Title: Halstrom v. Dube

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

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SJC-12598 
 
FREDERIC N. HALSTROM1  vs.  MARILYN P. DUBE, administratrix,2 
& another.3 
 
 
 
Suffolk.     December 3, 2018. - February 15, 2019. 
 
Present:  Gants, C.J., Lenk, Gaziano, Lowy, Cypher, & Kafker, 
JJ. 
 
 
Attorney at Law, Contingent fee agreement.  Limitations, Statute 
of.  Practice, Civil, Summary judgment.  Estoppel.  Waiver. 
 
 
 
 
Civil action commenced in the Superior Court Department on 
July 7, 2016. 
 
 
The case was heard by Michael D. Ricciuti, J., on a motion 
for summary judgment. 
 
 
The Supreme Judicial Court granted an application for 
direct appellate review. 
 
 
 
Frederic N. Halstrom, pro se. 
 
Michael J. Grace for the defendants. 
 
 
                     
 
1 As assignee of Halstrom Law Offices, P.C. 
 
 
2 Of the estate of David O. Hicks. 
 
 
3 Michael J. Grace. 
2 
 
 
 
CYPHER, J.  This is a contract action by a law firm to 
collect an outstanding legal fee from a former client.  The 
plaintiff, Frederic N. Halstrom, as assignee of Halstrom Law 
Offices, P.C. (HLO), brought this action for legal fees against 
Michael J. Grace, a former HLO employee, and Marilyn P. Dube, as 
representative of the estate of David O. Hicks, a former HLO 
client, for the payment of certain legal fees allegedly owed by 
Hicks to HLO under a contingent fee agreement.  A Superior Court 
judge allowed the defendants' motion for summary judgment, 
concluding that Halstrom's claim for fees was time barred by the 
statute of limitations applicable to contract actions set forth 
in G. L. c. 260, § 2.4  We affirm. 
 
Background.  We summarize the facts found by the motion 
judge, supplementing them where necessary with undisputed facts 
in the record. 
 
In 2007, Hicks retained HLO to serve as counsel in a 
medical malpractice action in the Superior Court.  The 
contingent fee agreement between Hicks and HLO regarding that 
litigation, executed on December 7, 2007, included the following 
discharge provision: 
"If the client wishes to discharge the Law Firm, the client 
shall, in this event, be liable to the Law Firm for a fee 
at the hourly rate of Three Hundred Fifty Dollars ($350.00) 
                     
 
4 Frederic N. Halstrom timely appealed, and we granted his 
application for direct appellate review. 
3 
 
 
per hour, as substantiated by a Notarized Statement of 
Hours, provided by the Law Firm to the client." 
 
Grace, then an employee of HLO, performed most, if not all, of 
the legal work on the case, but neither he nor HLO recorded 
Grace's hours contemporaneously. 
 
HLO terminated Grace on June 25, 2010, while Hicks's 
medical malpractice case was pending.  Hicks, notified of 
Grace's departure, elected to have Grace continue to represent 
him in the medical malpractice action.  Grace and HLO were 
notified of Hicks's election in writing on July 1, 2010.  On 
July 2, HLO transferred Hicks's file to Grace at his new firm, 
Denner Pellegrino, LLP (Pellegrino), and shortly thereafter 
Hicks entered into a second contingent fee agreement regarding 
his medical malpractice action with Pellegrino.5  In August 2013 
and July 2015, HLO asked Grace to provide it a statement of the 
hours he spent on Hicks's medical malpractice action while in 
HLO's employ; Grace was not cooperative.  On August 17, 2015, 
Halstrom, as assignee of HLO, brought suit against Grace in the 
Superior Court in an effort to compel Grace's cooperation.6  In 
                     
 
5 Both contingent fee agreements were executed before Mass. 
R. Prof. C. 1.5 was revised to require that a client's fee 
agreement with successor counsel state whether the client or 
successor counsel is to be responsible for payment of former 
counsel's fees and expenses, if any such payment is due.  See 
Mass. R. Prof. C. 1.5 (c), as amended, 480 Mass. 1315 (2018). 
 
 
6 Therein, Halstrom alleged breach of contract and breach of 
fiduciary duties, and sought equitable relief in the form of a 
4 
 
 
his complaint in that action, Halstrom noted that "the statutes 
of limitations are running on Halstrom's rights" against 
numerous former clients for legal fees owed in accordance with 
HLO's contingent fee agreement. 
 
Halstrom commenced the present contract action in the 
Superior Court on July 7, 2016, seeking "an amount exceeding 
$30,000.00 for legal services rendered" from Hicks's estate 
(count I) and stating that because Hicks's attorney's fees for 
the underlying medical malpractice action are capped by statute, 
Hicks's estate has a cause of action against Grace "and anyone 
else who has already received payment for legal fees" in 
connection with the underlying action (count II).  Thereafter, 
the defendants moved for summary judgment on the ground that 
Halstrom commenced the action beyond the six-year statute of 
limitations applicable to contract actions.  Halstrom opposed 
the motion, arguing that his 2015 action against Grace tolled 
the limitations period because the action "made it abundantly 
clear that it was a lawsuit to begin vindicating HLO's right to 
attorneys' fees" and "formally served as the commencement of its 
claim against [Hicks] for attorneys' fees."7  Halstrom argued in 
                     
court order compelling Grace to submit to a deposition 
concerning the time he expended on Hicks's medical malpractice 
case and others. 
 
 
7 In his motion papers, Halstrom suggested that the statute 
of limitations began to run "on the date of the breach of 
5 
 
 
the alternative that the defendants (1) are estopped from 
asserting the statute of limitations as a defense because they 
waited too long to act on the defense, (2) are barred from 
asserting the defense by the equitable doctrine of laches, or 
(3) waived the statute of limitations defense. 
 
After a hearing, the judge issued a written decision 
concluding that HLO's contract claim was in fact time barred and 
that Halstrom's various equitable arguments lacked merit.  On 
appeal, Halstrom argues that the statute of limitations began to 
run either on July 6, 2015, when Grace ignored HLO's second 
request for a statement of hours, or on November 13, 2012, when 
Hicks, Grace, and Pellegrino settled the underlying medical 
malpractice action, received the settlement check, and failed to 
pay HLO its outstanding legal fees.8  He also restates his 
tolling, estoppel, waiver, and laches arguments. 
                     
contract," i.e., the date of HLO's final letter to Grace 
requesting Grace's cooperation.  At the motion hearing Halstrom 
also argued that, notwithstanding the discharge provision 
language to the contrary, Hicks did not owe HLO any legal fees 
until Hicks recovered on his medical malpractice claim. 
 
 
8 Halstrom also suggests, in a cursory fashion without 
citation to supporting legal authority, that "[b]y its terms the 
contingent fee agreement made presentation of a notarized 
statement of hours expended a condition precedent to rendering 
[Hicks] liable for attorney's fees converted to an hourly rate 
as opposed to the contingent fee basis for the payment of 
attorney's fees to his attorney."  This contention was not 
presented either to the motion judge or this court in any 
meaningful way, and as a result, we are not obligated to 
consider it here.  See Carey v. New England Organ Bank, 446 
6 
 
 
 
Discussion.  We review a grant of summary judgment de novo 
to determine whether, viewing the evidence in the light most 
favorable to the nonmoving party, the moving party is entitled 
to judgment as a matter of law.  Mass. R. Civ. P. 56 (c), as 
amended, 436 Mass. 1404 (2002).  See Homeowner's Rehab, Inc. v. 
Related Corp. V SLP, L.P., 479 Mass. 741, 750 (2018).  Viewing 
the record in the light most favorable to Halstrom, we conclude 
that the motion judge properly entered judgment in favor of the 
defendants because Halstrom's action was barred by the statute 
of limitations applicable to contract actions set forth in G. L. 
c. 260, § 2 (contract actions shall be commenced "only within 
six years next after the cause of action accrues"). 
 
1.  Statute of limitations.  Ordinarily an attorney's cause 
of action for legal fees accrues no later than the date his or 
her services are terminated unless the parties enter into a new, 
enforceable agreement concerning the payment of outstanding 
                     
Mass. 270, 285 (2006) (issues not fairly raised or argued before 
trial court are waived); Care & Protection of Martha, 407 Mass. 
319, 330 n.11 (1990), citing Mass. R. A. P. 16 (a) (4), as 
amended, 367 Mass. 921 (1975) (arguments made in cursory and 
conclusory fashion without citation to supporting legal 
authority do not rise to level of appellate argument and need 
not be considered).  Nonetheless, we note that "emphatic words" 
are generally considered necessary to create a condition 
precedent that will limit or forfeit rights under an agreement 
and no such words appear here.  See Massachusetts Mun. Wholesale 
Elec. Co. v. Danvers, 411 Mass. 39, 46 (1991); Thomas v. 
Massachusetts Bay Transp. Auth., 39 Mass. App. Ct. 537, 543 
(1995). 
7 
 
 
fees.  Jenney v. Airtek Corp., 402 Mass. 152, 154 (1988), citing 
Eliot v. Lawton, 7 Allen 274, 276 (1863) (statute of limitations 
starts to run for attorney's services in handling case when 
action is terminated).  See Taft v. Shaw, 159 Mass. 592, 593 
(1893) (statute of limitations for past services triggered by 
conclusion of attorney's employment); Powers v. Manning, 154 
Mass. 370, 377 (1891) (statute of limitations commences to run 
on attorney's claim for past services at time of discharge). 
 
The plain language of HLO's fee agreement compels the same 
result.  The pertinent discharge provision unmistakably provides 
that if the client discharges HLO, then the client will be 
liable to HLO for work performed by HLO at a prescribed rate.  
Therefore, whether we apply the usual rule restated in Jenney, 
402 Mass. at 154, or confine our analysis to the plain language 
of HLO's fee agreement makes no meaningful difference -- HLO's 
cause of action against Hicks for legal services accrued no 
later than July 1, 2010, the date that HLO was notified that 
Hicks had elected to terminate HLO's services. 
 
We are not persuaded by Halstrom's argument that the 
statute of limitations began to run either on July 6, 2015, when 
Grace ignored HLO's final request for a statement of hours, or 
on November 13, 2012, when Hicks, Grace, and Pellegrino settled 
the underlying medical malpractice action, received the 
8 
 
 
settlement check, and failed to pay HLO its outstanding legal 
fees. 
 
As to the first argument, Grace's refusal to cooperate with 
HLO has no bearing on when HLO's cause of action for legal fees 
against Hicks accrued.  Grace was not a party to HLO's 
contingent fee agreement with Hicks, and despite Halstrom's 
protestations to the contrary, Grace's cooperation was not 
required for Halstrom to initiate an action against Hicks within 
the applicable statute of limitations.  As the motion judge 
pointed out, Mass. R. Civ. P. 11 (a), as amended, 456 Mass. 1401 
(2010), does not require that Halstrom have an exact damages 
figure before filing suit to recover on the fee agreement, only 
that "to the best of his knowledge, information, and belief 
there is a good ground" to support the suit. 
 
As to the second argument, the fact that a contingency 
contemplated in HLO's fee agreement with Hicks -- settlement -- 
eventually came to pass also has no bearing on when HLO's cause 
of action for legal fees against Hicks accrued, because Hicks's 
discharge of HLO terminated HLO's right to recover on the 
contingent fee agreement.  See Malonis v. Harrington, 442 Mass. 
692, 696-697 (2004) (discharge terminated attorney's right to 
recover on contingent fee contract); Hug v. Gargano & Assocs., 
P.C., 76 Mass. App. Ct. 520, 525 (2010) (termination of 
attorney's engagement ends attorney's right to recover on 
9 
 
 
contingent fee agreement).  Indeed, "[t]he general rule in 
Massachusetts is that, on discharge, an attorney has no right to 
recover on the contingent fee contract, but thereafter, the 
attorney may recover the reasonable value of his services on a 
theory of quantum meruit."  Malonis, supra at 701, and cases 
cited.  HLO sought to avoid that result here by including a 
discharge provision in its fee agreement that purported to 
establish the value of HLO's services, but that provision as 
written does not affect our statute of limitations analysis.  If 
HLO had conditioned its entitlement to fees on Hicks's recovery 
in the underlying medical malpractice suit, then Halstrom's 
argument that the statute of limitations began to run when Hicks 
received his settlement check might be persuasive; but HLO did 
not do that.  It is to the terms of that provision that HLO is 
now bound. 
 
In short, in accordance G. L. c. 260, § 2, Halstrom had 
until July 1, 2016, to bring his contract action against Hicks.  
That Halstrom missed the deadline "by a few days" is 
inconsequential -- his claim is time barred nevertheless. 
 
2.  Halstrom's equitable arguments.  Halstrom's remaining 
arguments do not require lengthy comment.  Halstrom's contention 
that his August 2015 action against Grace "in pursuit of 
[attorney's] fees" tolled the six-year limitations period on his 
contract action against Hicks is patently devoid of merit.  
10 
 
 
Equitable tolling is to be "used sparingly," and the 
circumstances where tolling is available are exceedingly 
limited.  Shafnacker v. Raymond James & Assocs., Inc., 425 Mass. 
724, 725-726, 728-729 (1997) (statute of limitations on 
investor's negligence and breach of fiduciary duty claims 
against brokers was not equitably tolled by investor's filing of 
arbitration claim; proper procedure would have been for investor 
to file complaint within limitations period and have action 
stayed pending result of arbitration), citing Andrews v. 
Arkwright Mut. Ins. Co., 423 Mass. 1021, 1022 (1996) (available 
for excusable ignorance or where defendant affirmatively misled 
plaintiff), and Irwin v. Department of Veterans Affairs, 498 
U.S. 89, 96 (1990) (available where plaintiff "has actively 
pursued his judicial remedies by filing a defective pleading 
during the statutory period").  Halstrom's 2015 suit against 
Grace, which essentially sought Grace's cooperation with HLO's 
requests for statements of the hours he spent on certain cases 
while in HLO's employ, does not fit within any of the standard 
exceptions that permit equitable tolling.  There is no evidence 
that Halstrom was ignorant of the applicable statute of 
limitations or the facts giving rise to the limitation period's 
commencement; in fact, his filings in the 2015 lawsuit support 
the contrary conclusion.  In addition, there is no evidence that 
either of the defendants misled Halstrom or otherwise lulled 
11 
 
 
Halstrom into delaying action on his claim for fees.  See 
Adamczyk v. Augat, Inc., 52 Mass. App. Ct. 717, 724 (2001) 
(statute of limitations not equitably tolled where defendant 
made no affirmatively misleading statements to lull plaintiffs 
into not asserting claims). 
 
Halstrom also argues that the defendants should be estopped 
from asserting the statute of limitations defense because they 
"knew, or at least believed, all along" that the applicable 
statute of limitations would run out on or before July 1, 2016, 
and still they "let more than two years of intense litigation go 
by utterly unnecessarily."  He argues in the alternative that 
the defendants possibly waived the statute of limitations 
defense by failing to assert it before moving for summary 
judgment and that the motion judge could not have concluded that 
they had not waived the defense as a matter of law because the 
record was not developed on that point. 
 
Neither argument is persuasive.  Halstrom does not contest 
that the defendants timely asserted the statute of limitations 
as an affirmative defense in their answer.  Cf. Merrimack 
College v. KPMG LLP, 480 Mass. 614, 632 (2018) (omission of 
affirmative defense from answer generally constitutes waiver of 
that defense); Sharon v. Newton, 437 Mass. 99, 102 (2002) 
(same).  Rather, Halstrom argues that the defendants should have 
acted on the defense in the form of a motion to dismiss before 
12 
 
 
moving for summary judgment.  Halstrom's position is without 
merit.  Our rules of civil procedure "do not compel parties to 
assert pleaded defenses in pretrial motions within an arbitrary 
time period."  Trinity Church in the City of Boston v. John 
Hancock Mut. Life Ins. Co., 399 Mass. 43, 56 (1987) (failure of 
defendants to act on statute of limitations defense until 
immediately prior to trial was not waiver of defense and did not 
estop defendants from raising that defense where it was clearly 
stated in answers from onset of litigation).  Certainly, "[f]or 
any number of legitimate reasons a party might wait until well 
into the litigation, or until trial, to file a motion based on a 
duly-pleaded defense -- including the desire to obtain 
discovery, the knowledge that a defense will depend on a triable 
issue of fact, or simple considerations of strategy."  Id.  We 
echo the motion judge in concluding that neither estoppel nor 
waiver is supported by this record.9 
                     
 
9 Halstrom also posits, with little explanation, that the 
equitable doctrine of laches should preclude the defendants from 
asserting a statute of limitations defense.  We agree with the 
motion judge that it does not, because Halstrom has failed to 
show how the defendants' delay in asserting the statute of 
limitations defense has disadvantaged Halstrom in mounting his 
opposition to the defense.  See, e.g., A.W. Chesterton Co. v. 
Massachusetts Insurers Insolvency Fund, 445 Mass. 502, 517 
(2005) (laches inapplicable where party invoking doctrine failed 
to demonstrate that any delay in asserting claim was unjustified 
or unreasonable and that it had prejudicial effect on party's 
ability to defend against claim). 
13 
 
 
 
Conclusion.  We agree with the motion judge that Halstrom's 
claim for fees was time barred by the statute of limitations 
applicable to contract actions set forth in G. L. c. 260, § 2.  
The judgment of the Superior Court is affirmed. 
 
 
 
 
 
 
 
So ordered.