Norman Yatooma & Associates v. Diperna ( 2012 )

FILED
United States Court of Appeals
Tenth Circuit
August 8, 2012
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
JONATHAN DIPERNA,
Plaintiff-Appellee/
Cross-Appellant,
v.
ICON HEALTH AND FITNESS,
INC., a Utah corporation;
FREEMOTION FITNESS, a Utah
Nos. 11-4093 and 11-4104
corporation,
(D.C. No. 1:07-CV-00136-BSJ)
(D. Utah)
Defendants,
------------------------------
NORMAN YATOOMA &
ASSOCIATES, P.C.,
Interested Party -
Appellant/Cross-Appellee.
ORDER AND JUDGMENT *
Before LUCERO, McKAY, and GORSUCH, Circuit Judges.
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
The parties are painfully familiar with the twists and turns of this lengthy
litigation, so we will cut to the chase. This is a fee dispute. Norman Yatooma &
Associates, P.C. (NYA) wants fees from a settlement its former client, Jonathan
Diperna, achieved using new lawyers after NYA withdrew from his case. Mr.
Diperna and his new lawyers (who will have to share their fee if NYA receives
anything) say NYA deserves nothing. For its part, the district court granted NYA
$45,000, a paltry sum in NYA’s view and far too much in Mr. Diperna’s.
Before we can get to the merits, though, Mr. Diperna says we should
dismiss this appeal. We should, in his view, because after the district court issued
its judgment he sent NYA a check for the full amount together with a letter saying
the check was tendered “in full settlement.” NYA deposited the check, though
admittedly into a separate trust account and all the while reaffirming its intent to
appeal. All the same, Mr. Diperna insists, NYA took the money and that’s
enough to preclude NYA’s appeal if we apply Michigan state law to this diversity
suit.
In reply, NYA relies almost entirely on Klein v. Grynberg, 44 F.3d 1497(10th Cir. 1995). Klein holds that “[i]n a diversity case, the appealability of a
judgment is governed by federal law.” Id. at 1502 n.2. Klein then proceeds to
add that, under federal law, the “[a]cceptance of payment of an unsatisfactory
judgment does not, standing alone, amount to an accord and satisfaction
precluding an appeal.” Id. at 1502. Instead, Klein teaches, “[i]t is the mutual
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manifestation of an intention to bring the litigation to a definite conclusion upon a
basis acceptable to all parties which bars a subsequent appeal.” Id. (internal
quotation marks omitted). And NYA insists any such mutual manifestation is
lacking in this case because even as it accepted the $45,000 check it made plain
its belief that the amount was inadequate.
In the teeth of all this, Mr. Diperna fails to address Klein’s holdings or its
application to his case. In fact, he does not even cite Klein in his submissions to
this court, though it is obviously relevant and heavily relied on by his opponent.
Instead, Mr. Diperna seeks to direct our attention elsewhere.
First, he points us to Evans v. Stearns-Roger Manufacturing Company, 253
F.2d 383, 385 (10th Cir. 1958). But that case never purported to address — one
way or the other — whether federal or state legal principles of accord and
satisfaction govern the appealability of diversity cases like this one, let alone
what the content of a federal rule might be. Evans, thus, simply bears no
relevance to the question we face today. See Harper v. Va. Dep’t of Taxation,
509 U.S. 86, 118 (1993) (noting “longstanding rule” that prior decisions not
squarely addressing the issue at hand may not be taken “as a binding precedent on
th[e] point”) (quotation omitted) (alteration in original).
Second and somewhat more promisingly, Mr. Diperna turns our attention to
Valley Asphalt, Inc. v. Stimpel Wiebelhaus Associates, 3 F. App’x 838 (10th Cir.
2001). Valley Asphalt is a post-Klein decision suggesting that, even under federal
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law, mutual intent to end the litigation often can and should be inferred from the
acceptance of a check tendered “in full settlement.” See id. at 840. According to
Valley Asphalt, the “retention of a check offered as payment in full constitutes
assent to the accord and satisfaction even if the recipient of the check notifies the
sender it is accepted only as partial payment.” Id. This opinion, however, is
unpublished. And while it might be entirely correct and capable of being
harmonized with Klein, it does not discuss Klein’s holding and Mr. Diperna
himself makes no effort of his own to stitch the two holdings together or offer a
way to distinguish one from the other.
This is fatal to his motion to dismiss. By failing to mention, let alone
analyze, our controlling precedent in Klein, Mr. Diperna has surely waived any
possible prevailing argument through or around it that he might have. This is not
to say such an argument does not exist. By way of example, Klein tells us to look
for a “mutual manifestation of intent” to settle. And it might be the case that, at
least sometimes, the act of accepting payment is itself sufficient to manifest an
intent to settle even when the plaintiff claims to reserve his appellate rights, just
as Valley Asphalt suggests. Indeed, this line of thought has a long pedigree in the
common law and it’s unclear whether Klein meant to displace it entirely. Id; 13
Sarah H. Jenkins, Corbin on Contracts § 70.2(3) (rev. ed. 2003). Still, whether
and how Klein and Valley Asphalt might marry in this way or some other are
questions for another day because Mr. Diperna makes no effort to address them
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today. For now, we need only say something simpler: that it is not the job of the
court to identify for a litigant controlling circuit precedent and pilot for him a
path through its shoals; a litigant’s failure to take up that task for itself is enough
to end the inquiry. See Hardeman v. City of Albuquerque, 377 F.3d 1106, 1122
(10th Cir. 2004) (insufficiently developed issues are deemed waived).
But to say we will hear this appeal is not to say we can decide it. Mr.
Diperna complains the $45,000 the district court awarded is too high. NYA
complains it is too low. Our problem is we cannot tell.
Of course, we approach a district court’s award of attorney’s fees
deferentially, and will reverse only if we discern an “abuse of discretion.”
Browder v. City of Moab, 427 F.3d 717, 719 (10th Cir. 2005). And to find an
abuse of discretion we must find the district court’s decision falls “beyond the
bounds of rationally available choices [before the district court] given the facts
and the applicable law in the case at hand.” Madron v. Astrue, 646 F.3d 1255,
1257 (10th Cir. 2011) (quotation omitted) (alteration omitted).
But to make any assessment, to be able to say the district court abused its
discretion or got it just right, we must first have some sense of why the district
court did what it did. We need “a concise but clear explanation of its reasons for
the fee award,” one that affords us an “adequate basis” for assessing whether or
not an abuse of discretion took place. Case v. Unified Sch. Dist. No. 233,
Johnson Cnty., Kan., 157 F.3d 1243, 1249 (10th Cir. 1998) (quotations omitted).
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In this case, we lack that “adequate basis.” After hearing argument from
both sides, the district court said simply, “NYA did not engage in behavior that
bars its recovery of attorney[’]s fees on a quantum meruit basis. . . . Based on the
value of services rendered and costs expended, $45,000 is a reasonable fee.”
Order Regarding Claim of Lien at 2. Without more to go on, without some
insight into how the district court resolved the parties’ many and conflicting
arguments for more or less money, we are simply unable to pass on the
reasonableness of the district court’s judgment.
Now, we hardly mean to suggest the district court must render a tome of
laborious length and flush with footnotes to avoid the possibility of a remand.
We do not require punctiliousness for punctiliousness’s sake. Often the record
will be clear enough that we can fairly trace the district court’s path even if its
opinion fails to give exacting point-by-point directions of the route it followed.
Neither, to be sure, is there a geometric formula or rigid rule available here.
What matters instead is whether, in each and every case that comes before us, we
can fairly say we have enough information to be able to discharge faithfully our
legally assigned duty of review. See generally N.M. Citizens for Clean Air &
Water v. Espanola Mercantile Co., Inc., 72 F.3d 830, 834 (10th Cir. 1996)
(district courts must “sufficiently articulate specific reasons for fee awards to give
us an adequate basis for review”) (quotation omitted).
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The nature of our difficulty in this case, why we lack sufficient confidence
in our ability to render judgment here, can be illustrated by a couple examples.
First, we are asked to pass on whether, under Michigan law (the parties
agree that Michigan substantive law applies here), $45,000 represents a
reasonable award in quantum meruit (“what one has earned”) for NYA’s
contribution to Mr. Diperna’s case. Yet, the record before us does not disclose
what success Mr. Diperna’s case ultimately achieved. And it is difficult (if not
always impossible) to assess the value a lawyer added to a contingency case
without knowing what value the client obtained. Or at least without knowing why
the district court thought the value obtained didn’t matter. See, e.g., Reynolds v.
Polen, 564 N.W.2d 467, 472 (Mich. Ct. App. 1997) (listing quantum meruit
factors, including “the amount in question and the results achieved”).
Second, it isn’t clear what NYA’s contribution to the cause was — or if,
indeed, it was anything at all. Mr. Diperna says NYA unethically abandoned his
case at a dark moment in the litigation when things looked truly bleak. He insists
that NYA’s litigation tactics drove his case to this dark place. He argues the
success he ultimately achieved is thanks entirely to his new lawyers and their
extensive retooling of his suit’s legal theory. And he submits that, while on the
job, NYA engaged in an array of utterly unethical conduct. For its part, NYA
staunchly defends its conduct and insists it ethically and reasonably incurred
billable time much greater than $45,000 in representing Mr. Diperna.
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Who’s right and who’s not in describing the past matters a great deal now.
Did NYA abandon its client? Did it engage in unprofessional conduct? Or did
NYA faithfully represent Mr. Diperna and add substantial value to his case? If
NYA’s version of events is correct, maybe it earned the money the court awarded
or more. But if its conduct was closer to what Mr. Diperna describes, it may be
that any award here would be inappropriate as a matter of law. See Reynolds, 564
N.W.2d at 470 (“[Q]uantum meruit recovery of attorney[’s] fees is barred when
an attorney engages in misconduct that results in representation that falls below
the standard required of an attorney.”). Without some better understanding of
what actually happened, we are stuck, unable to say whether the district court’s
award was a permissible one. Neither, of course, is this court the place to try to
sort through the parties’ hotly contested versions of past events. See Pullman-
Standard v. Swint, 456 U.S. 273, 291 (1982) (factfinding generally belongs to
“district courts, rather than appellate courts”) (quotation omitted).
For all these reasons, the motion to dismiss is denied and the matter
remanded for further proceedings consistent with this order and judgment.
ENTERED FOR THE COURT
Neil M. Gorsuch
Circuit Judge
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