Law Firm of Michael A. Demayo, LLP v. Schwaba Law Firm
Docket: No. COA16-899
Court: Court of Appeals of North Carolina; April 4, 2017; North Carolina; State Appellate Court
Michael A. DeMayo's Law Firm appeals a trial court order from April 7, 2016, which awarded $1 in attorneys' fees from Schwaba Law Firm for services rendered to a client, Joshua W. Beaver. Beaver was injured in a taxi accident on December 22, 2011, and sought legal representation from Plaintiff, agreeing to a fee of one-third of any settlement and a 95% fee responsibility if he terminated the contract after a settlement offer. After Plaintiff worked on the case from December 2011 to June 2013 without precise time records, Beaver rejected an $85,000 settlement offer in June 2013 and terminated his contract with Plaintiff in July 2013, later hiring Defendant. Defendant secured a $100,000 settlement in March 2014. Plaintiff claimed fees based on the prior settlement offer, but Defendant refused payment. Plaintiff filed a complaint for quantum meruit on April 13, 2015. After a bench trial, the court awarded only $1 to Plaintiff, leading to the appeal. The appellate court affirmed the trial court's decision, highlighting that quantum meruit allows recovery for the reasonable value of services to prevent unjust enrichment, particularly when a contingency fee arrangement is involved.
An attorney may recover fees from a subsequent counsel if the entire contingent fee was received by that counsel from a former client. In deciding on attorneys' fees based on quantum meruit, trial courts should evaluate various factors, including the percentage agreement, case complexity, time spent, monetary stakes, achieved results, and customary local charges. Courts may also consider the novelty and difficulty of legal questions, adequacy of representation, challenges faced by the attorney, and the nature of the case. Additionally, the trial court can review services rendered by paralegals if deemed reasonable. The determination of reasonable attorney fees is the trial court's responsibility and is subject to an abuse of discretion standard on appeal. In the case at hand, the trial court awarded the plaintiff only one dollar, citing several findings: the fee agreement was 33% of the recovery, the litigation was personal injury but not particularly difficult, no evidence of time spent or customary hourly rates was provided, the plaintiff’s representation was adequate, and the defendant secured a better settlement for the client. The court concluded that while the plaintiff provided services that benefited the defendant, it failed to establish a recoverable amount. Consequently, the trial court ordered the defendant to pay the plaintiff one dollar.
Plaintiff's argument centers on the trial court's calculation of fees under quantum meruit. However, Plaintiff does not challenge the articulation of factors from the precedent case, Guess, nor does it contest any specific factual findings as lacking evidentiary support. Instead, Plaintiff claims the trial court overlooked competent evidence that could substantiate a value for its services based on a contingency fee percentage. Without specific challenges to the trial court's findings, those findings are upheld on appeal, as established in Koufman v. Koufman. Particularly, Plaintiff did not contest Finding of Fact No. 38, where the trial court indicated that Plaintiff failed to provide a basis for determining an award amount under quantum meruit. Given that the trial court properly evaluated the claim and Plaintiff's lack of specific challenges, the court's decision to award only one dollar is affirmed. The trial court's order from April 7, 2016, is upheld.
