John Harris P.C. v. Tobin ( 2020 )

18‐3652‐cv (L)
John Harris P.C. v. Tobin, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 18th day of March , two thousand twenty.
PRESENT: REENA RAGGI,
DENNY CHIN,
RICHARD J. SULLIVAN,
Circuit Judges.
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JOHN HARRIS P.C.,
Plaintiff‐Appellant‐Cross‐Appellee,
‐v‐ 18‐3652‐cv (Lead)
18‐3683‐cv (XAP)
GERALD J. TOBIN, aka GERALD J. TOBIN, P.A.,
HELENE TOBIN, aka HELENE K. TOBIN, aka
HELENE P. TOBIN, GERALD J. TOBIN, P.A.,
Defendants‐Appellees‐Cross‐Appellants.
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FOR PLAINTIFF‐APPELLANT‐ JOHN HARRIS, John Harris P.C.,
CROSS‐APPELLEE: New York, New York.
FOR DEFENDANTS‐APPELLEES‐ ROBERT D. GOLDSTEIN (John William
CROSS‐APPELLANTS: Cook, on the brief), Epstein Becker &
Green, P.C., New York, New York.
Cross‐appeals from the United States District Court for the Southern
District of New York (Koeltl, J.).
UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Plaintiff‐appellant‐cross‐appellee John Harris P.C. (ʺHarris P.C.ʺ), a New
York law firm whose principal is John Harris (ʺHarrisʺ), appeals from a judgment
entered by the district court on November 8, 2018, following a one‐day bench trial,
ordering defendant‐appellee‐cross‐appellant Gerald Tobin to pay Harris P.C. $117,000
in legal fees, plus pre‐judgment interest in the amount of $24,925.81.1 On appeal, Harris
P.C. principally contests the amount of the fees awarded by the district court, arguing,
inter alia, that it should have applied a higher per‐hour fee and should not have reduced
the number of hours that Harris P.C. billed the Tobins. Harris P.C. also challenges the
district courtʹs November 16, 2017 order, issued from the bench, dismissing all claims
against Tobin P.A., dismissing all claims except the claim for quantum meruit against
1 Gerald Tobin is the only defendant listed on the judgment entered by the district court,
even though Helene Tobin (together with Gerald Tobin, the ʺTobinsʺ) and Gerald J. Tobin, P.A.
(ʺTobin P.A.ʺ) were named in the complaint and are defendants‐appellees‐cross‐appellants here.
As part of its appeal, Harris P.C. argues that the judgment should be amended to add Helene
Tobin and Tobin P.A. We address this concern, infra.
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the Tobins, and granting the Tobinsʹ motion in limine. The Tobins have cross‐appealed,
arguing that the district court should have limited Harris P.C.ʹs recovery to $100,000.
We assume the partiesʹ familiarity with the underlying facts, the procedural history of
the case, and the issues on appeal.
FACTUAL BACKGROUND
Harris began representing the Tobins in a commercial property dispute in
2006, while he was employed by Epstein Becker & Green, P.C. (ʺEpsteinʺ), the law firm
representing the Tobins in this appeal. Harrisʹs employment with Epstein ended in
2009, and he started his own law firm, Harris P.C. On May 5, 2009, Harris P.C. was
substituted as the Tobinsʹ counsel in the commercial property dispute, and, on June 3,
2009, Harris P.C. faxed a letter titled ʺRetainer Agreement and Terms of Engagementʺ
(the ʺLetterʺ) as well as a statement of client rights and bill to the Tobins.2 The Letter
specified, inter alia, that: (1) absent an amendment to the Letter, Harris P.C. only
represented the Tobins in the matters referenced in the Letter; (2) the billing rate started
at $275 per hour but could ʺincrease from time to time,ʺ Appʹx at 178; (3) any bill
estimates would be ʺinexactʺ and not binding, Appʹx at 178; (4) bills ‐‐ which would
usually be sent out each month ‐‐ would be due within 10 days and begin accruing
2 This fax was addressed to Gerald Tobin, but it was intended for the Tobins. Because
there is no dispute that Harris P.C. represented Gerald and Helene Tobin in the underlying
matters, we will refer to all correspondence as sent to (or by) the Tobins, even if a particular fax
or letter was only addressed to (or sent by) Gerald Tobin.
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interest if they were unpaid for 30 days; and (5) the retainer agreement ʺwill take effect
when you execute and return this [document].ʺ Appʹx at 179. The Tobins never signed
the Letter, but they paid the initial invoice in full.
Harris P.C. represented the Tobins for the next seven years in three
lawsuits until it moved to be relieved in June 2016. Throughout the period of its
attorney‐client relationship with the Tobins, Harris P.C. billed the Tobins sporadically
and belatedly at the $275 per hour rate, at one point allowing more than three years to
pass between invoices. The Tobins, for their part, often made incomplete payments
when billed and usually carried a balance. By June 2016, the Tobins had outstanding
invoices totaling more than $26,000 and owed ʺprobably about $100Kʺ in total,
according to Harris P.C. Appʹx at 215. Harris P.C. stopped performing legal work for
the Tobins in mid‐June 2016, and it moved to be relieved as the Tobinsʹ counsel on June
20, 2016. This request was granted on June 29, 2016.
Between June 10, 2016 and July 13, 2016, Harris P.C. sent the Tobins
twelve invoices totaling $153,434.21 for legal services rendered from 2012 to 2016. The
first eight invoices reflected a billing rate of $275 per hour, which charged the Tobins for
work done before January 2015. The last four invoices, which were sent between July 6,
2016 and July 13, 2016 ‐‐ after Harris P.C. was relieved as counsel ‐‐ reflected a billing
rate of $350 per hour.
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PROCEDURAL HISTORY
Harris P.C. sued the Tobins and Tobin P.A. on July 14, 2016, and filed an
amended complaint on December 16, 2016, seeking more than $200,000 in legal fees and
asserting, inter alia, claims for breach of contract, unjust enrichment, and quantum
meruit. On May 26, 2017, the Tobins moved for partial summary judgment on all
claims against Tobin P.A. and partial summary judgment on all remaining claims
against the Tobins other than the quantum meruit claim. They also filed a motion in
limine to preclude Harris P.C. from introducing evidence that it was entitled to more
than $275 per hour. After oral argument on November 16, 2017, the district court
granted both of the Tobinsʹ motions from the bench. The court conducted a one‐day
bench trial on May 1, 2018 on the remaining quantum meruit claim against the Tobins.
On November 8, 2018, the district court issued written findings of fact and conclusions
of law, and it entered judgment in favor of Harris P.C. for $141,925.81, representing the
legal fees plus prejudgment interest. This appeal followed.
DISCUSSION
A. Summary Judgment
ʺWe review de novo the district courtʹs grant of a motion for partial
summary judgment.ʺ Ehrlich v. Am. Airlines, Inc., 360 F.3d 366, 370 (2d Cir. 2004).
Summary judgment is appropriate if there is no genuine issue of material fact, and, in
making that determination on review, ʺthe court must view the evidence in the record
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in the light most favorable to the non‐moving party, drawing all reasonable inferences
in that partyʹs favor.ʺ Am. Home Assurance Co. v. Hapag Lloyd Container Linie, GmbH, 446
F.3d 313, 315 (2d Cir. 2006).
The district court did not err in dismissing all claims against Tobin P.A.
and all claims against the Tobins except for the quantum meruit claim. As to Tobin
P.A., Harris P.C. did not put forth any evidence that it performed any legal work for
that entity, and the Letter provided that Harris P.C. would be representing the Tobins
without mentioning Tobin P.A. Because a party cannot defeat a motion for summary
judgment with mere ʺconclusory allegations or unsubstantiated speculation,ʺ Robinson
v. Concentra Health Servs., Inc., 781 F.3d 42, 44 (2d Cir. 2015), the district court did not err
in dismissing Tobin P.A. as a defendant.
As to the claims against the Tobins, the district court found that even
assuming the Letter created an enforceable contract that the Tobins breached, ʺthe
plaintiffʹs only remedy for recovering the hourly fees it claims the defendants owe is an
action for quantum meruit.ʺ Suppl. Appʹx at 55. We agree. It is undisputed that Harris
P.C. withdrew from representing the Tobins before the matter was completed, and
therefore once Harris P.C. withdrew, its legal recourse was limited to recovery in
quantum meruit. See In re Ehmer, 708 N.Y.S.2d 436, 437 (2d Depʹt 2000). Thus, the
district court did not err.
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B. Motion in Limine
ʺWe review a district courtʹs evidentiary rulings for abuse of discretion,
and will reverse only if we find that there was a violation of a substantial right.ʺ United
States v. Bah, 574 F.3d 106, 116 (2d Cir. 2009). ʺWe reverse a district courtʹs evidentiary
rulings only if we find manifest error, that is not harmless.ʺ United States v. Lange, 834
F.3d 58, 79 (2d Cir. 2016) (internal quotation marks omitted). The moving party has the
burden of proving that ʺit is likely that in some material respect the factfinderʹs
judgment was swayed by the error.ʺ SR Intʹl Bus. Ins. Co. v. World Trade Ctr. Properties,
LLC, 467 F.3d 107, 119 (2d Cir. 2006).
Before trial, the district court ruled that Harris P.C. could not introduce
evidence that it was entitled to an hourly rate higher than the rate it set out in the Letter
and charged the Tobins in the invoices it billed before it withdrew as counsel. Despite
this ruling, at trial the court nevertheless allowed Harris to discuss the higher rate he
previously billed the Tobins while he worked at Epstein as well as the higher rate he
billed his other clients who retained Harris P.C. Ultimately, however, the district court
found that Harris P.C. was not entitled to a rate higher than the rate it repeatedly billed
the Tobins over the course of more than six years. Any error that the district court
arguably made when it granted the Tobinsʹ motion in limine was rendered harmless
when the court admitted and considered evidence of the higher billing rates.
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Accordingly, the district courtʹs in limine rule provides no basis for vacating the
judgment.
C. Legal Fees
When an attorney withdraws from a case for cause, he is entitled to
recover legal fees in quantum meruit, which is the fair and reasonable value of the
completed services. See Ehmer, 708 N.Y.S.2d at 437; Kahn v. Kahn, 588 N.Y.S.2d 658, 659
(2d Depʹt 1992); Spano v. Scott, 561 N.Y.S.2d 678, 678 (4th Depʹt 1990). To determine the
appropriate quantum meruit award, courts consider, among other things, ʺthe time
and skill required in that case, the complexity of the matter, the attorneyʹs experience,
ability, and reputation, the clientʹs benefit from the services, and the fee usually charged
by other attorneys for similar services.ʺ DeGregorio v. Bender, 860 N.Y.S.2d 193, 194 (2d
Depʹt 2008). An attorney is entitled to prejudgment interest when he recovers in
quantum meruit. Ogletree, Deakins, Nash, Smoak & Stewart, P.C. v. Albany Steel, Inc., 663
N.Y.S.2d 313, 315 (3d Depʹt 1997).3 ʺ[P]rejudgment interest [must] be computed from
the earliest ascertainable date on which the prevailing partyʹs cause of action existed.ʺ
3 Neither this Court nor the New York Court of Appeals has addressed whether an award
of prejudgment interest is mandatory upon recovery in quantum meruit, and the intermediate
state courts disagree on that point. Compare Precision Founds. v. Ives, 772 N.Y.S.2d 116, 120 (3d
Depʹt 2004) (determining that prejudgment interest is ʺdiscretionary for a quantum meruit
claimʺ), with Ash & Miller v. Freedman, 495 N.Y.S.2d 183, 183 (1st Depʹt 1985) (ʺ[A]n award of
interest would be mandated in an action by an attorney to recover under a retainer agreement
or in quantum meruit for the reasonable value of the legal services rendered.ʺ). Because the
parties do not dispute that Harris P.C. is entitled to prejudgment interest, and only dispute the
date from which that interest runs, we need not resolve this question.
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Id. at 315‐16 (citing N.Y. CPLR 5001(b)). We review questions of fact for clear error,
questions of law de novo, and matters of discretion for abuse of discretion. Pierce v.
Underwood, 487 U.S. 552, 558 (1988).
Here, the district court applied the hourly rate that Harris P.C. charged
the Tobins in its invoices for more than six years of their attorney‐client relationship and
declined to apply the higher rate that Harris P.C. retroactively charged the Tobins after
their relationship soured and Harris was relieved as counsel. We find no error in the
courtʹs determination. Indeed, courts have long recognized that where a client has not
discharged an attorney and the attorney has previously billed the client for the services
at issue, the attorney may not later recover at a higher hourly rate in quantum meruit.
See Mar Oil, S.A. v. Morrissey, 982 F.2d 830, 843 (2d Cir. 1993); Finkelstein v. Kins, 511
N.Y.S.2d 285, 288 (1st Depʹt 1987). Therefore, the district court properly held Harris
P.C. to the $275 per hour rate at which it had billed the Tobins. Moreover, we find no
error with the courtʹs decision to reduce Harris P.C.ʹs hours by twenty percent due to its
extraneous work. We have upheld similar reductions in the past, see McDonald ex rel.
Prendergast v. Pension Plan of the NYSA‐ILA Pension Tr. Fund, 450 F.3d 91, 96‐97 (2d Cir.
2006) (affirming 35% fee reduction), and the reduction applied here was appropriate.
Likewise, we also find no error in the district courtʹs award of
prejudgment interest from the date Harris P.C. sent the invoices, as that was when the
amounts owed were ascertainable and demanded. Ogletree, 663 N.Y.S.2d at 315‐16.
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Finally, the Tobinsʹ cross‐appeal argument that the legal fees awarded
should be limited to $100,000 is without merit. It is clear from the record that Harris
P.C.ʹs stated figure of $100,000 was merely an estimate, which the Tobins have
acknowledged was an ʺapproximat[ion].ʺ Appelleeʹs Br. at 55. Although the Tobins
contend this is evidence that Harris P.C. inflated its bills, the district court properly
addressed this concern by reducing the invoices by twenty percent. Accordingly, the
Tobinsʹ cross‐appeal is denied.
D. Deficient Judgment
Gerald Tobin is the only defendant listed on the district courtʹs judgment.
Because, as noted above, Tobin P.A. was properly dismissed from this action, any
argument that Tobin P.A. should be named in the judgment is moot. Although it is true
that Helene Tobin was omitted from the judgment, the proper mechanism for resolving
this apparent clerical error is via Federal Rule of Civil Procedure 60(a). The issue has
not been raised with the district court, and should Harris P.C. wish to press the issue it
may seek relief under Rule 60 with that court.
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We have considered Harris P.C.ʹs remaining arguments and conclude they
are without merit. For the foregoing reasons, we AFFIRM the judgment of the district
court.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
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