Wolf, Rohr, Gemberling & Allen, P. A. v. Margots Kapacs ( 2016 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1849
Wolf, Rohr, Gemberling & Allen, P. A.,
Respondent,
vs.
Margots Kapacs,
Appellant.
Filed June 20, 2016
Affirmed
Hooten, Judge
Hennepin County District Court
File No. 27-CV-15-7833
Sarah B. Quigley, Quigley Law Firm, PLLC, Minneapolis, Minnesota (for respondent)
Margots Kapacs, Minneapolis, Minnesota (pro se appellant)
Considered and decided by Hooten, Presiding Judge; Worke, Judge; and Smith,
Tracy, Judge.
UNPUBLISHED OPINION
HOOTEN, Judge
In this attorney fee dispute, appellant challenges the district court’s order granting
summary judgment in favor of respondent law firm, arguing primarily that the law firm
was required to obtain his consent before providing further services once his retainer was
exhausted. We affirm.
FACTS
In July 2013, appellant Margots Kapacs retained respondent Wolf, Rohr,
Gemberling & Allen, P.A. (law firm) to represent him in marital dissolution proceedings.
Kapacs and the attorney who was to represent him signed a retainer agreement (agreement)
and, in accordance with the agreement, Kapacs paid the law firm an initial retainer of
$3,500. The agreement provided that in the event that the retainer was depleted, Kapacs
“may be notified of the need for an additional advance fee retainer.” Kapacs paid an
additional $1,200 to the law firm to be used as a retainer for the services of a financial
consultant in connection with the dissolution. As of January 2014, the law firm had
exhausted the initial retainer that Kapacs had paid. In February 2014, the law firm
submitted a bill to Kapacs that reflected services it had provided after the retainer had been
exhausted. The law firm withdrew from representing Kapacs in March 2014 as a result of
Kapacs’ failure to pay the bill. After a number of communications regarding the correction
of an error in the bill, Kapacs sent two emails to the law firm in July 2014, in which he
stated, “[The bill] is on my list to pay” and “I am accepting all [of] the bill,” with the
exception of one item that is not at issue in this appeal.
The law firm initiated an action in conciliation court to recover the amount of the
outstanding bill and obtained a judgment in the amount of $3,546.61. Kapacs appealed the
conciliation court’s judgment to district court, and the law firm moved for summary
judgment. In response to the law firm’s motion, Kapacs argued that he was not liable for
the attorney fees, alleging primarily that, after exhausting his retainer, the law firm was
required to receive his consent before providing further services. The district court granted
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summary judgment in favor of the law firm and ordered that judgment be entered in favor
of the law firm in the amount of $3,546.61 plus interests and costs. This appeal followed.
DECISION
“[Appellate courts] review a district court’s grant of summary judgment de novo to
determine whether any genuine issue of material fact exists and whether the district court
erred in applying the law.” Larson v. Nw. Mut. Life Ins. Co., 855 N.W.2d 293, 299 (Minn.
2014). To defeat summary judgment, the nonmoving party must do more than “create[] a
metaphysical doubt as to a factual issue” or “rest on mere averments.” DLH, Inc. v. Russ,
566 N.W.2d 60, 71 (Minn. 1997). We review the evidence in the light most favorable to
the party against whom summary judgment was granted. McIntosh Cty. Bank v. Dorsey &
Whitney, LLP, 745 N.W.2d 538, 545 (Minn. 2008).
Consent
Kapacs argues that the district court erred by granting summary judgment to the law
firm because the law firm was required, after exhausting the initial retainer, to obtain his
consent before providing any additional services. In connection with this argument,
Kapacs argues that the agreement is ambiguous regarding whether he would be notified
that the initial retainer had been exhausted and required to replenish it before further
services would be provided by the law firm.
“[T]he primary goal of contract interpretation is to determine and enforce the intent
of the parties.” Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320,
323 (Minn. 2003). We determine the parties’ intent from the plain language of the
instrument and will not rewrite the contract when its plain meaning is unambiguous.
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Dorsey & Whitney LLP v. Grossman, 749 N.W.2d 409, 418 (Minn. App. 2008). A contract
is ambiguous if it is “susceptible to more than one reasonable interpretation.” Caldas v.
Affordable Granite & Stone, Inc., 820 N.W.2d 826, 832 (Minn. 2012).
In granting summary judgment to the law firm, the district court stated that the
agreement did not require the law firm to notify Kapacs of the exhaustion of the retainer or
contain any language suggesting that Kapacs was required to pay an additional retainer in
order to continue receiving legal services. We agree.
Paragraph 13 of the agreement, titled “Subsequent Retainers,” provides that “[w]hen
little to no money remains credited to your account, you may be notified of the need for an
additional advance fee retainer.” The paragraph further states, “In the event your initial
retainer is depleted and we fail to request a subsequent retainer, you agree to pay the
outstanding balance on each monthly statement unless specified in a separate written
agreement.” Kapacs’ argument that the agreement is ambiguous stems primarily from the
fact that the agreement states that a client “may be notified of the need for an additional
retainer” if the initial retainer is exhausted. (Emphasis added.) While Kapacs is frustrated
by the fact that the agreement allows the law firm the option of requesting an additional
retainer, the mere fact that it is within the discretion of the law firm under the agreement
whether to request an additional retainer does not render the agreement ambiguous or
invalid.
Kapacs notes that paragraph 12 of the agreement, titled “No Client Credit,” states:
“We do not loan money or extend credit to our clients. Therefore, there must be a sufficient
balance on your retainer to cover the firm’s estimate of the costs of completing the next
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major steps in your case.” Kapacs interprets this provision as meaning that no advance
services will be provided unless a sufficient balance of the retainer remains. Kapacs’
interpretation is undermined, however, by the next sentence, which provides that “[a]ll
balances on your account are due 15 days after the date of the statement.” If Kapacs’
interpretation were correct, there would never be a need for clients to pay monthly bills for
services because there would always have to be sufficient funds remaining in the retainer
to cover the services provided by the law firm. Moreover, the sentence Kapacs relies upon
does not state that the law firm will stop providing services if there is an insufficient balance
in the retainer to cover services or indicate that the client must consent to any future
services as soon as the retainer is exhausted. Finally, the language Kapacs relies on is
qualified by the fact that it only requires a balance in the retainer sufficient to cover the
costs of the “next major steps” in the client’s case. This sentence is not sufficient to create
ambiguity regarding whether the law firm was required to get the client’s consent before
providing services after the exhaustion of the retainer.
Kapacs argues that he was assured by the attorney representing him that he would
be given a warning before the initial retainer was exhausted and given 30 days before being
required to replenish the retainer. Even if the attorney made such an oral representation,
the agreement provides that it “contains the entire agreement between [Kapacs] and [the
law firm] regarding this matter and the fees, charges and expenses to be paid relative
thereto.” The agreement further provides that it was not to be modified “except by written
agreement signed by [Kapacs] and a representative of the firm.” Because Kapacs provides
no evidence that he and a representative of the law firm signed a document altering the
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terms of the agreement as he claimed, his argument about the attorney’s alleged oral
representation is without merit.
Breach of the Agreement
Kapacs argues that the district court erred by granting summary judgment in favor
of the law firm because the law firm breached the agreement. “The elements of a breach
of contract claim are (1) formation of a contract, (2) performance by plaintiff of any
conditions precedent to his right to demand performance by the defendant, and (3) breach
of the contract by defendant.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848
N.W.2d 539, 543 (Minn. 2014) (quotation omitted).
Kapacs first asserts that the law firm breached the agreement by not providing notice
that he needed to replenish the retainer before rendering further services and by providing
no opportunity for him to consent before the services were rendered. As discussed above,
however, the agreement unambiguously states that the law firm “may” request an
additional retainer after the initial retainer is exhausted and that if the law firm does not
request an additional retainer, the client agrees to pay the outstanding balance on the
monthly statements. As such, the law firm did not breach the agreement by not requesting
an additional retainer upon the exhaustion of the initial retainer and continuing to provide
legal services.
Next, Kapacs argues that the law firm breached the agreement by “failing to provide
the correct and complete invoices for more than [six] months.” This argument refers to the
fact that the law firm mistakenly billed Kapacs twice for the fee paid to retain the financial
consultant. Though Kapacs claims that it took more than six months to correct the bill, this
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assertion is not supported by the record, which indicates that the law firm was made aware
of the error in late March 2014 and corrected it by May 9, 2014. Moreover, Kapacs fails
to put forth any facts or law indicating that this billing error, which was corrected less than
a month and a half after it was discovered, amounts to a breach of the agreement.
Poor Representation
Kapacs argues that he was poorly represented by the law firm in the dissolution
proceedings and received little benefit from its services. Kapacs argues that the law firm
represented him poorly because he was not able to see his children as much as he wished
during the proceedings, the law firm did not adequately defend the attacks of his wife’s
counsel, and the law firm did not inform him about meetings and deadlines. The only
evidence Kapacs points to in support of these allegations is one email exchange between
Kapacs and the law firm regarding his thoughts on parenting time, but this evidence does
not indicate that the law firm’s representation was inadequate.1 Furthermore, Kapacs fails
to point out any evidence showing that the allegedly flawed representation of the law firm
led to any of the unfavorable outcomes he experienced during the dissolution proceedings.
As Kapacs has failed to do more than “rest on mere averments,” DLH, 566 N.W.2d at 71,
the law firm’s allegedly deficient performance is not a reason to conclude that the district
court erred in granting summary judgment.
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Kapacs also points to two other emails included in his brief’s addendum where he
expresses his dissatisfaction with the parenting time arrangements to the law firm.
However, as these emails were not part of the district court record, we will not consider
them on appeal. Minn. R. Civ. App. P. 110.01 (“The documents filed in the trial court, the
exhibits, and the transcript of the proceedings, if any, shall constitute the record on appeal
in all cases.”).
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Due Process Rights
Kapacs argues that the district court violated his constitutional due process rights
because he was provided no opportunity to be heard or to contest statements made by the
law firm. After the law firm moved for summary judgment, Kapacs filed a responsive
memorandum with the district court. Pursuant to Minn. R. Gen. Pract. 115.03, the law firm
filed a reply memorandum and a supplemental reply memorandum. Kapacs argues that he
was denied his due process rights because he was denied his right to respond to the law
firm’s reply memoranda. Minn. R. Gen. Pract. 115.03 does not, however, provide that a
nonmoving party must be allowed the opportunity to respond to the moving party’s reply
memoranda. Kapacs essentially argues that a party’s due process rights are violated if a
party is not always granted the opportunity to respond to the opposing party’s argument,
despite the fact that such a premise would result in a never-ending circle of responsive
memoranda. Because there is no requirement that Kapacs be allowed to respond to the law
firm’s reply memoranda, the district court did not violate Kapacs’ due process rights.
Professional Responsibility
Kapacs argues that the law firm failed to uphold “the requirements of professional
responsibility.” Because Kapacs failed to raise this argument to the district court, we will
not consider it. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (“A reviewing court
must generally consider only those issues that the record shows were presented and
considered by the trial court in deciding the matter before it.” (quotation omitted)).
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Breach of Good Faith
Kapacs argues that the law firm forfeited its right to compensation by breaching its
duty of good faith. Kapacs’ contention that the law firm did not act in good faith is
premised on his argument that the law firm was required to receive his consent before
rendering any further legal services once the retainer was exhausted. As discussed above,
however, the agreement did not require that Kapacs consent before the law firm provide
further legal services. We conclude that this argument is without merit.
Unreasonable Legal Fees
Kapacs argues that the district court erred in granting summary judgment to the law
firm because the legal fees he incurred were unreasonable or out of proportion to the legal
services he received. The law firm provided Kapacs with itemized bills detailing the
services it provided to him, and Kapacs does not argue that the law firm did not provide
these services or that such services were unnecessary for his representation. Additionally,
Kapacs does not argue that the law firm charged unreasonable hourly fees. Rather, Kapacs
argues that it is unreasonable for him to have to pay more than $8,000 when the law firm
only “attended one 30 min[ute] initial hearing at [f]amily court, had a 2.5 [hour] meeting
with the [child] custody evaluators at city hall and did some correspondence.”
The itemized bills demonstrate, however, that in its representation of Kapacs the
law firm drafted numerous documents, prepared for hearings, communicated extensively
with opposing counsel and the district court, and appeared on Kapacs’ behalf at the initial
case management conference and the financial early neutral evaluation. Additionally,
paragraph 10 of the agreement requires that Kapacs contact the law firm within 30 days of
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receipt of a bill regarding any complaints regarding the charges on his statement and that
failure to do so would result in Kapacs’ agreement that he owe the amounts reflected in the
statement. Despite this requirement, Kapacs never objected to the bill and in fact admitted
in his July 2014 emails that he was accepting all of the bill and that the bill was on his list
to pay. Moreover, a party must do more than “rest on mere averments” to defeat a motion
for summary judgment, DLH, 566 N.W.2d at 71, but Kapacs merely alleges that the fees
are unreasonable without providing further argument or evidence. Because Kapacs has
failed to establish that a genuine issue of material fact exists or that the district court erred
in applying the law, we conclude that the district court properly granted summary judgment
in favor of the law firm.
Arguments in Reply Brief
While Kapacs raises new arguments in his reply brief, a reply brief “must be
confined to new matter raised in the brief of the respondent.” Minn. R. Civ. App. P. 128.02,
subd. 4. “If an argument is raised in a reply brief but not raised in an appellant’s main
brief, and it exceeds the scope of the respondent’s brief, it is not properly before this court
and may be stricken from the reply brief.” Wood v. Diamonds Sports Bar & Grill, Inc.,
654 N.W.2d 704, 707 (Minn. App. 2002), review denied (Minn. Feb. 26, 2003). Because
the arguments were not presented in Kapacs’ principal brief, we will not consider them.
Affirmed.
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