Court Opinion

ID: 4368789
Source: CourtListenerOpinion
Date Created: 2019-02-18 13:04:28.000446+00
Date Added: 2024-06-11T14:23:40.582792
License: Public Domain

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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.