Court Opinion

ID: 9649611
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:03:29.245994+00
Date Added: 2024-06-11T18:12:13.093373
License: Public Domain

JOYCE, J.,
concurring.
¶ 1 I concur with my esteemed colleague’s decision to remand this case for the entry of judgment on the quantum meruit claim. However, I write to separate myself from the majority’s pronouncement that the law in Pennsylvania requires that a quantum meruit claim sought by a discharged attorney is to be decided based on the computation of the number of hours multiplied by an hourly rate.
¶ 2 It is well-settled that “a client may terminate his relation with an attorney at any time, notwithstanding a contract for fees, but if he does so, thus making the *959performance of the contract impossible, the attorney is not deprived of his right to recover on a quantum meruit a proper amount for the services he has rendered.” Sundheim v. Beaver County Building & Loan Association, 140 Pa.Super. 529, 14 A.2d 349 (1940); Hiscott and Robinson v. King, 426 Pa.Super. 338, 626 A.2d 1235 (1993). Quantum meruit is an equitable remedy. Feingold v. Pucello, 439 Pa.Super. 509, 654 A.2d 1093 (1995), appeal denied, 544 Pa. 646, 664 A.2d 975 (1995). It is defined as ‘“as much as deserved’ and measures compensation under [an] implied contract to pay compensation as reasonable value of services rendered.” Black’s Law Dictionary, 6th Edition (1997), at 1243. Quantum meruit and “reasonable value of services” are virtually interchangeable phrases. See Lampl v. Latkanich, 210 Pa.Super. 83, 231 A.2d 890 (1967) (attorney’s complaint which sought compensation for reasonable value of services was sufficient to put defendants on notice that quantum meruit was the basis of the claim).
¶ 3 The Majority holds that when an attorney’s representation is terminated, thereby breaching a contingency fee contract, the attorney’s quantum meruit claim is to be computed by multiplying the hourly rate by the number of hours worked. To support this position, the Majority relies on Hiscott and Robinson v. King, 426 Pa.Super. 338, 626 A.2d 1235 (1993). In Hiscott, the appellants represented a client in a personal injury action. A contingent fee agreement was entered into; however, the client discharged the appellants prior to the occurrence of the contingency. With the aid of his subsequent attorney, the client negotiated a settlement for $105,000.00. His attorney received $35,000.00 and set aside $6,000.00 in anticipation of a claim by the appellants. The appellants chose to reject this amount, instead filing suit to recover “a fair and equitable fee based upon the relative value of services performed.” Hiscott, 626 A.2d at 1235 (emphasis added).16 A jury trial ensued and a directed verdict was entered for the client since the contingency upon which the fee agreement relied had not yet occurred when representation was terminated. Thus, the trial court concluded, nothing was due to the appellants.17 However, following post-trial motions the court “resolvefd] the issue of the nature and amount of compensation to be afforded to [the appellants] outside the scope and terms of the contingent fee agreement”, id. at 1236, by entering a verdict in the appellant’s favor in the amount of $1,199.15. This represented 8.27 hours of work multiplied by an hourly rate of $145.00.
¶ 4 On appeal, this Court noted that our standard of review was whether the trial court committed an abuse of discretion in entering the directed verdict. In addressing the appellant’s contention that the relative value of services rendered by each attorney should have been submitted to the jury, we stated that since no case law was cited to support this contention, it was without merit.18 Instead, we held that the *960appellants were “limited to a quantum-meruit theory.” Id. at 1238. Since the trial court determined that the quantum meruit amount was determined by multiplying the number of hours worked by the hourly rate, and since this conclusion was supported by the record, we affirmed.
¶ 5 My reading of Hiscott does not set forth a bright line rule that quantum me-ruit actions instituted by discharged attorneys are only to be determined by a mathematical equation. Hiscott simply affirmed the method of calculation used by the trial court to determine what reasonable attorney fees were. This was a proper disposition due to our limited standard of review.
¶ 6 Compare with Hiscott the case of Dorsett v. Hughes, 353 Pa.Super. 129, 509 A.2d 369 (1986). In that case, Mr. Dorsett was hired as the attorney for an estate. A fee agreement was entered into that Mr. Dorsett would receive 7% of the estate. After Mr. Dorsett was dismissed as counsel for the estate, new counsel was retained, and the estate was settled, he commenced an action in assumpsit and was awarded $18,175.43 by a board of arbitrators. This figure represented 7% of the gross value of the estate. The matter was appealed to the court of common pleas and a motion for summary judgment was granted in favor of the estate without prejudice to Mr. Dorsett to present a claim for services at the accounting audit of the estate’s executor.
¶7 On appeal, this Court noted that upon termination of his services and the breach of the contract for fees, Mr. Dor-sett had a right to recover in quantum meruit. The fee for a percentage of the gross value of the estate was found not to be legally enforceable. Instead, the fees were to be based on the “reasonable value of the services rendered and subject to the approval of the Orphan’s Court.” Id. at 371. We stated, in order to determine the reasonableness of counsel’s fees the court must consider:
the amount of work performed; the character of the services rendered; the difficulty of the problems involved; the importance of the litigation; the amount of money or value of the property in question; the degree of responsibility incurred; whether the fund involved was “created” by the attorney; the professional skill and standing of the attorney in his profession; the results he was able to obtain; the ability of the client to pay a reasonable fee for the services rendered; and, very importantly, the amount of money or the value of the property in question.
Id., citing In re Trust Estate of LaRocca, 431 Pa. 542, 246 A.2d 337 (1968) (citations omitted). Affirming the trial court’s entry of summary judgment, we found that the executor was entitled to judgment as a matter of law of the discharged attorney’s claim for a percentage of the estate since the attorney was entitled only to a reasonable value of services rendered. Id., at 372-73. Compare also Robbins v. Weinstein, 143 Pa.Super. 307, 17 A.2d 629 (1941). In Robbins, an attorney performed legal work for a client without reaching an agreement on the legal fee to be paid. After the matter for which he was retained was resolved, the client refused to tender any further payment to the attorney. Suit was filed and the attorney argued that the reasonable value of his services was $500.00. The chancellor determined that the reasonable value of services for the attorney’s work was $300.00. On appeal, this court affirmed, stating:
in the absence of a special agreement, an attorney is entitled to be paid the reasonable value of his services. In addition to the labor and time involved, other factors must be taken into consid*961eration, such as the character of services rendered, the importance of the litigation, the skill necessary, the standing of the attorney, the benefit derived from the services rendered and the ability of the client to pay, as well as the amount of money involved. The question of reasonableness is within the sound discretion of the trial court.
Id. at 633.
¶ 8 In Mulholland v. Kerns, 822 F.Supp. 1161 (1993), the federal district court had the occasion to decide a quantum meruit claim made by a discharged attorney who had been operating under a contingent fee agreement. The district court noted that “Pennsylvania does not have a specific method for determining attorney’s fees quantum meruit, per se, but it does have a standard for determining reasonable attorney’s fees.” Mulholland, 822 F.Supp. at 1169.19 The court then cited to eases where a set of factors was used to determine the reasonable value of an attorney’s services. The district court concluded that to determine what constitutes a reasonable attorney’s fee, a court should apply the principles set forth the In re Trust Estate of LaRocca, supra, and take into consideration the particular circumstances of the case before it. Id., at 1169. While we are not bound by the decisions of a federal court, I find the analysis in Mulholland persuasive, especially in fight of my reading of Hiscott and the plethora of case law that exists detailing the method of determining reasonable attorney’s fees. Thus, it is my opinion that restricting a discharged attorney’s quantum meruit claim where a contingent fee agreement was breached to the number of hours worked multiplied by the hourly rate is too narrow. It is my opinion that a more reasonable approach is for the finder of fact to conduct a case-by-case analysis utilizing the equities of that case to determine the reasonable value of services rendered by an attorney.
¶ 9 Moreover, there are many other occasions where courts are called upon to decide the reasonable value of an attorney’s services where the court enlists a case-by-case analysis to evaluate the equities of the case’s circumstance. See In re Estate of Brockerman, 332 Pa.Super. 88, 480 A.2d 1199 (1984) (factors to be considered in calculating fees of estate’s attorney’s quantum meruit claim are size of estate, novelty and difficulty of questions involved, the extent of counsel’s labor on the case and the time the labor required). See Gilmore v. Dondero, 399 Pa.Super. 599, 582 A.2d 1106 (1990) (reducing attorney’s contingency fee in minor’s personal injury case from one-third to one-quarter). The reasonableness of attorney’s fees has been limited in certain contexts by way of statute, although ultimately decided by a fact-finder. See Eugenie v. Workmen’s Compensation Appeal Board (Sheltered Employment Service), 140 Pa.Cmwlth. 51, 592 A.2d 358 (1991) (attorney’s fees against employer for unreasonable contests is limited to “reasonable sum”, 77 P.S. § 996. In determining reasonable fee, referee may take into account any fee agreement, legislative declaration of reasonableness, the difficulty of work performed by the attorney and other factors.) In awarding attorney’s fees in class actions, Pa.R.C.P. 1716 directs the court to consider, among other things, (1) the time and effort reasonably expended by the attorney in the litigation; (2) the quality of the services rendered; (3) the results achieved and benefits conferred upon the class or upon *962the public; (4) the magnitude, complexity and uniqueness of the litigation; and (5) whether the receipt of the fee was contingent on success. Pa.R.C.P. 1716.
¶ 10 Since a quantum meruit action sounds in equity, fairness should prevail. While the remedy in some cases may properly be determined by multiplying the hourly rate by the number of hours worked, other cases may warrant a more comprehensive, fact-specific approach. In fact, in cases where a contingent fee agreement was entered into and then breached, the exact number of hours devoted by the dismissed attorney may not be readily available. Indeed, the trial court found this very dilemma in the case sub judice since it made a credibility determination that Mr. Salmanson had not recorded time spent on the case while still ML & W’s employee.20
¶ 11 The case sub judice presents only one example of a problem in calculating a quantum meruit claim based on hours and hourly rate. Other possibilities for inequitable results are endless. For example, attorneys may be reluctant to take cases on a contingency basis, thereby preventing indigent persons from access to the legal system. Or, clauses may be added to contingent fee agreements that require the client to pay an exorbitant hourly rate if representation is terminated. What happens if the client is not awarded anything? Under the terms of the original contingent fee agreement, the predecessor attorney would receive nothing; however, under the Majority’s theory a quantum meruit claim would nonetheless result in the client owing the attornéy for the hours devoted to the case. Another example might be when a litigation savvy client discharges his attorney just before a settlement is reached, knowing that the hourly rate bill would be lower than the contingency fee, and then either settles the case pro se or hires a subsequent attorney solely to settle the case, paying a hourly wage or a significantly reduced contingent fee. By giving the trial court discretion to consider the equities of the particular ease before it, many such problems may be avoided and fairness can prevail.
¶ 12 The trial court concluded ML & W should be compensated by using the same fee agreement that Mr. Salmanson negotiated for himself in his own fee agreement with the client: the greater of either the regular hourly rate for all time expended or a pro rata share of calculations, total hours worked which included hours that [Mr.] Salmanson had already worked. Trial Court Opinion, 11/08/00, at 3. Since this determination is inconsistent with what I view as the law on computing a quantum meruit claim, I, like the Majority, would also reverse and remand for the trial court to recompute the quantum me-ruit claim. However, I would direct the trial court to utilize those factors as set forth, supra, to determine the reasonable value of services that ML & W is entitled to.

. Emphasis was added to highlight the difference between the relative value of services performed, which calls for a comparison, and the reasonable value of services performed, as in quantum meruit.

. This legal conclusion was made in error since the law is settled that a quantum meruit action against a former client accrues as of the date of the termination of representation for the reasonable value of services rendered. Kenis v. Perini Corp., 452 Pa.Super. 634, 682 A.2d 845 (1996); Fowkes v. Shoemaker, 443 Pa.Super. 343, 661 A.2d 877 (1995).

. Of course, just because a case does not exist to directly support a contention does not make it meritless. For example, an issue of first impression does not have case law to support it.

. Mulholland. was decided on June 11, 1993, eleven days prior to the filing of Hiscott, which was filed on June 22, 1993.

. The trial court disbelieved Mr. Salman-son’s testimony regarding the number of hours he spent on the case and his explanation of why he had not recorded some of the time, finding his testimony to be incredible. Trial Court Opinion, 11/08/00, at 5. Because there is evidence of record that Mr. Salman-son did work without recording it, I, unlike the Majority, would not disturb this credibility determination made by the finder of fact.