Geller v. Lesk (CA1 9/25/12)

The law is full of lessons that we all should have learned decades ago but that keep having to be taught because not everyone does. Today’s lesson: even contingent-fee lawyers should keep their time. But make sure to keep enough of it.

The Gellers sued for breach of contract and won summary judgment. They requested fees under 12-341.01 and the contract. Their attorney was on a 25% contingency, which would be about $175,000. They asked for that or, in the alternative, $300 per hour; their attorney hadn’t kept time records but thought he spent over 100 hours on the case.  The court awarded the contingent fee. Lesk appealed.

A contingent fee is enforced only to the extent that it is reasonable. The Gellers argued that the contract – which controls over the statute – provided for payment of all fees. The court says that that limits the court’s discretion but that the award is still for “reasonable” fees. The prevailing party need make only a prima facie showing of reasonableness but if the losing party can show that the requested fee is unreasonable then the court can reduce it.

The court concludes that the Gellers did not make a prima facie showing. “The prevailing way to show reasonableness” is with contemporaneous time records.  Apparently an after-the-fact affidavit might suffice but that from the Geller’s lawyer hurt: if $300/hr. is reasonable then $1700/hr. (the contingent fee divided by the 100 hours) isn’t.

The Gellers argued that they wouldn’t be whole if the court awarded less than the contingent fee they owe their lawyer. The court replies that they don’t owe it: “That argument ignores that even when an attorney and client have agreed to a contingency fee, the attorney has a duty to review the fee at the conclusion of the representation to ensure that it would still be reasonable.” We’re absolutely sure that their lawyer would have done that even without this prompting. Yes. Absolutely.

The Gellers did themselves no good by praying in their Complaint (as the court can’t resist pointing out in a footnote) for “reasonable attorneys fees” – almost undoubtedly boilerplate language that nobody thought about at the time. When you put boilerplate in your pleadings without thinking about it – or, as many lawyers do, without really knowing what it means or why its there – you shouldn’t complain about the result.

Six footnotes here (none of them necessary but at least most aren’t very long) and fifteen pages, which a good blue pencil would have reduced by half with marked increase in clarity.

(link to opinion)