Opinion
No. LLI CV 09 6000954
July 6, 2010
MEMORANDUM OF DECISION
This is an interpleader action brought by the plaintiff, Attorney William J. Wellman ("Wellman"), who is holding $24,743.20 in his trustee account. The defendants, John Spatola ("Spatola") and Attorney Henry Moy ("Moy"), both claim to be entitled to the funds, and have filed dueling counterclaims against each other. The matter was tried on March 19, 2010 and June 4, 2010. There were substantial conflicts in the evidence. As the trier of fact, the court must resolve issues of credibility. See State v. Nowell, 262 Conn. 686, 695 (2003); Lacic v. Thomas, 78 Conn.App. 406, 409-10, cert. denied, 266 Conn. 922, 835 A.2d 472, (2003). "The determination of a witness' credibility is the special function of the trial court." (Internal quotation marks omitted.) State v. Knight, 266 Conn. 658, 674 (2003). "It is the trier's exclusive province to weigh the conflicting evidence, determine the credibility of witnesses and determine whether to accept some, all or none of a witness' testimony." (Internal quotation marks omitted.) Hoffer v. Swan Lake Ass'n., Inc., 66 Conn.App. 858, 861 (2001). The court finds the following facts and credits the following evidence.
In 2004 Spatola retained Wellman to defend him before the Town of New Milford Ethics Commission in an ethics complaint alleging that Spatola had violated the New Milford Ethics Ordinance while serving as a member of the Planning Commission and the Board of Finance. Spatola and Wellman agreed that Wellman would be paid at the rate of $150 per hour for his work, and that Wellman could engage other attorneys to assist him at the same rate. Wellman engaged Moy to assist him. Wellman testified that he brought a written retainer agreement to Spatola's house. Spatola testified that he could not remember that happening. No written fee agreement was introduced in evidence.
Moy spent significant time on this matter including time spent directly with Spatola. Wellman included Moy's bills with his own invoices to Spatola. For example, Wellman's invoice of February 1, 2005 to Spatola includes an entry for "Additional work-H. Moy (See attached invoices)." Attached to Wellman's bills were invoices from Moy addressed to Wellman. Spatola paid all of Wellman's invoices and Wellman then paid Moy for his time.
In February 2005 Spatola approached Wellman about representing him in defense of a restraining order application brought by Spatola's wife. Wellman decided against representing Spatola in that case and referred Spatola to Moy. Moy represented Spatola in that defense. Apparently there was no written retainer agreement and there was no evidence of the hourly rate. On April 25, 2005 Spatola signed a written agreement with Moy entitled "Attorney Engagement Agreement" which provides that Spatola retained Moy to represent him in defense of an action for dissolution of marriage. Pursuant to that agreement, Spatola paid a retainer of $3,000 against which Moy would bill his time at the rate of $200 per hour. That case was withdrawn prior to judgment.
On May 18, 2006 Spatola met with Wellman and Moy to discuss bringing an action against the Town of New Milford to recover the attorneys fees and expenses which he had incurred in his defense of the ethics proceeding. At that meeting, both Wellman and Moy informed Spatola about the risks and potential benefits of such an action, with Moy cautioning against bringing suit. Wellman and Moy told Spatola that the rate would have to be $200 per hour. At the end of the meeting Spatola said that he wanted to proceed. There was no written fee agreement provided by either Wellman or Moy. Spatola testified that he paid Wellman a $10,000 retainer.
No retainer was paid to Moy. Moy prepared written invoices for his work which he addressed to Wellman not Spatola. Wellman sent Moy's invoices to Spatola. Wellman never gave Spatola any invoices for his own work. On an irregular basis Wellman would ask Spatola for money. Spatola paid Wellman some money but the amount was not introduced into evidence. From this money, Wellman gave Moy at least $7,751.20. The court cannot find any other credits on Moy's invoices introduced onto evidence.
After fruitless attempts to negotiate a settlement over the next year, suit was commenced in March 2007, by Wellman on behalf of Spatola as the plaintiff against the Town of New Milford and the town's insurer. Moy filed his appearance on behalf of Spatola on March 1, 2008. Wellman and Moy engaged in substantial pre-trial work on behalf of Spatola which resulted in all parties agreeing to mediate the case with Judge Holzberg in Middletown. At the mediation session on February 23, 2009, Spatola received an offer of settlement in the amount of $90,000. Spatola discussed this offer with Wellman and Moy and asked them how much he owed in legal fees. Wellman said that he was owed approximately $35,000 but that he would waive these fees. Moy said that he was owed approximately $27,000 and that he expected to be paid. Spatola agreed to settle the case for $90,000 at that time without voicing any objection to Moy's fee.
Thereafter, Spatola signed the necessary releases and Wellman received the $90,000 in settlement. When Spatola came to Wellman's office to pick up the net proceeds, Wellman told him that he was going to pay Moy the balance of his fees in the amount of $24,743.30. Spatola spoke to Moy and told him that they were going to have to do something about Moy's fees. Moy refused to make any concessions. Spatola became angry and left the office without resolving the issue of Moy's fee. Wellman has retained the $24,743.30 in his escrow account.
Spatola argues that Moy is entitled to nothing because he never had a direct contractual relationship with Moy. He says that Wellman engaged Moy to help him and that Wellman has waived all of his outstanding fees. Spatola also argues that Moy is not entitled to recover any outstanding fees because he failed to comply with Rule 1.5(b) of the Rules of Professional Responsibility as they existed at the time the case against the town was commenced.
There are some unusual aspects to Moy's representation of Spatola. Although Spatola met with and authorized both Wellman and Moy to bring suit against the town, Moy did not appear for Spatola when suit was commenced. Moy fell back into the same billing pattern used in the previous ethics case in which Moy addressed his invoices to Wellman and never billed Spatola directly. Wellman received a retainer from Spatola but Moy did not. A review of Moy's invoices does not show any instance where Moy dealt directly with Spatola apart from Wellman.
On the other hand, there is no doubt that Moy performed valuable services for Spatola. Spatola certainly knew that Wellman and Moy were both representing him because he met with Wellman and Moy together, agreed to pay them each $200 per hour, appeared with them in court, and allowed Moy to perform many hours of service on his behalf. At the mediation hearing he authorized a settlement for $90,000 after he knew that Moy had an outstanding bill for approximately $27,000 and that, unlike Wellman, he was not prepared to waive his fee. Despite this knowledge, Spatola proceeded to settle the case without objecting to Moy's bill at that time. If he really thought that he had no obligation to pay Moy, it stands to reason that he would have raised an objection before agreeing to settle. For these reasons, the court finds that Moy has proven, by a fair preponderance of the evidence, that he had a direct attorney-client relationship with Spatola.
Spatola raised no objection that Moy's fees were unreasonable. The court's review of Moy's billing shows that his fees were reasonable and contributed to the ultimate resolution of the case. The only arguable basis Spatola has for avoiding responsibility for May's fees is Rule 1.5(b) of the Rules of Professional Conduct as it existed when Moy began representing Spatola on this case in 2006. This section states:
"When the lawyer has not regularly represented the client, the basis or rate of the fee, whether and to what extent the client will be responsible and to what extent the client will be responsible for any court costs and expenses of litigation, and the scope of the matter to be undertaken shall be communicated to the client, in writing, before or within a reasonable time after commencing the representation."
The commentary to the rule provided, at that time:
"When the lawyer has regularly represented a client, they ordinarily will have evolved an understanding concerning the basis or rate of the fee . . . A written statement concerning the fee reduces the possibility of misunderstanding."
There are Superior Court cases which have held that Rule 1.5(b) is mandatory and that violation of it precludes an attorney from recovering a fee. See, for example, Freccia Plotkin v. Castro, Superior Court, judicial district of Stamford, Docket No. 9601516738 (September 9, 1996); Landino v. Black Tie Limousine, Superior Court, judicial district of New Haven at New Haven, Docket No. 980408538 (January 26, 1999).
Neither Wellman nor Moy communicated to Spatola, in writing, the basis or rate of the fee. Moy argues that this was unnecessary because he had regularly represented Spatola. Moy had rendered legal services to Spatola in three prior cases. In the ethics defense he did not have a direct relationship with Spatola. He assisted Wellman and charged his fees to Wellman at the rate of $150 per hour. He had a direct attorney-client relationship in the defense of a restraining order and, later, in the defense of a dissolution of marriage action. In the later case he had a written fee agreement with Spatola which called for a fee of $200 per hour, the same fee he is attempting to charge in the present case.
The term "regularly represented client" is not defined in the Code. Here, I find that Spatola was a regularly represented client of Moy's, thereby relieving Moy of the obligation to communicate to Spatola the basis or rate of the fee. It is important to note that Spatola has not objected to Moy's billing by the hour at the rate of $200 per hour, or to the number of hours spent by Moy. As mentioned in the commentary to the code, Spatola and Moy had "evolved an understanding concerning the basis or rate of the fee" based upon Moy's prior representation in the restraining order defense and the dissolution of marriage defense. Certainly, it would have been preferable if Moy had provided Spatola a written confirmation of his representation and the terms thereof. But, I do not find that Moy violated the Rules of Professional Conduct. For these reasons, the absence of a written communication from Moy to Spatola of the basis or rate of the fee is not a bar to Moy's recovery.
Judgment shall enter ordering the plaintiff, William Wellman, to pay the balance of $24,743.20 to the defendant, Henry Moy, in full satisfaction of his claim for attorneys fees from the defendant, John Spatola. Upon payment, Wellman is discharged from all liabilities to the defendants in relation thereto. Judgment shall enter for Moy on both counterclaims.