Robertson v. Steris Corp.

NO. COA13-1301
NORTH CAROLINA COURT OF APPEALS
Filed: 1 July 2014
TERRI LYNN ROBERTSON and MARY
DIANNE DANIEL,
Plaintiffs,
v. Brunswick County
No. 07 CVS 106
STERIS CORPORATION, a Delaware
Corporation, et al.,
Defendants.
Appeal by Plaintiffs from order entered 7 February 2013 by
Judge D. Jack Hooks, Jr., in Brunswick County Superior Court.
Heard in the Court of Appeals 9 April 2014.
The Lorant Law Firm, by D. Bree Lorant, and Womble,
Carlyle, Sandridge & Rice, LLP, by Burley B. Mitchell, Jr.,
and Robert T. Numbers, II, for Plaintiffs.
No brief for Defendants.
Young Moore and Henderson P.A., by Walter E. Brock, Jr.,
and Andrew P. Flynt, for Intervenors G. Henry Temple, Jr.,
and Temple Law Firm, PLLC.
STEPHENS, Judge.
Procedural History and Factual Background
In 2004, Plaintiffs Terri Lynn Robertson and Mary Dianne
Daniel were allegedly injured by the release of toxic liquids
and gases from a sterilization machine while they were at work
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at Brunswick County Hospital. On 19 January 2007, G. Henry
Temple, Jr., of the Temple Law Firm, PLLC, filed a complaint in
Brunswick County Superior Court on behalf of Plaintiffs seeking
damages for personal injuries against various defendants (“the
underlying lawsuit”). No written contract regarding legal
representation was executed between Temple and Plaintiffs.
Plaintiffs asserted that Temple never discussed his contingency
fee rate with them and Temple himself could not recall doing so,
but Travis Harper, an attorney working for the Temple Law Firm,
testified that Temple did tell Plaintiffs that “their individual
recoveries would be after costs and attorney fees[.]” Temple
did explain that, if he lost the case, he would pay all costs of
the litigation. The underlying lawsuit was designated as
exceptional by the Chief Justice pursuant to Rule 2.1 of the
General Rules of Practice for the Superior and District Courts,
and the Honorable D. Jack Hooks, Jr., was appointed as presiding
judge.
When Plaintiffs first approached Temple in November 2006,
Temple had concerns about the viability of their claims. He was
particularly concerned that the statute of repose for product
liability claims would operate to bar the lawsuit. Two other
attorneys had already declined to take case, and Temple told
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Plaintiffs he would need to investigate before making a
decision. As the case proceeded, it proved even more complex
and problematic than Temple had anticipated. Early on, Judge
Hooks ruled that all product liability claims were barred by the
applicable statute of repose, and Temple shifted his theory of
the case to an attempt to prove inadequate maintenance of the
sterilization machine. By the time of the first round of
mediation in May 2010, the costs that Temple had incurred in
pursuit of the lawsuit were approximately $150,000, but
Plaintiffs were offered only $270,000 total to settle.
Plaintiffs did receive workers’ compensation benefits and
settlements of several hundred thousand dollars each for their
workers’ compensation claims. During pendency of the
litigation, claims against all defendants except Steris
Corporation and Seal Master Corporation1 were dismissed. Trial
1
Seal Master produced the seals used by Steris in the
manufacture of the sterilization machine which allegedly
malfunctioned. The complaint in the underlying lawsuit refers
to Seal Master as “Seal Master Corporation, aka Sealmaster,
Inc.” Some documents in the record on appeal, including the
order appealed from, refer to this defendant as “Sealmaster.”
The company’s website indicates that its proper name is “Seal
Master Corporation,” and we use that spelling here. See Seal
Master Corporation, http://www.sealmaster.com/ (last visited 18
June 2014).
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was set for 14 March 2011, and a second round of mediation was
ordered for 2 March 2011.
Temple’s research with two mock juries indicated that
Plaintiffs would likely lose the case based on problems with
Plaintiffs’ credibility and other issues. Consultants working
with Temple urged him to settle, and Temple reached a
confidential settlement with Seal Master before mediation.
During mediation, Temple also reached a confidential settlement
with Steris for an amount the consultants considered
surprisingly high. However, a dispute arose between Plaintiffs
and Temple regarding Temple’s fees and costs. Temple sought 40%
of Plaintiffs’ recovery after costs, and Plaintiffs felt that
percentage was too high. Plaintiffs signed releases of their
claims as to Steris and Seal Master, but due to the fee dispute,
Plaintiffs refused to authorize Temple to deliver the signed
releases or dismiss the underlying lawsuit. Plaintiffs
terminated their relationship with Temple and retained attorney
D. Bree Lorant in early September 2011.
The fee dispute and termination of his services led Temple
to file motions in the underlying lawsuit to intervene and to
recover attorneys’ fees and costs on 5 October 2011. On 11
October 2011, Judge Hooks entered an “Order and Notice of
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Hearing” stating, inter alia, that claims by Plaintiffs against
Steris and Seal Master had “been announced as settled, but ha[d]
not been dismissed as a number of issues ha[d] arisen beyond the
matters” in the underlying lawsuit. The order specifically
referenced the dispute regarding Temple’s fees. On 26 October
2011, Plaintiffs agreed to dismiss the underlying lawsuit with
prejudice. On 1 November 2011, a consent order was entered to
allow dismissal of all claims against the remaining defendants
as “a full and final settlement of the causes of action” had
been reached in the underlying lawsuit.2 However, the order did
not resolve the fee dispute between Temple and Plaintiffs, and
Temple’s motions in the cause and to intervene remained pending.
On 20 August 2012, Plaintiffs moved to dismiss the matter
or, in the alternative, to stay Temple’s motions.3 On 9 and 10
2
The record on appeal includes notices of voluntary dismissal
with prejudice as to claims against Steris signed by each
plaintiff and dated 2 November 2011. Notices of voluntary
dismissal with prejudice as to Seal Master signed by each
plaintiff are also included in the record. However, although
the notices as to Seal Master are signed by Temple, they do not
bear a file stamp from the superior court.
3
On 17 August 2012, Plaintiffs filed a separate civil action in
Orange County Superior Court against Temple, asserting claims
for constructive fraud, breach of fiduciary duty, duress and
undue influence, negligent infliction of emotional distress, and
declaratory relief. That action was dismissed without prejudice
on 4 November 2013.
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October 2012, Judge Hooks, under a new commission, held a
hearing on the pending motions. By order entered 7 February
2013, Judge Hooks granted Temple’s motion to intervene, denied
Plaintiffs’ motion to dismiss or stay proceedings, and awarded
Temple reimbursement of certain costs and an attorneys’ fee of
one-third of Plaintiffs’ net recovery in the underlying lawsuit
less the amount of workers’ compensation lien and common costs
payments previously made by Temple. From that order, Plaintiffs
appeal.
Discussion
On appeal, Plaintiffs make eleven arguments: that Judge
Hooks erred in (1) hearing Temple’s claims without having
subject matter jurisdiction, (2) asserting authority over
Plaintiffs without having personal jurisdiction, (3) asserting
authority over Plaintiffs’ settlement funds without having
jurisdiction, (4) hearing and ruling on Temple’s claims which
should have been asserted in a separate action, (5) conducting a
bench trial that deprived Plaintiffs of their due process
rights, right of immediate appellate review, and a fair hearing
on the merits, (6) finding Temple to be a real party in interest
in the underlying action, (7) granting Temple’s motion to
intervene, (8) awarding Temple fees and costs in violation of
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public policy, (9) awarding Temple fees and costs in violation
of the North Carolina Rules of Professional Conduct, (10)
awarding Temple fees and costs without legal authority, and (11)
reaching conclusions of law that are not supported by the
court’s findings of fact. We affirm.
I. Jurisdiction
In Plaintiffs’ first four arguments, they contend that
Judge Hooks erred in hearing Temple’s claims without having
subject matter jurisdiction, personal jurisdiction over
Plaintiffs, or jurisdiction over Plaintiffs’ settlement funds,
and assert that Temple was required to bring his claims for
costs and fees against Plaintiffs in a separate action. Because
these arguments are related, we consider them together and
reject each contention.
Whether a trial court has subject[]matter
jurisdiction is a question of law, reviewed
de novo on appeal. Subject[]matter
jurisdiction involves the authority of a
court to adjudicate the type of controversy
presented by the action before it.
Subject[]matter jurisdiction derives from
the law that organizes a court and cannot be
conferred on a court by action of the
parties or assumed by a court except as
provided by that law. When a court decides
a matter without the court’s having
jurisdiction, then the whole proceeding is
null and void, i.e., as if it had never
happened. Thus the trial court’s
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subject[]matter jurisdiction may be
challenged at any stage of the proceedings.
McKoy v. McKoy, 202 N.C. App. 509, 511, 689 S.E.2d 590, 592
(2010) (citations and internal quotation marks omitted; italics
added).
Plaintiffs cite In re Transportation of Juveniles for the
proposition that Judge Hooks had subject matter jurisdiction
only over the issues raised in Plaintiffs’ complaint which they
contend did not include Temple’s alleged entitlement to fees for
his services. 102 N.C. App. 806, 808, 403 S.E.2d 557, 558
(1991) (“A court cannot undertake to adjudicate a controversy on
its own motion; rather, it can adjudicate a controversy only
when a party presents the controversy to it, and then, only if
it is presented in the form of a proper pleading. Thus, before
a court may act there must be some appropriate application
invoking the judicial power of the court with respect to the
matter in question.”) (citation omitted). We find that case
easily distinguishable.
There, a district court judge “entered an order [regarding
who would transport juveniles in secure custody to and from
court], ex mero motu and without an action or proceeding having
been filed.” Id. at 807, 403 S.E.2d at 558. We vacated the
order because, “without an action pending before it, the
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district court was without jurisdiction to enter an order.” Id.
at 808, 403 S.E.2d at 559. Here, in contrast, there was an
action pending before Judge Hooks, to wit, the underlying
lawsuit. As Judge Hooks noted in his order filed 7 February
2013, due to the dispute between Plaintiffs and Temple over
Temple’s costs and fees, the trial court was “unable to have
final dismissals entered” after Plaintiffs and the remaining
defendants reached a settlement. The November 2011 consent
order providing for final dismissal of all pending claims
between Plaintiffs and the remaining defendants pursuant to the
mediated settlement placed the resulting settlement funds with
the Clerk of Superior Court in Brunswick County pending
resolution of the dispute over Temple’s costs and fees.
For the same reason, we also reject Plaintiffs’ assertions
that, once they agreed to dismiss with prejudice their remaining
claims in the underlying lawsuit, (1) Judge Hooks’s “authority
over this matter came to an end and he had no ability to keep
the action alive beyond its natural life[,]” (2) Judge Hooks
lacked jurisdiction over Plaintiffs or the settlement funds, and
(3) Temple was required to bring any claims to recover his costs
and fees in a separate action. As stated above, the consent
order explicitly noted that the matter of Temple’s costs and
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fees had been raised in the underlying lawsuit and remained
pending after release of the settlement funds to the Clerk.
Further, the trial court here followed the procedures this
Court approved in a remarkably similar case, Guess v. Parrott,
160 N.C. App. 325, 585 S.E.2d 464 (2003). That appeal arose
out of a dispute between attorneys for the
firms of appellant Lloyd T. Kelso &
Associates and appellee Melrose, Seago &
Lay, P.A., as to entitlement to attorneys’
fees stemming from the underlying case. The
underlying case involved an automobile
accident . . . in which [the] plaintiff
Johnny Robert Guess, Jr., was injured when
his vehicle collided with a tractor-trailer
driven by [the] defendant Terry Anthony
Parrott.
Shortly after the accident, [the]
plaintiff’s father and brother . . .
contacted the appellee law firm of Melrose,
Seago & Lay, P.A., and made arrangements
with Randal Seago to represent [the]
plaintiff. [The] plaintiff and Randal Seago
entered into a contingency fee agreement in
which [the] plaintiff promised to pay
appellee one-third of any recovery.
Further, [the] plaintiff would reimburse
appellee for expenses and costs advanced by
it.
Mr. Seago went about the task of
representing [the] plaintiff. He filed a
complaint . . . . The parties negotiated at
mediation, . . . . [but] a settlement could
not be reached . . . . Therefore, this
matter went to trial . . . [with] a mistrial
[eventually] declared.
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Following the unsuccessful trial, Seago and
other attorneys at appellee law firm were
involved in negotiations with their client,
[the] plaintiff, and [the] defendants. . . .
[The p]laintiff became dissatisfied with the
representation provided to him by appellee
law firm and informed them of such.
Acceding to [the] plaintiff’s wishes,
appellee filed a motion to withdraw [which
was granted]. . . .
Thereafter, [the] plaintiff secured the
services of appellant Lloyd Kelso of Lloyd
T. Kelso & Associates. [The p]laintiff
entered into a contingency fee agreement
with Kelso, promising to pay 35% of the
amount recovered. . . .
The parties were ordered into mediation and
eventually settled [the] plaintiff’s case
. . . . The attorneys’ fees issue was not
resolved in mediation.
Id. at 326-27, 585 S.E.2d at 465-66. The “appellee filed a
motion [in the underlying case] requesting a portion of the
attorneys’ fees . . . .” Id. at 327, 585 S.E.2d at 466.
Following a bench trial, the trial court entered an order
awarding (1) costs to each law firm, (2) “the reasonable value
of its services in quantum meruit . . . from the contingency fee
funds generated by the successful settlement” to appellee, and
(3) “the remaining funds from the generated fee” to appellant.4
4
“[T]he theory of ‘quantum meruit,’ an equitable remedy, . . .
is defined by Black’s Law Dictionary to mean ‘as much as
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Id. at 329, 585 S.E.2d at 467 (italics added). On appeal,
appellant argued, inter alia, that appellee’s motion had failed
to state a claim upon which relief could be granted and that the
trial court erred in resolving the fee dispute via a bench trial
rather than before a jury. Id.This Court held that “a claim by an attorney who has
provided legal service pursuant to a contingency fee agreement
and then [been] fired has a viable claim in North Carolina in
quantum meruit against the former client or its subsequent
representative” and that the filing of a motion in the
underlying action, as Temple did here, was a proper procedure
for asserting such a claim. Id. at 331, 585 S.E.2d at 468(italics added). We further concluded that
[t]he apportionment of attorneys’ fees among
the various lawyers who have represented a
party has not been regulated by statute and
is therefore within the province of the
trial court. Accordingly, appellant had no
right to have the reasonable value of
appellee’s services determined by a jury, as
this issue is committed to the sound
discretion of the trial court.
deserved.’” Id. at 332, 585 S.E.2d at 469 (italics added).
“Quantum meruit is a measure of recovery for the reasonable
value of services rendered in order to prevent unjust
enrichment.” Paul L. Whitfield, P.A. v. Gilchrist, 348 N.C. 39,
42, 497 S.E.2d 412, 414 (1998).
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Id. at 334, 585 S.E.2d at 470. Indeed, the Guess court observed
that the trial judge in the underlying matter is “in the best
position to make the determination of ability and skill of the
parties, as well as to the difficulty of the case.” Id. at 337,
585 S.E.2d at 472.
We see no meaningful distinction between the circumstances
in Guess and those presented here.5 As in Guess, the dismissed
attorney filed a motion in the underlying action seeking to
recover fees in quantum meruit, and the trial court conducted a
5
We are not persuaded by Plaintiffs’ suggestion that the holding
in Guess does not apply here because Plaintiffs had not entered
into a written contract for Temple’s legal services. It is
well-established that “recovery in quantum meruit is appropriate
only where an implied contract exists, and that, where an
express contract concerning the same subject matter is found, no
contract will be implied.” Carolantic Realty, Inc. v. Matco
Group, Inc., 151 N.C. App. 464, 471, 566 S.E.2d 134, 139 (2002)
(citation and internal quotation marks omitted). Here, it was
the very lack of a written agreement which led to the dispute
over Temple’s fees, leaving Plaintiffs and Temple with nothing
but an implied contract regarding his entitlement to a
percentage of Plaintiffs’ recovery. Temple’s representation of
Plaintiffs having been terminated prior to finalization of the
settlement of the underlying lawsuit, even had there existed a
valid written contingency fee contract between Temple and
Plaintiffs, Temple could not have collected his contractual fee
under it. Rather, he would have had to proceed in quantum
meruit, exactly as he did here. See Guess, 160 N.C. App. at
332-33, 585 S.E.2d at 469 (“Under current North Carolina law, .
. . an attorney, working pursuant to a contingency fee contract,
who is discharged without cause by his or her client, is
entitled to recover the reasonable value of his or her services
[in quantum meruit].”).
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bench trial to resolve the dispute. Accordingly, we overrule
Plaintiffs’ arguments regarding Judge Hooks’s jurisdiction over
the issue of Temple’s fees, over Plaintiffs, and over the
settlement funds, and we reaffirm that an attorney may properly
bring a claim for fees in quantum meruit against a former client
by the filing of a motion in the underlying action to be
resolved by the trial court via a bench trial.
II. Intervention
Plaintiffs also argue that the trial court erred in various
ways in its handling of Temple’s motion to intervene: that (1)
the trial court was required to rule on the motion to intervene
before reaching the merits of the fee dispute, (2) the motion to
intervene was untimely because it was not heard until five and
one-half years after the filing of the complaint, and (3) Temple
was not entitled to intervene as a matter of right.
As discussed supra, nothing in Guess indicates that a
motion to intervene was filed by the appellee in that case;
rather, this Court made clear that a dismissed attorney seeking
legal representation costs and fees, like Temple, could pursue
his claims against his former clients, like Plaintiffs, by the
filing of a motion in the cause. See id. at 331, 585 S.E.2d at
468. Accordingly, both the motion to intervene and the
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allowance of that motion in the 7 February 2013 order were
wholly unnecessary to permit Judge Hooks to reach and resolve
the merits of Temple’s motion in the cause. Thus, even assuming
arguendo that Judge Hooks did err in ruling on the motion to
intervene, any such error would be of no consequence to his
resolution of the fee dispute in his 7 February 2013 order.
Accordingly, we need not consider Plaintiffs’ arguments
regarding the motion to intervene.
III. Public Policy
Plaintiffs also argue that the award of fees and costs to
Temple was contrary to public policy in that the award was in
violation of Rule 1.5(c) of the North Carolina Rules of
Professional Conduct (“the Rules”), which provides that “[a]
contingent fee agreement shall be in a writing signed by the
client and shall state the method by which the fee is to be
determined, including the percentage or percentages that shall
accrue to the lawyer . . . .” Revised Rules of Professional
Conduct of the North Carolina State Bar, Rule 1.5(c) (2012). We
are not persuaded.
The “breach of a provision of the [Rules] is not in and of
itself . . . a basis for civil liability.” Baars v. Campbell
Univ., Inc., 148 N.C. App. 408, 421, 558 S.E.2d 871, 879 (2002)
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(citations and internal quotation marks omitted). However,
Plaintiffs contend that, because the Rules are adopted by our
Supreme Court, Beard v. The North Carolina State Bar, 320 N.C.
126, 129-30, 357 S.E.2d 694, 696-97 (1987), they constitute a
statement of public policy. In turn, Plaintiffs contend that to
award Temple costs and fees in quantum meruit violates the
public policy requiring that contingency fees be in writing as
stated in Rule 1.5(c). See, e.g., Cansler v. Penland, 125 N.C.
578, 579-80, 34 S.E. 683, 683-84 (1899) (holding that a contract
which violates public policy is void and unenforceable).
However, the plain language of the Rules makes clear that
the
[v]iolation of a Rule should not give rise
itself to a cause of action against a lawyer
nor should it create any presumption in such
a case that a legal duty has been breached.
In addition, violation of a Rule does not
necessarily warrant any other
nondisciplinary remedy . . . . The [R]ules
are designed to provide guidance to lawyers
and to provide a structure for regulating
conduct through disciplinary agencies. They
are not designed to be a basis for civil
liability. Furthermore, the purpose of the
Rules can be subverted when they are invoked
by [the] opposing parties as procedural
weapons. . . . Accordingly, nothing in the
Rules should be deemed to augment any
substantive legal duty of lawyers or the
extra-disciplinary consequences of violating
such a Rule.
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Revised Rules of Professional Conduct of the North Carolina
State Bar, Rule 0.2[7] (emphasis added). Indeed, the comments
to Rule 1.5 itself explicitly provide that a trial court’s
“determination of the merit of the petition or the claim [for
attorney costs and fees] is reached by an application of law to
fact and not by the application of this Rule.” Revised Rules of
Professional Conduct of the North Carolina State Bar, Rule 1.5,
Comment 12 (emphasis added).
Plaintiffs cite several cases from this State in support of
the proposition that
there can be no recovery here on quantum
meruit or otherwise. Thompson v. Thompson,
313 N.C. 313, 314-15, 328 S.E.2d 288, 290
(1985) (if there can be no recovery on a
contract because of its repugnance to public
policy, there can be no recovery on quantum
meruit); Richardson v. Bank of Am., N.A. 182
N.C. App. 531, 563, 643 S.E.2d 410, 430
(2007) (same); In Re: Cooper, 81 N.C. App.
27, 41, 344 S.E.2d 27, 36 (1986) (same);
Townsend v. Harris, 102 N.C. App. 131, 132,
401 S.E.2d 132 (1991).
We do not find Plaintiffs’ arguments to have merit.
We note that each of the cases cited by Plaintiffs concerns
violations of public policy regarding the content of contracts
rather than their form. See Thompson, 313 N.C. at 314, 328
S.E.2d at 290 (noting in dicta that a “contingent fee contract
for legal services to be rendered in connection with matters
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arising out of the domestic difficulties between [a husband and
wife] was void and unenforceable exclusively by virtue of the
fact that it violated the public policy of this State”);
Townsend, 102 N.C. App. at 132, 401 S.E.2d at 133 (same); In Re:
Cooper, 81 N.C. App. at 29, 344 S.E.2d at 29 (“[A]lthough a
contingent-fee contract in a divorce, alimony, or child support
proceeding is void, . . . a separate contingent-fee contract in
an equitable distribution proceeding may be fully enforceable.”)
(citation omitted); Richardson, 182 N.C. App. at 563, 643 S.E.2d
at 430 (noting that “the sale of [single-premium credit
insurance] with loans greater than fifteen years [i]s void as
against public policy”).
As for Thompson, the primary case cited and relied upon by
Plaintiffs as “controlling” on the outcome of this appeal, the
only issue actually decided by our Supreme Court in that opinion
was whether an order allowing intervention can be upheld when
the underlying contract in the case has been declared void and
unenforceable:
The Court of Appeals held that the
contingent fee contract for legal services
to be rendered in connection with matters
arising out of the domestic difficulties
between Ms. Thompson and her husband was
void and unenforceable exclusively by virtue
of the fact that it violated the public
policy of this State. Review of that
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decision has not been sought and therefore
the validity of that decision is not before
us.
The opinion of the Court of Appeals on that
point is the law of this case as it now
stands before us. The contract being void,
intervenors had no interest in the property
or the transaction that was the subject of
Ms. Thompson’s suit. There was, therefore,
no basis for the order allowing
intervention. The Court of Appeals should
have, therefore, vacated the order allowing
intervention and dismissed the intervenors
from that suit. It erred in not doing so.
Although in view of our disposition of the
case a decision on the point is not
necessary, we note that it is generally held
that if there can be no recovery on an
express contract because of its repugnance
to public policy, there can be no recovery
on quantum meruit.
The opinion of the Court of Appeals
remanding the case for determination of the
reasonable value of the services rendered
prior to 16 February 1981, the date the
attorneys were discharged, is reversed. The
case is remanded to the Court of Appeals for
remand to the District Court of Henderson
County for an order vacating the order
allowing intervention and for the entry of
an order dismissing the action filed by the
intervenors against Ms. Thompson.
313 N.C. at 314-15, 328 S.E.2d at 290 (citations omitted;
emphasis added). Thus, as the Supreme Court explicitly
acknowledged, its observations regarding quantum meruit were
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purely dicta. Id. Plainly, then, Thompson is not controlling
on that point.
In the opinion of this Court which was reversed the Supreme
Court, wherein we considered as a matter of first impression
whether contingent fees in domestic cases violated public
policy, several policy considerations were cited, including “(1)
the recognition that these contracts tend to promote divorce and
(2) the lack of need for such contracts under modern domestic
relations law [which provide adequate mechanisms for recovery of
attorneys’ fees by dependent spouses].” Thompson v. Thompson,
70 N.C. App. 147, 155, 319 S.E.2d 315, 320 (1984).6 Of course,
6
In an unfortunate reflection of the paternalism of the times,
this Court also noted a third public policy which domestic
contingent fee contracts would violate:
Wives contemplating divorce are often
distraught and without experience in
negotiating contracts. Should contingent
fee contracts between them and the attorneys
they employ under such conditions become the
usual fee arrangement, charges of
overreaching and undue influence will be all
too frequent. The public, the legal
profession, and the bench would all suffer.
We believe all will benefit by maintaining
the present public policy of not enforcing
such contracts no matter how freely and
fairly entered into and how reasonable may
be the fee thereby produced. The wise
discretion of capable and experienced trial
judges (aided by the evidence placed before
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neither of these policy considerations is implicated here, and
as discussed supra, the Rules explicitly state they are not
intended to resolve disputed attorneys’ fees.
On the other hand, case law from this Court and our Supreme
Court makes clear that “an agent or attorney, [even] in the
absence of a special contract, is entitled to recover the amount
that is reasonable and customary for work of like kind,
performed under like conditions and circumstances.” Forester v.
Betts, 179 N.C. 681, 682, 103 S.E. 209, 209 (1920); see also
Williams v. Randolph, 94 N.C. App. 413, 380 S.E.2d 553 (1989)
(holding that an attorney could recover a reasonable fee even
though the attorney and client had no written or oral
contingency fee agreement). Indeed, the fact that an agreement
for legal representation was determined “to be in violation of
the Rules of Professional Conduct and unenforceable is of no
consequence” where an attorney’s right of recovery arises in
them by the parties prior to the time the
court fixes the fee to be paid by the
husband) can be relied upon to assure every
attorney an adequate fee and thus assure
every wife adequate representation.
Id. at 156, 319 S.E.2d at 321 (citation and internal quotation
marks omitted). Needless to say, the stereotypes and
assumptions which underlie this supposed justification can no
longer be considered the public policy of our State.
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quantum meruit, because the trial court’s award of fees is based
“upon the reasonable value of [the attorney’s] services” and not
upon the failed agreement. Crumley & Assocs., P.C. v. Charles
Peed & Assocs., P.A., __ N.C. App. __, __, 730 S.E.2d 763, 766
(2012). We can find no meaningful distinction between the
circumstances presented in this appeal and those in Crumley &
Assocs., P.C., a case which Plaintiffs fail to cite, let alone
distinguish.
In sum, the Rules, precedent from our Supreme Court, and
decisions by previous panels of this Court all reject the
argument made by Plaintiffs here. See In re Appeal from Civil
Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989) (“Where a
panel of the Court of Appeals has decided the same issue, albeit
in a different case, a subsequent panel of the same court is
bound by that precedent, unless it has been overturned by a
higher court.”). Accordingly, Plaintiffs’ argument is
overruled.
IV. Mathematical errors
In their final argument, Plaintiffs contend that conclusion
of law 5 of the 7 February 2013 order, stating the total amount
of Temple’s petitioned-for costs which it was disallowing, is
not supported by finding of fact 46, which describes certain
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costs charged to Temple as a sanction for his actions during
discovery. However, a careful reading of Plaintiffs’ argument
and the record before us reveals that Plaintiffs are actually
contending that the court abused its discretion in determining
the sanction to impose. We disagree.
It is well-settled that Rule 37 [of the
North Carolina Rules of Civil Procedure]
allowing the trial court to impose sanctions
is flexible, and a broad discretion must be
given to the trial judge with regard to
sanctions. Our Supreme Court has stated
that a ruling committed to a trial court’s
discretion is to be accorded great deference
and will be upset only upon a showing that
it was so arbitrary that it could not have
been the result of a reasoned decision.
Rose v. Isenhour Brick & Tile Co., 120 N.C. App. 235, 240, 461
S.E.2d 782, 786 (1995) (citations, internal quotation marks, and
some brackets omitted), affirmed, 344 N.C. 153, 472 S.E.2d 774(1996).
At the hearing on Temple’s motion in the cause, the trial
court asked Temple about an incident during discovery when
Temple failed to timely disclose a change in certain experts he
intended to call. As a result, the trial court had sanctioned
Temple by requiring that he pay the costs of deposing the newly
disclosed witnesses rather than shifting those costs to
Plaintiffs. At the motion hearing, Temple acknowledged the
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sanction, and, when the court asked Temple what the amount of
the sanction was, Temple responded, “[$]28,000.”
Later during the hearing, the following exchange occurred
between Temple and one of his attorneys:
Q[.] Now, did you undertake to prepare
separate schedules to identify those
deposition expenses that were incurred for
the deposition of the plaintiffs’ experts
that Judge Hooks ordered be borne by the
Temple Law Firm?
A[.] Yes.
. . . .
Q[.] I show you two separate exhibits, [38]
and [39]. Look at those and tell us what
those are, please.
A[.] Exhibit Number [38] lists out the
plaintiff expert deposition expenses of
fees, transcripts, and videographer
expenses. And [39] lists out their
plaintiff expert deposition travel expenses.
Q[.] Okay. So [38] includes both the
deposition testimony time as well as the
deposition transcript and video charges, is
that correct, for each of those plaintiff
experts that the Temple Law Firm was ordered
to pay for; is that correct?
A[.] Yes, that’s my understanding.
Q[.] Okay. And then Exhibit [39] represents
the travel — well, tell us what [39]
represents.
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A[.] It represents the expenses that the
experts incurred to travel to the
depositions listed on the chart.
Q[.] Okay. And so what are the total
expenses for the experts, their deposition
testimony and their transcripts and videos,
as reflected on Exhibit [38]?
A[.] $21,686.05.
Q[.] Okay. And what are the total travel
expenses incurred by those experts to give
those depositions, as reflected on Exhibit
[39]?
A[.] $6,630.75.
As Plaintiffs note, the total of the expenses listed in the two
exhibits is $28,316.80, an amount quite close to the figure
Temple himself provided in response to the court’s question
early in the hearing. However, in finding of fact 46 of the 7
February 2013 order, the trial court disallowed only a portion
of that total amount:
46. As a result of the manner in which
[P]laintiffs’ counsel disclosed and then
changed experts, the [trial c]ourt as a
sanction required the costs of deposing
newly disclosed experts (by Plaintiffs) be
paid by [P]laintiffs[’] counsel. Those
costs were as follows:
$ 750.00: Cynthia Wilhelm Deposition fee
$ 2,000.00: Ward Zimmerman Deposition fee
$ 2,800.00: Fred Hetzel Deposition fee
8/26/10
$ 2,800.00: Fred Hetzel Deposition fee
11/3[/]10
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$ 3,500.00: Fred Hetzel Deposition fee
11/9/10
$ 755.33: Ward Zimmerman Deposition related
charges[]
$ 1,364.67: Fred Hetzel deposition expenses
$ 986.41: Jim Dobbs Depo travel expenses
$ 543.84: Jim Dobbs Depo travel expenses
Total: $15,500.25
As it was always the intent of the [trial
c]ourt that counsel bear this expense, it
should not be allowed to be shifted to
[P]laintiffs.
As noted supra, “broad discretion must be given to the trial
judge with regard to sanctions” and such a determination will
not be upset absent “a showing that it was so arbitrary that it
could not have been the result of a reasoned decision.” Id.
While Temple’s testimony and exhibits 38 and 39 reflected costs
of approximately $28,000 connected with the newly disclosed
experts, the trial court itself never stated the exact amount of
the expenses it planned to shift to Temple as a sanction. After
reviewing the exhibits, the court, in its discretion, apparently
decided that only some of those costs would be borne by Temple.
Given the specificity of finding of fact 46 in breaking down and
listing the specific expenses to be included in the sanction, we
see no abuse of the trial court’s discretion. We explicitly
reject Plaintiffs’ assertion that the trial court was required
to provide an “explanation as to why the additional $12,816.55
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[was] not included.” Finding of fact 46 contains an entirely
sufficient explanation of the court’s decision to sanction
Temple. This argument is overruled.
The 7 February 2013 order is
AFFIRMED.
Judges ERVIN and MCCULLOUGH concur.