Opinion
Case No. 3:03CV7238
February 25, 2004
ORDER
This is a copyright case which was settled after the plaintiff secured new counsel. Pending is its former counsel's motion for payment of attorneys' fees pursuant to a retainer agreement between counsel and the plaintiff. For the reasons that follow, the motion shall be granted.
Counsel and plaintiff entered into a retainer agreement on April 18, 2003. That agreement quoted counsel's $180 hourly rate and stated that a partial advance payment of $1600 was required. The letter indicated that the firm "normally" required payment of one-half the anticipated services where the fee can be estimated. That amount was paid.
Thereafter, counsel sent monthly statements (though the May, 2003, statement for $1688.35 was not sent until several months later). By the end of September, 2003, three months' bills were past due (June, July, and August) and the total due, including the September bill, was $2891.53.
On October 10, 2003, counsel and plaintiff met to discuss, inter alia, the anticipated fee to complete settlement negotiations, which had been proceeding, albeit more slowly than plaintiff desired. Plaintiff contends that it was told that settlement could be concluded for a fee of $5000 — which it interpreted as a cap on the total fee.
Counsel acknowledges telling plaintiff that settlement could be accomplished for $5000 — but that he made clear that amount was in addition to the retainer and the amounts billed in the interim. That contention is supported by the fact that, as of the date of that meeting, $1600 had been spent as a retainer, and $2891.53 had been billed but remained unpaid. No attorney would have represented, and no reasonable client could have anticipated, that completion of settlement negotiations — which still had a good distance to go — could be accomplished with the expenditure of only about three more hours of the attorney's time.
On December 19, 2003, the defendant tendered a settlement check for $25,000 payable to the plaintiff and counsel. According to counsel, he instructed the plaintiff to sign the accompanying settlement agreement, but plaintiff refused to do so unless counsel reduced its fee. This, in turn, counsel refused to do.
In early January, 2004, plaintiff retained new counsel. Shortly thereafter, the settlement agreement was confirmed and a new check was issued to plaintiff. Payment was stopped on the check issued in December.
Plaintiff contends that the maximum fee owed by it is $5000, less the retainer of $1600. Plaintiff acknowledges, therefore, that it owes $3400. Counsel contends that its total fee an expenses are $9130.25, and that, less the retainer of $1600, plaintiff owes a balance of $7530.25.
In addition to contending that the fee agreement was modified orally at the October 10, 2003, meeting, plaintiff claims that counsel:
1) failed to comply with its obligation under the agreement to give advance notice of expenditures in excess of $2000;
2) failed to provide monthly fee statements, as provided in the retainer agreement (i.e., when the May, 2003, statement was not tendered for several months);
3) failed to follow plaintiff's instructions to a) add additional parties to the case, b) issue a press release, and c) convey an offer;
4) exceeded the scope of his authority when he a) negotiated away plaintiff's rights without prior approval and b) instructed the defendant to tender a settlement check payable to plaintiff and counsel;
5) violated his obligations under the Code of Professional Responsibility; and
6) seeks compensation in an amount that is neither fair nor reasonable.
I find none of these contentions well taken.
As noted, I find that the original retainer agreement was not modified orally, except to the extent that counsel represented that the settlement would be accomplished with an expenditure of no more than $5000 in additional fees. At the time, about $4500 had been paid or billed, and much remained to do.
With regard to the remaining contentions, I find no basis, first, for plaintiff's claim that counsel failed to give advance notice of expenditures in excess of $2000. A review of the monthly statements shows that no monthly invoice or expenditure exceeded $2000. There was, accordingly, nothing about which to give advance notice.
Second, though the May statement was sent late, the delay was not material. The retainer agreement stated that counsel "generally send[s] statements at the end of the month." By its own terms, the agreement referenced a practice, rather than made a promise, about monthly billing.
Third, there is no evidence, aside from the plaintiff's contention, that he instructed counsel to add additional parties. Though plaintiff may have requested that such occur, it is clear it was aware that his request was not fulfilled. Failure to join additional parties was, under the circumstances, a reasonable decision on the part of counsel. By common agreement, every effort was to be made to keep expenditures to a minimum. Adding additional parties would have been contrary to this approach, and increased the magnitude and complexity of the litigation, and necessarily made it more expensive — if not much more so.
Nothing in the retainer agreement or counsel's duties to plaintiff required counsel to issue a press release. It appears, in any event, that counsel declined to do so on reasonable grounds: namely, that plaintiff's proposed release included statements about defendant that, in counsel's view, were potentially defamatory and actionable.
Plaintiff contends that counsel failed to convey an offer to defendant to accept payment in 2004, provided that the settlement were increased by ten percent. It appears that, as of that point, a settlement had been reached to pay the amount finally tendered (and, then, in January, finally accepted). That the ten percent add-on for payment in 2004 was not, moreover, material, even if it should have been conveyed to defendant, is apparent from the fact that settlement was reached in 2004 without the add-on.
Fourth, as counsel points out, the settlement agreement incorporated protections for plaintiff's copyright interests that accorded with plaintiff's instructions. There is, therefore, no basis for plaintiff's complaint that counsel gave away any of those rights.
There is nothing improper with receipt of a check payable to one's client and oneself. That is a routine and customary practice, which does not, contrary to plaintiff's fifth contention, violate the Code of Professional Responsibility.
Finally, the fees are neither unfair nor unreasonable. Plaintiff complains that the statements are insufficiently detailed. Its complaint comes rather late in this dispute — if plaintiff was dissatisfied with the form of the monthly statements, it should have asked for more detail at the outset.
Plaintiff fails to show that the fees are unreasonable in view of the work undertaken on its behalf. To be sure, a lot of time was expended on a case that neither offered nor could ever offer a substantial return. Counsel pointed out that risk, and, as well, the risks inherent in any dispute — namely, that control of litigation and its expenses is not in the hands of any single party.
In this case, a small company was suing a much larger entity, which had much to gain from delay. In such circumstances, there is little that David can do except to wait for Goliath to make his move. Meanwhile, time passes and expenses mount.
To be sure, spending nearly $10,000 to get $15,000 may well be no bargain. Other counsel might have achieved the same settlement in less time and for less money. But the fact that successor counsel quickly completed the settlement is not evidence that such necessarily would have been so — successor counsel came in at the end, rather that at the beginning. Its apparent efficiency is not a benchmark by which to evaluate the performance of former counsel or its value.
In sum, I find that plaintiff owes the fees engendered by the services provided, and I find no basis for concluding that those services were deficient, or that those fees are not due and owing.
It is, therefore,
ORDERED THAT the motion for fees in the amount of $7530.25 be, and the same hereby is granted.
So ordered.