal without additional compensation and gave Fellner a choice between paying it and obtaining other counsel, he discharged himself. Fellner merely acquiesced in his retirement from the case.
This is not merely a case where an attorney has been discharged for cause, even if we assume that Moore was discharged, and did not withdraw himself from the case. It is a simple case of breach of contract by the attorney.
The question is whether an attorney who undertakes to render an entire service may quit when an important part of the work remains undone and deserve to be paid for partial performance. As well might a surgeon claim compensation when he had quit in the middle of an operation, or a barber when he had shaved half of a customer's face. The answer is that there is no concept of law of fair dealing that permits one contracting party to repudiate his obligation to render personal service and hold another party to his reciprocal obligations under the contract. If this were permitted one who had contracted to render an entire service for an agreed price could avoid loss under a bad bargain by merely stopping work at any stage and demanding compensation for partial performance. Contracts for personal services would be worthless.
The judgment in favor of Moore cannot be sustained unless there is some special rule of the law of contracts that is applicable only to lawyers. But this could not be. The law is the same for lawyers as for anyone else who undertakes to render personal service.
It is evident that the California case law on the subject has been misunderstood. The only case cited by plaintiff as authority for his contention that he was entitled to recover for partial performance, even if he was discharged for good cause, is Salopek v. Schoemann, 20 Cal.2d 150, 124 P.2d 21. It is said by Moore that this case established the rule that an attorney employed on a contingent fee basis and who is discharged for good cause may recover the value of his services to the date of his discharge. This is the rule where the attorney has rendered part performance and stands able and willing to fulfill his contract. That was the situation in the cited case. The attorney had not breached his contract and breach of contract is the controlling fact in our case.
Plaintiff has cited cases which hold that an attorney who is wrongfully discharged may recover the value of his services to the date of his discharge, but these, obviously, are not in point.
The finding that Moore rescinded the contract of employment on June 30, 1954 is without support in the evidence. There was no contract in existence at that time. And since Fellner had given Moore no cause for rescinding the contract, Moore's notice of rescission was ineffective for any purpose.
The views we have expressed on Fellner's appeal also dispose of Moore's appeal and his claim that he was entitled to recover not $12,825 but $51,750.
Upon the facts found judgment should have been rendered in favor of the defendants.
The judgment is reversed with instructions to the trial court to vacate the present judgment, make new conclusions of law, and enter judgment on the findings and conclusions in favor of defendants Fellner.
VALLEE, J., concurs.
PARKER WOOD, J., dissents. --------------- * Opinion vacated 325 P.2d 857. 1 'May 29, 1951 'Mr. Prentiss Moore 'Attorney at Law '453 South Spring Street 'Los Angeles 13, California. 'Dear Mr. Moore: 'This will confirm our oral understanding that you are to represent myself and my wife in the prosecution of a claim against Morris Steinbaum arising from a breach of contract dated the fourteenth day of April 1951 and also that you are to defend as action against us filed by Irvin D. Berzon in the Superior Court, being Action No. 585893. 'As compensation for your services in these matters we agree to pay you 20% of any amount recovered from Morris Steinbaum before trial and 25% if the action proceeds to trial, including three days before the start of the trial. We agree to advance all necessary costs, including court costs, depositions or any other costs incurred incident to the preparation of the case such as appraisers' fees and expert witness' fees, but not any fees to any other attorneys you may employ in these matters. We are depositing at this time with you $500.00 on account of such costs and agree to make available any additional amounts necessary for these purposes upon notice from you. However, all these advances will be deducted from the amount to be recovered and the compensation of 20% and 25% resp. will be based on the net amount. 'In addition to this we are depositing another $500.00 as an advance payment which will be a retainer. However, this amount will be deducted from your compensation of 20% or 25% resp. 'It is understood that his agreement covers our understanding to the conclusion of these two cases in the Superior Court and, at our option, in any of the higher courts. 'Yours very truly 'Leopold Fellner 'Clara M. Fellner 'Approved: 'Prentiss Moore' 2 'March 2, 1954 'Mr. and Mrs. Leopold Fellner '9970 West Pico Blvd. 'Los Angeles, California 'Dear Mr. and Mrs. Fellner: 'The deposit of $110,000.00 of Treasury Certificates has been made by the defendant Steinbaum and we have received notification that the Clerk's Transcript has been prepared and the appeals is proceeding. 'The reason for writing you at this time is to advise you that in our opinion the respondents' briefs and the costs on appeal will approximate $500.00, of course, depending upon the length of our reply to the appellant's brief. We shoud like to have you advise as soon as possible as to whether you desire this office to handle the appeal and if so, our fee will be $2,000.00, plus the necessary costs above outlined. Should you desire any other firm to handle the appeal, kindly notify us as soon as possible and I am enclosing the only current obligation which is now due, the cost of the balance of the Reporter's Transcript in the amount of $16.00. 'Respectfully, 'Moore, Webster, Lindelof & Hughes 'Prentiss Moore 'J 'Prentiss Moore' 3 'March 3, 1954 'Mr. Prentiss Moore '417 South Hill Street 'Los Angeles 13, Calif. 'Dear Mr. Moore: 'I have received your letter of March 2nd and I have paid the bill of $16.00 to the Reporter. 'I assume that you overlooked that part of our agreement which specifically stipulates that the agreed fees cover and include all the appeals. I would appreciate it if you would let me know your considered opinion about this matter. 'Whatever the court costs will be we will make payments upon receipt of the bills to the court Reporter as in the past. 'Cordially yours, 'Leopold Fellner' 4 'March 10, 1954 'Mr. Leopold Fellner '9970 West Pico Blvd. 'Los Angeles, California 'Dear Mr. Fellner: 'I am at a loss to understand the position taken in your letter of March 3rd inasmuch as during the negotiations which we had leading to the making of our agreement with respect to the fees of this office, it was clearly understood to be through proceedings in the Superior Court. 'As you may recall, you pointed out at the time you corrected the letter which we had prepared for your signature on May 25, 1951, (altered by your letter of May 29, 1951) that what you wanted clearly understood was, regardless of the outcome of the proceedings in the Superior Court, you wanted to have the opportunity of choosing other counsel if you saw fit after the termination of the litigation in the Superior Court. 'As you well know, we at no time over made any agreement that presupposed the carrying of your litigation beyond the Superior Court under the contingent fee arrangement of twenty-five per cent of the recovery from Morris Steinbaum any more than it would be assumed that we would carry an appeal in the event the litigation was lost in the trial court, through the state appellate courts and possibly the Supreme Court of the United States, without any compensation. Your only request was that you be allowed the opportunity of changing counsel after the determination of the proceedings in the trial court. 'In accordance with that understanding we wrote you on the 2nd, due to the imminence of the appeal, to advise you that it was still satisfactory with this office for you to choose any counsel for the purpose of defending your rights on appeal; that should you care to have this office represent you in the appeal, that our fee would be $2,000.00 in addition to any costs on appeal. 'As you may recall, you asked for and were given the balance of costs that had been deposited in connection with the trial litigation after the judgment had been entered. We received notice that the next amount due is $25.80, payable to the County Clerk for preparation of the Clerk's Transcript on Appeal, which must be paid by March 14th. 'Moore, Webster, Lindelof & Hughes 'Respectfully, 'Prentiss Moore' 5 'March 13, 1954 'Messrs. Moore, Webster, Lindelof & Hughes '417 South Hill Street 'Los Angeles 13, California 'Dear Mr. Moore: 'I have received your letter of March 10th. The reading of it was quite a shocking experience to us. As I outlined in my letter of March 3rd we were confident that you overlooked the terms of our agreement and that your considered opinion, based on the terms of the contract, would not differ from ours. 'Your statements and implications are false and designed to distort the issues. We never considered and negotiated about anything else but a contingency fee which would cover the litigation to the final satisfaction of our claim, and if necessary, at our option, any litigation to the highest court. The purpose of a contingency arrangement had no other purpose for us but to assure ourselves against payments of attorneys' fees which would be difficult for us to handle. We emphasized this in our agreement by saying: 'of any amount recovered from Morris Steinbaum.' As if this would not be enough, we emphasized it again: 'it is understood that this agreement covers our understanding to the conclusion of these two cases in the Superior Court and, at our option, in any of the highest courts.' 'I do not understand what bearing our right to change counsel would have on this matter, still I wish to state the facts as they are. When I asked you during our negotiations what the purpose of a retainer fee was, when there is a contingency fee arrangement, you explained that this was just something like earnest money in case I would change counsel and there was never any suggestion on my part that I would consider this possibility. 'You used the fact that I picked up the balance of our deposit with you to distort the issues. You know well what happened. When we had to pay, without prior notice from you, over $1,500 to the Court Recorder and Appraiser, I told you that it was very difficult for us to raise this money on such a short notice. Then I suggested that, as we were paying the bills direct to the Court Reporter, and other expenses, it would not serve any purpose to have a deposit lying around in your office. 'We cannot see any possibility of a misunderstanding on your part. We cannot look at it in any other way but that you tried to take advantage of our position. This, of course, has disrupted and destroyed any relationship of confidence between us. We must consider that you have deliberately breached our agreement of May 29th 1951. For that reason 1) we consider your relationship as our attorney terminated by your conduct and we will seek other counsel to represent us in this litigation. 2) The agreement of May 29th, 1951, between us has been terminated by you and we must accept the termination of the contract and act accordingly. 'Our new counsel will contact you as soon as possible. He will conduct any necessary negotiations with you in our behalf. 'Yours very truly, 'Leopold Fellner' 6 'March 19, 1954 'Mr. Leopold Fellner '9970 West Pico Blvd. 'Los Angeles, California 'Dear Mr. Fellner: 'I have your letter of March 13th. Of course, most of the statements you make in your letter as to facts are unfounded. There is no attempt by me to breach our agreement of May 29th as you state. In writing you I was merely endeavoring to clarify my position so far as the appeal of your case was concerned. 'From your correspondence, I can only conclude that you are exercising your option to employ other counsel for the appeal, and that the fee arrangement is still in effect. According, I will expect payment of twenty-five per cent of all funds received from Morris Steinbaum. 'Respectfully, 'Prentiss Moore' 7 'June 30, 1954 'Mr. and Mrs. Leopold Fellner '9970 West Pico Blvd. 'Los Angeles, California 'Dear Mr. and Mrs. Fellner: 'By your action in securing an order of court June 22, 1954, substituting Sidney Dorfman as your attorney in place of myself in the case of Fellner v. Steinbaum, you have made it impossible for me to complete the performance of my part of any agreement that we had regarding your representation in that case. Your discharge of me was without cause and was wrongful. I hereby elect to treat the contract of my employment as your attorney in that matter as rescinded and will shortly commence an action for the determination of the reasonable value of my services to date. In this action you will receive credit for the $500.00 retainer that you gave me at the time the representation first arose. 'I am sending a copy of this letter to Mr. Sidney Dorfman for his information. 'Yours truly, 'Prentiss Moore 'CC: Mr. Sidney Dorfman '10332 La Grange Avenue 'Los Angeles 25 'California'