### IN THE COURT OF APPEALS OF TE NNESSEE AT KNOX VILLE A ssi gne d on Br ie fs , D ec em be r 6, 200 6

DU DLE Y W. TA YLO R, d/b/a THE TA YLO R L AW F IRM v. JA MES DA LLE, KA THER INE D ALL E, MOS HE SH LOU SH, CL AR ENC E L.

HENDRI X and ROBERT HI CKMAN

Direc t Appeal from the Chancer y Court for K nox Coun ty No. 163496-1 Hon. John Weaver , Chancellor

No. E2006-00634-COA- R3-CV - F ILED FEBRUARY 16, 2007

I n this action for a judg ment for f ees f or leg al servic es re ndere d, the Trial Court ente red Judgment fo r p la int if

f andde fe nd a nts app e a le d. We a ff ir m.

Te nn. R . A pp. P .3 App e al a s o f Rig ht ; J udgm e nt of t he Cha nc e r y C our t A ffirm e d.

H ER SCH EL P I CKE N S F RAN KS , P.J ., delivere d the opinion of the court, in which D. M I CH A EL S WI NEY , J ., and S HAR ON G. LEE , J ., joined.
Cr a ig J. Do na lds on , G re e nb a c k, Te nn e sse e , f or app e lla nts

. Dudley W. Tay lor, Knoxvi lle, Tenne ssee, f or appe llee.

OP IN ION

Plaintiff’s Complaint a l l ege d t h at h e h ad p er fo rm ed l ega l s er v i ce s fo r d ef en d an t s, and was owe d $35,755.75.

Pla int if f the n f ile d a Moti on fo r Summ ary Judg me nt or in the a lte rn a tiv e , f or De fa ult Judg me nt, a sse rt ing t hat de fe nd a nts ha d b e e n s e rv e d w ith pr oc e ss b ut h a d f a ile d to a ns we r. Hi s aff idavit attested to the amount of fee s owed, and he filed a Statement of Materia l Fac ts that the leg al-2-

service s had bee n perf

ormed, a nd he advanced e x penses on be half of the defe ndants, and they wer e provided with mont h l y s t at em en t s of the same . Further the de fendants had made one payment of $5,000.00, which had be en cr edited, lea ving the balanc e cla imed.

The c ourt entered an Orde r Granting Par tial Summ ary

J udg ment, finding the defe ndants had failed to file any counter vailing a ffidavits, re serving the issue of wh ether his fees wer e re asonable

. Def

endants then asked the Court to allow them to pr esent their defe nses, and they filed numerous a ffidavits.

Appar ently , the Court’s ea rlier O rder

g ranting partial summary judgme nt was rec onsidered, be cause an evide ntiary hearing w as held on the issues on F ebrua ry 27 and 28, 2006. F oll ow ing the e vid e nti ary he ari ng , the Cou rt e nte re d a Fin a l J ud g me nt, inc or po ratin g its fi nd ing s, conclusions and opinion. I n its findings, the Court noted that the dispute did not appe ar to be whether the fee s wer e rea sonable except for de fendants’ complaint that plaintiff did not disclose or com m u n i ca t e his hourly

rate to the defe ndants. The Court noted that de fendants had arg ued that most of the service s wer e attributable to the corpor ation, which the plaintiff had settled with t he corpor ation for $15,000.00.

The Court found that the i ndividual defe ndants did not neg otiate t he fe e ag ree ment with plaintiff, but rather

the fe e ag ree ment wa s n ego t i at ed by the cor poration’s attorney

and the individual defenda nts’ attorney . The Court said the plaintiff te stified that he told t h e at torney s at their initial meeting that he believe d the m atter could be resolved for less than $10,000.00, but that he billed monthly

and they could dischar g e him at any time. The C ourt rec ited that corpor ate c ounsel “eve ntually

testified that the plaintiff’ s fee s wer e ca pped at $10,000.00, subjec t to the corpora tion’s permission t o ex ce ed t h at amount, and that the plaintiff a g ree d that therewould be no cost to the individual defenda nts.” The Cou rt s aid that Charles Kite, one of the attorney s for the individual defe ndants, testified that plaintiff wa s to have a $10,000.00 reta iner but coul d n o t re me mber a ny thing abo ut the fe e s o f the ind ivi du a l de fe nd a nts , b ut w he n c on fr on te d w ith his a ff ida vit , h e a g re e d w ith the lang uag e that the c orporation was to pay the fe es. The Court found that plaintiff’ s fee s exceede d $10,000.00 within a very short time, and that the plaintiff ha d been g iven incomplete fac ts a bout the litigation, and that the scope of the re pr e se ntatio n b ro a de ne d. Th e Cou rt fo un d th a t pl a int if

f b e g a n c or

re sp on din g wi th the c or

po rate attorney about his bill i n Fe bruary , 2004, and that this attorney stated in a letter

dated Marc h 11, 2004, that no one had problems wit h Tay lor’s work. He r ealized that suit modifications “may have incre ased the scope of work bey ond that orig inally contemplated.” The Court also observed that the plaint if f c on tin ue d to repr esent the de fe nd a nts a ndse ndmon thl y bil ls f or mon ths a ft e r this corr espondenc e, but when the plaintiff attempted to mee t with defendants, c o u n s e l was unre sponsive and ar rang ements could not be ma de.
The Cour t co n cluded that the e vidence , including pla intiff’s testimony , the eng ag ement letter s and monthly bills, weighe d ag ainst the testimony of the de fendants, and pr e po nd e rate d in fa vo r o f the plaint if f. Th e Cou rt

e xpla ine d th a t th e e vid ence sh owe d that a ll-3-

defe ndants wer e re sponsible for pla i n t i ff’ s bills, and that his fee wa s not cappe d at $10,000.00. Further, that plaintiff pe rformed the ser vices ove r a c onsiderable period of time, a nd the Court noted that of the individual defe ndants, only Mr. and Mrs. D alle testified.
The Court then e ntere d J udg ment ag ainst the individual defendants for $20,000.00, taxed costs equally

betwee n the parties, and certified the J udg ment as final pursuant to Tenn. R. Civ. P. 5 4. 02 . T he pa

rt ie s r a ise the se iss ue s:
1. Whe the r the app e a l sh ou ld b e dis mis se d f or app e llan ts ’ alleg e d f

a ilu re to c omp ly wi th the ru le s o f this Cou rt ?
2. W hether

the trial court erre d by

not concluding that Tay lor’s re lease of Au ro ra re le a se d a

pp e lla nt, a ndwh eth e r a

pp e lla nts c a n r e ly

on the re le a se when they

failed to plea d rele ase a s an af firmative de fense ?
3. Whether the trial c ourt err ed by entering a

judgme nt for Tay lor for attorney ’s fee s where he did not disclose his hourly rate as mandated by

Rule 1.5(b) of the disciplinary rules, and wher e Ta y lor did not plead nor r ely on the theory of qu a ntu m me ru it?
4. Wheth er t h e evidenc e pre ponderates ag ainst the trial court’s finding that Tay lor didno t a g re e to r e pr e se nt a pp e lla nts a t no c os t to the m?
5. Whether the trial court err ed in fa iling to awa rd Taylor’s full amount of fe es a nde xpe ns es in cur

re d inthe re pr e se ntatio n o f a pp e lla nts , a ndin f

a ili ng to a wa rdpr e jud g me nt i nte re st? Ap pe lle e arg ue s th a t th is c a se sh ou ld be dis mis se d for “ c on tin uin g failu re to c omp ly with th e Ru le s o f th is Co u r t” , p o in ti n g to th e f a c t th a t th e ap p e ll a n ts r e p e ate d ly mi s sed filing de a dli ne s w he n f

ili ng the ir tr a ns c ri pt andbrie f. Whil e app e lla nts did fi le s the se ite ms i n a n u nti me ly manner , w h ic h w e d o n o t c o n d o n e , th e f il in g s w e r e u lt im a te ly

ma d e a n d w e e le c te d to a ll o w the appea l to procee d.

Appe ll an ts a

r g u eth at s in c ea

p p e ll e en o n s u it e d

the corpor ation based upon its payment o f $ 1 5 , 0 0 0

. 0 0 , t h e o t h e r d e f e n d a n t s s h o u l d b e r e l e a s e d a s w e l l b a s e d o n c o m m o n l a w t h e o r y. Ap pe lle e arg ue s th a t de fe nd a nts faile d to ple a d s uc h an a ff ir ma tiv e de fe ns e . We ho ld that app e lla nts raised th is is s u e b u t th e T r ia l C o u r t f o u n d th a t p lain ti f

f d idn o t i n te n d to r e le a s e th e in d iv id u al defe ndants when he nonsuited the corpor ation.

A p pellants counter

that the nonsuit, without specifically rese rving claims ag ainst the other de fenda nts operate s to automatically rele ase the other de fendants as well, and cite the case of Kreutzmann v. Bauman , 609 S.W .2d 736 (Tenn. Ct. App. 1980) and to Tenn. Code Ann. §24-7- 106.This, of course , ignor es the fa ct that this Court recog nized in Kreutzmann that th e statut e 1 had the e ffe ct of c hang ing the common law rule

. -4- Te nn . Co de An n. § 2 4- 7- 10 6 p ro vid e s:
All rec eipts, relea ses, and discha rg es in writing , whether of a debt of rec ord or a contrac t under seal, or otherwise, shall have e ffe ct ac cording to the intention of the parties thereto. How ever , the re mittance an d ac ce ptance of a c heck or other instrument bearing on its fa ce words that it is pay ment or satisfac tion in full of a debt or oblig ation shall not be considere d conclusive evidenc e of an intention that the debt or oblig ation for whic h the same is g iven be discharg ed or r elea sed; provided, that the re mittee of such instrument tender s back to the r emittor the funds re prese nted by su c h in str ume nt.
I n Kreutzmann , we e x plained that the statute now codified at Tenn. Code Ann. §24- 7-106, wa s orig inally enac ted in 1858, and “c hang ed the old tec hnical rule of the c ommon l aw , wher eby the rele ase of one co-oblig or automatically rele ased another co-oblig or.” Id . at 737-738. We we nt on to state:
Since 1858 the law ha s been in Te nnessee that the re lease of one co -o b l i go r on a

con tr a c tua l de bt d oe s n ot r e le a se a no the r c o- ob lig or , u nle ss the c on se qu e nt r e le a se of the oth e r i s th e int e nt o f the pa rt ie s to the re le a se ins trume nt.
Id . at 738. We rejec t appellants’ a rg ument that in th e absenc e of a written re lease which expressly states th at co -obl igor s are still bound, then the “old c ommon law” would control and 1 dictate that the c o-oblig ors ar e automatica lly rele ased. A plain rea ding of the statute and c ase la w do e s n ot l e a d to su c h a

re su lt. Th e statut e simply sa y s that a re le a se “ sh a ll h a ve e ff e c t a c c or din g to the int e nti on of

the pa rt ie s the re to” , an d the Chanc e llo r fo un d tha t app e lle e didno t in te ndto r e le a se the other pa

rties, and the e vidence does not preponde rate ag ainst the C h an ce l l o r’s finding. Te nn. R. App. P. 13(d).

Ap pe lla nts ne xt ar g ue that th e Tria l Court er re d in aw ard ing a tto rn e y ’s fe e s b e c aus e appellee did not disclose his hourly rate , and asse rt that RPC Rule 1.5(b) re quires disclosure of an attorney ’s hourly rate , and ins ist on the authority of Fell v. Rambo , 36 S.W .3d 837 (Tenn. Ct. App. 2000), appe llee’s c ontrac t with defendants cannot be e nforc ed due to the violation of the Rule.

RPC Rul e 1. 5( b) state s, “ [w]he n the la wy e r h a s n ot r e g ula rl y re pr e se nte d th e c lie nt, the ba sis or

rate of the fe e sh a ll b e c ommun ic a te d to the c lie nt, pr e fe ra bly in writi ng , be fo re or

wi thi n a re asonable time after

commencing t h e re prese ntation.” I n this case, a ppellee te stified that he dis c los e d h is h ou rl y rate to Ste ph e n A. I rv ing wh o wa s c or

po rate c ou ns e l f

or the c or po ratio n, a t th e ir initial meeting, a nd while Dalle te stified that he wa s not made aw are o f t h is disclosure, when-5-

appellee sent his bills in Febr uary , the hourly

rate was shown on the f

ace of the bills. Therefore, appellee communicated his hourly rate “within a re asonable time after co m m encing the repr esentation.”

I n this case, ther e wa s no basis to refuse to enforc e the contrac t betwee n plaintiff and defe ndants. Ther e wa s no evidence that it was not neg otiated in g ood faith, and the re w as no e vid e nc e that the la wy e r br e a c he d his fi du c iary ob lig a tio n to the c lie nts . M or e ov e r, app e lla nts did not question the rea sonablene ss of the fe e cha rg ed by appellee , they

simplyarg ued that they

thought it was “c apped” at $10,000.00.

Finally , appellants a

rg ue t h at the Trial Court er red in c harg ing the fee to the individuals, since the individuals testified that their under standing was that a ppellee w ould repre sent them at no cost. The evidence establishes that the individuals signe d a fe e contr act with appe llee by signing the eng age m ent l etter, a nd nowher e does the letter state that the individuals will not be char g ed any

part of the fee

. I n fac t, the letter sets forth how f ees and expenses would be billed, and states that the bala nce w ould be due promptly eac h month. Eac h individual defe ndant s igne d and re turne d th is l e tte r, a ndwe ho ld the Tria l Co urt pr op e rl y e nf or c e d th e fe e c on tr a ct. T his iss ue is wi tho ut m e ri t. Ap pe lle e arg ue s th a t th e Tria l Co urt sh ou ld h a ve a wa rd e d him the fu ll a mou nt o f h is fee , and also failed to awar d pre- judgme nt interest. The Trial Court a war ded $20,000.00 which w as $2,576.00 less than appe llee cla imed was due . As we ha ve re cog nized:

The re asonable ness of a reque sted fee depends on t h e fa ct s of ea ch ca se. Acc ording ly , appellate courts review a trial court' s decision re g arding attorney ' s fee s using the abuse of

discretion standa

rd.
Fell v. Rambo , 36 S.W .3d 837, 853 (Tenn. Ct. App. 2000)( citations omitt ed). The re is no showing in this case that the Trial J udg e abuse d his discretion in its award of $20,000 as a r easona

ble fe e. Reg arding prejudg ment interest, appe llee asse rts that his eng ag ement letter discloses that interest shall be c harg ed at 1% per month, and that the Trial Court e rre d in f ailing to a war d that interest.
I n Myint v. Allstate Ins. Co. , 970 S.W .2d 920, 927 (Tenn. 1998), the Supreme Court explained that an awa

rd of prejudg ment interest “is within the sound discretion of the trial court a nd the dec ision w i l l not be disturbed by an appe llate court unless the rec ord re veals a manifest and pa lpable a bu se o f

d i s c r e t i o n
. . . . T h i s s t a n d ar d o f r e v i e w c l e ar l y

v e s t s t h e tr i a l c o u r twi th considera ble def ere nce in the pr ejudg ment interest dec ision. Genera lly stated, the a

buse of discr etion standard doe s not authorize an appe llate court to merely substitut e its judg ment for that of the trial court. “ (citations omitted).

Ap pe lle e ’s c la im f

or pr e jud g me nt i nte re st i s n ot ba se d on the statut e , b ut r a the r i t is-6-

a provision of the contrac t for attorney ’s fees. The basis of t he Trial Court’s awa rd of attorney ’s fe es was the appellee ’s contra ct with the clients, and w e have conclude d that the judg ment awa rded unde r the contract was rea sonable, taking int o acc ount all the provisi ons of t he appellees’ c ontrac t. The Tria l Co urt di d n ot a

bu se his dis c re tio n inthe a wa rd , a ndwe fi ndthi s is su e to b e wi tho ut m e ri t.
We affirm the J udg ment of the Trial Court and re mand, wit h the cost of t he appe al a s s e s s e d o n e
- h a l f

t o D u d l e y T a yl o r

a n d o n e
- h a l f

t o t h e d e f

e n d a n t s , j o i n t l y a n d s e v e r a l l y.

______________________________ H ER SCH EL P I CKE N S F RAN KS , P

. J.