CV000598528S
SUPERIOR COURT OF CONNECTICUT, JUDICIAL DISTRICT OF HARTFORD AT HARTFORD
2003 Conn. Super. LEXIS 3610
December 30, 2003, Decided
January 2, 2004, Filed
MEMORANDUM OF DECISION
The plaintiff Brown & Welsh n1 is a law firm which for many years represented the defendant hospital and its predecessors in collections matters. In May 1998, the hospital discharged the firm and requested return of files, including those currently pending in various stages of the proceedings. The firm did return the files. No agreement was reached as to how or, it seems, whether to compensate the firm for work done in the returned files. The firm brought this action to recover attorney fees. The waters are muddied somewhat by the nature of collections work: typically, collections practices involve large numbers of relatively low value cases, the recovery rate can be low and piecemeal, and the time gap from judgment to recovery can be extended. Specific problems arising in this case and their resolutions will be discussed in context.
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n1 The firm has undergone a number of permutations over the years.
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As suggested above, the firm handled at least some of the collections work of the defendant and its predecessor hospitals for decades. In early 1998, a purported class action, Rivera v. Veterans Memorial Medical Center, was filed against the hospital. This action claimed that the hospital was improperly pursuing collections actions against a class of claimants in workers’ compensation cases. See, e.g., Rivera v. Veterans Memorial Medical Center, 1998 Ct.Sup. 9108 (decision regarding certifying a class); Rivera v. Veterans Memorial Medical Center, 262 Conn. 730, 818 A.2d 731 (2003) (decision reversing subsequent dismissal of the class). The plaintiff firm has been impleaded into the Rivera action by the hospital for indemnification. There has been, so far as I am aware, no resolution on the merits regarding the Rivera claims.
Concerned about the pending class action, the hospital and its attorneys met with Thomas Welsh, a principal in the plaintiff firm. On May 1, 1998, the hospital, through outside counsel, prepared and sent a letter to the firm terminating the firm’s services. The letter requested return of the files and offered reasonable compensation for the work involved in returning the files. Within a month the firm returned 2,188 files in various stages of litigation, including, presumably, some not yet in litigation and a number of post-judgment files. The firm also forwarded to the hospital or to successor counsel checks which it continued to receive from time to time, and the firm made some overtures to arrange for the payment of its expenses in forwarding the files and for its attorney fees it claimed in regard to the forwarded files. There was virtually no response to the firm’s overtures. The hospital ultimately forwarded to successor collections counsel, David Fordiani, approximately two thirds of the files which had been returned to it by the plaintiff firm. Fordiani has proceeded with collection work in many, but by no means all, of the files. The bank, in responses to requests for information in the discovery process, indicated that it has recovered, as of the time discovery was answered, approximately $410,000 in the returned files. n2
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n2 The hospital had a policy of not foreclosing judgment liens on real estate; rather, the hospital waits to satisfy its judgment until a transfer of the property occurs.
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The complaint comprises two counts. The first count alleges a breach of contract, the second alleges quantum meruit. Although there are splits among jurisdictions around the country; see, e.g., Annot., 23 A.L.R.5th 241; Connecticut has adopted the rule that where a client discharges an attorney, the latter may recover only in quantum meruit. Cole v. Myers, 128 Conn. 223, 21 A.2d 396 (1941). Principles of quantum meruit limit the attorney’s recovery in a pending contingency matter to the reasonable value of the services provided by the attorney prior to the discharge. Id.
Both parties appear to agree that principles of quantum meruit apply; they differ markedly as to what amount of recovery thus results. Some brief introductory comments as to what principles I did not apply might be in order. First, the defendant stressed that the plaintiff firm was dismissed for cause, because of the Rivera litigation. There is, as the plaintiff points out, no pleading to that effect. Perhaps equally importantly, there was no evidence presented at trial to provide any substance to the claim. The plaintiffs’ allegations in Rivera are reasonably discernable, as is the hospital’s concern. There was no evidence presented, however, as to what the plaintiff firm did improperly in the handling of any of the hospital’s litigation. Finally, the hospital appears to take the position in its arguments that quantum meruit is the proper method of recovery: if the plaintiff firm had breached its duty, there may well be no recovery. For these reasons, then, I do not believe that the defendant’s assertion that the dismissal was “for cause” matters to the outcome.
Second, the plaintiff firm has introduced a mass of statistics regarding the files that it once possessed which were then turned over to the defendant; it also presented a rather detailed statistical analysis of fees for the past several years in the body of work for the hospital. I will analyze some of these statistics to arrive at what I believe to be a reasonable approximation of the value of services rendered. I am not considering as the measure of damages the actual fees generated by the bulk of files, however, because there is no recovery for the contract price. Third, the defendant hospital makes much of the lack of evidence as to value provided to any particular file. No individual files were offered into evidence; indeed, the actual files had been returned and, as noted above, many of the files were subsequently distributed to the successor attorney. The plaintiff firm, in turn, claims that it was hobbled, in a way, by the failure of the hospital to comply with discovery requests regarding the files. n3 I recognize that in most sorts of litigation one would anticipate, in an action for recovery in quantum meruit, evidence of specific work done, with standard time records, in order to determine the reasonable value of the services rendered, and indeed the task would be relatively simple, at least conceptually, were that the case here. I also recognize, however, that the circumstances are different: the evidence presented was that the firm kept time records by several broad categories of cases but not by the individual case. There was no evidence that the firm anticipated the discharge, and thus should have been on notice to prepare more detailed records. The choice, then, is whether to try to estimate, albeit imprecisely, the reasonable value of services, or to conclude that because precise records were not kept, no recovery at all is appropriate. n4
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n3 The case was presented as a hearing in damages, because of the defendant’s default for failure to comply with discovery requests. Because the case turns on the reasonable value of services rendered, rather than a liability issue, and because no other defenses are germane, the default makes little practical difference.
n4 There are two lines of considerations that might lead to the conclusion that no recovery is possible in the circumstances. One is a general proposition, not at all preposterous, that there was no specific evidence of value as to any specific file, and thus there simply is insufficient proof. I believe, however, that there is some evidence of value provided to a group of cases.
A second set of considerations appears in cases involving attorneys fees which may be awarded in actions such as civil rights claims and in other claims where, typically, individual claimants may be seen to act as “private attorneys general” in the enforcement of values deemed important by the legislature. Some, but not all, jurisdictions require specific, contemporaneous time-keeping records in order to recover attorneys fees in these circumstances. See, e.g., New York Association for Retarded Children v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983); but see Ackerman v. Western Electric Co., Inc., 643 F. Supp. 836 (N.D. Cal. 1986); see generally Annot., 56 A.L.R.5th 1.
I believe that the considerations are considerably different in such categories of cases, for a variety of reasons, including the stark fact that those attorneys fees are sought to be awarded against strangers to the attorney-client relationship.
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In the circumstances, the statistics provided by the plaintiff firm, the accuracy of which statistics are not specifically challenged, provide some evidence, though general, of the quantity of unreimbursed services provided. Some inferences have to be made, both from the statistical evidence presented and from evidence about the nature of the firm’s collections work for the hospital. Exhibit 6 provides summaries, compiled from massive time records contemporaneously kept by category of case, of time spent in the categories of the hospital’s work from 1993 until approximately mid-May 1998, when the firm learned that its services were terminated. For the 1998 calendar year, it had expended 879.85 hours at an average rate of $81.40, for a total value of services rendered to files, irrespective of contract amount, of $71,619.75. I find that that value is not disproportionate to the factors traditionally considered in cases such as Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974). n5 In light of the lag time between the performance of work and actual recovery, I find that a six-month lag time is conservative: that is, there are probably more otherwise uncompensated hours of work performed on files older than six months than compensated hours performed on files newer than six months. Nonetheless, because the plaintiff did not produce evidence of specific work performed in specific files, it is appropriate to take a conservative approach and I rather broadly conclude that it is fair to consider six months as the cutoff. If services valued at $71,619.75 were performed in four and a half months, then the average monthly value was $15,915.50, and the six-month value would be $95,493.00. I find the amount of $95,493, then, to be the value of uncompensated services provided by the plaintiff law firm.
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n5 Johnson is generally cited as the seminal case discussing attorney fees in civil rights sorts of cases. The general rule is to compute the “lodestar” number by multiplying hours times hourly rate, then considering adjusting for factors such as difficulty, loss of other employment, contingency fee arrangement, and such. The plaintiff has candidly stated that most of the Johnson factors do not compel an upward adjustment of the lodestar, and the statistical hourly rate is low enough that I do not consider a downward adjustment appropriate. I have considered, however, the issue of the Johnson adjustments.
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The final issue is whether the plaintiff firm ought to be paid for its services in organizing and “boxing up” the files for transmission. Evidence was presented regarding the time and expense involved. The defendant has argued that, although the hospital agreed to pay for a reasonable cost, the amount claimed is not reasonable. The hospital also claims that the complaint does not include this allegation.
It is correct that there is no such allegation in the complaint, so I can make no award for this item. I strongly suggest to the parties that they resolve the issue among themselves, as it ought not to be difficult. Otherwise, judgment may enter for the plaintiff in the amount of $95,493.00; additional claims are denied.
Beach, J.