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Skepnek v. Roper & Twardowsky, LLC

United States District Court, D. Kansas

September 8, 2017

WILLIAM J. SKEPNEK and STEVEN M. SMOOT, Plaintiffs,
v.
ROPER & TWARDOWSKY, LLC, Defendant.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree United States District Judge

         This action arose from a fee dispute between plaintiffs, attorneys William Skepnek and Steven Smoot, and defendant, a law firm named Roper & Twardowsky, LLC. Following a jury verdict in plaintiffs' favor, defendant moved for judgment as a matter of law or, alternatively, for a new trial or remittitur. Doc. 372. In its Memorandum supporting that motion, defendant asserts separate arguments supporting each outcome. Doc. 373. This order rules on all those arguments in the order they are presented, and for reasons explained below, denies defendant's motion.

         I. Motion for Judgment as a Matter of Law

         Defendant asserts it is entitled to judgment as a matter of law because plaintiffs failed to provide evidence about the number of hours they worked or their hourly rates; plaintiffs failed to provide expert testimony about the quality of their services and failed to show that their efforts contributed to the advancement of the case; and Mr. Smoot did not testify. Doc. 373 at 1. None of these arguments supports judgment in defendant's favor as a matter of law.

         A. Legal Standard

         If a court does not grant a motion for judgment as a matter of law under Rule 50(a), the movant may file a renewed motion for judgment as a matter of law. Fed.R.Civ.P. 50(b). The Tenth Circuit has instructed district courts to grant renewed motions for judgment as a matter of law “cautiously and sparingly.” Zuchel v. City & Cty. of Denver, 997 F.2d 730, 734 (10th Cir. 1993). “Movants are entitled to judgment as a matter of law only if all of the evidence, viewed in the light most favorable to the nonmoving party, reveals no legally sufficient evidentiary basis to find for the nonmoving party.” Weichert v. E-Fin. Call Ctr. Support, No. CV 13-2493-KHV, 2016 WL 1273922, at *2 (D. Kan. Mar. 30, 2016); see also Burrell v. Armijo, 603 F.3d 825, 832 (10th Cir. 2010). “Judgment as a matter of law is appropriate only if the evidence points but one way and is susceptible to no reasonable inferences to support the nonmoving party.” Weichert, 2016 WL 1273922, at *2; see also Baty v. Willamette Indus., Inc., 172 F.3d 1232, 1241 (10th Cir. 1999), overruled on other grounds by Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002); Riggs v. Scrivner, Inc., 927 F.2d 1146, 1149 (10th Cir.), cert. denied, 502 U.S. 867 (1991). “Such judgment is proper only when ‘the evidence so strongly supports an issue that reasonable minds could not differ.'” Weichert, 2016 WL 1273922, at *2 (quoting Ryder v. City of Topeka, 814 F.2d 1412, 1418 (10th Cir. 1987)). “In determining whether to grant judgment as a matter of law, the Court may not weigh the evidence, consider the credibility of witnesses or substitute its judgment for that of the jury.” Id.; see also Lucas v. Dover Corp., 857 F.2d 1397, 1400 (10th Cir. 1988). “Nevertheless, the Court must find more than a mere scintilla of evidence favoring the nonmovant; the Court must find that ‘evidence was before the jury upon which it could properly find against the movant.'” Weichert, 2016 WL 1273922, at *2 (quoting Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1547 (10th Cir. 1988)).

         B. Time and Hourly Rate

         Defendant first contends that it is entitled to judgment as a matter of law because plaintiffs failed to provide evidence showing the number of hours they worked or their hourly rates. Doc. 373 at 9-11. Defendant contends, “New Jersey law makes clear that when an attorney does not cede a substantially prepared case, did not originate the case, or had not obtained a settlement offer that the lawyer's standard hourly rate is the most that can be recovered.” Doc. 373 at 9.

         This argument, in large measure, reprises a theory that the court rejected long ago. See Doc. 293 at 35 (Memorandum and Order of July 23, 2015 denying summary judgment against plaintiffs' quantum meruit claim and rejecting defendant's argument that “the court must grant summary judgment unless plaintiffs present evidence of the hours they spent representing each Prudential client.”). As the court explained at summary judgment, “time [spent] is not the only factor to be used in ascertaining a reasonable fee. . . .” Id. (citing Buckelew v. Grossbard, 461 A.2d 590, 592 ( N.J.Super. Ct. Law Div. 1983), aff'd 469 A.2d 518 ( N.J.Super.Ct.App.Div. 1983). The court again rejects defendant's characterization of New Jersey law governing quantum meruit principles, as applied to attorney fee disputes.

         “The proper measure of compensation under quantum meruit is ‘as much as is deserved.'” Bruno v. Gale, Wentworth & Dillon Realty, 852 A.2d 198, 201 ( N.J.Super.Ct.App.Div. 2004). Quantum meruit is an equitable remedy[1] so a “mere listing of hours expended is insufficient” because it may lead to an inequitable result. Id. “The crucial factor in determining the amount of recovery is the contribution which the lawyer made to advanc[e] the client's cause.” Id.; see also Glick v. Barclays DeZoete Wedd, Inc., 692 A.2d 1004, 1010 ( N.J.Super.Ct.App.Div. 1997); Dinter v. Sears, Roebuck & Co., 651 A.2d 1033, 1038 ( N.J.Super.Ct.App.Div. 1995), cert. denied, 658 A.2d 728 (N.J. 1995); La Mantia v. Durst, 561 A.2d 275, 277 ( N.J.Super.Ct.App.Div. 1989), cert. denied, 570 A.2d 950 (N.J. 1989); Anderson v. Conley, 501 A.2d 1057, 1067 ( N.J.Super. Ct. Law Div. 1985); Buckelew, 461 A.2d at 591-92.

         Both defendant and plaintiffs cite La Mantia v. Durst as authority favoring them. Doc. 373 at 9; Doc. 405 at 3. In La Mantia, the New Jersey Superior Court observed “that when dealing with an equitable determination such as quantum meruit, hard and fast rules are difficult to apply, let alone construct.” 561 A.2d at 277. But, the New Jersey courts developed guidelines that this court found useful to its analysis of the quantum meruit claim asserted here. Id. at 278. These guidelines identify the following seven factors: the length of time invested by the claimant compared to the entire time expended; the quality of representation; the result of each attorney's efforts; the reason the client changed attorneys; the viability of the claim at transfer; the amount of recovery realized; and any pre-existing partnership agreements between the attorneys who now compete for a percentage of the contingency fee. Id. Although not all the factors apply to this dispute, they provide a clear message for the defendant's argument. Under New Jersey law, an hourly rate-based calculation alone is inadequate. In fact, the New Jersey courts have found that applying a purely hourly calculation was reversible error. Id.

         Fifteen years after the La Mantia court collected these seven factors, the New Jersey Superior Court affirmed its confidence in them in Bruno v. Gale, Wentworth & Dillon Realty. 852 A.2d at 201 (“Trial courts should consider the length of time each of the firms spent on the case relative to the total amount of time expended to conclude the client's case. The quality of that representation is also relevant. . . . Viability of the claim at transfer also bears upon the value of a former firm's contribution . . . The amount of the recovery realized in the underlying lawsuit also impacts upon the quantum meruit valuation.” (quoting La Mantia, 561 A.2d at 278 (other citations omitted))).

         Defendant directs the analysis to two more cases that purportedly require plaintiffs, as a condition to quantum meruit recovery, to reconstruct time records and produce those records in discovery, or testify about them to the jury. Doc. 373 at 11; Doc. 408 at 5-6 (first citing Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 796 A.2d 238 (N.J. 2002); then citing Szcepanski v. Newcomb Med. Ctr., Inc., 661 A.2d 1232 (N.J. 1995)). But, defendant's cases are not on point. Neither one deals with a quantum meruit fee dispute between attorneys. And while both cases reach tangentially-related issues, [2] La Mantia and Bruno consider the same setting presented in this case-a quantum meruit fee dispute between counsel sharing a common client. For this reason, the court concludes that the La Mantia factors control the analysis here and considers whether the evidence will support the jury's verdict under those factors.

         First, the court considers the evidence about the length of time plaintiffs invested in the case. Defendant makes much of plaintiffs' lack of any time records, but defendant did not produce any time records either. The absence of any time records from either plaintiffs or defendant may have prevented the jury from comparing the time invested by either side to the total expended. But, the evidentiary record isn't as barren as defendant's motion suggests. The jury heard evidence estimating the time that Mr. Skepnek devoted to the case. During Mr. Skepnek's testimony, a blow-up calendar from 2002 to 2010 was marked to show dates Mr.

         Skepnek worked on the case. See Doc. 405-4 at 2. During direct examination, Mr. Skepnek methodically recounted dates that he travelled to New Jersey to work on the case. Doc. 391 at 36-96. He also provided dates when he performed other work. Although this does not strictly comply with the time records factor, the jury did not reach its verdict without any evidence of the time contributed by plaintiffs.

         The jury also heard evidence about the quality of plaintiffs' representation in the battle to keep the Prudential clients. Ex. 68; Doc. 392 at 214-17. The jury heard about a letter Mr. Skepnek drafted and defendant's employee distributed to the shared clients. In the letter, Mr. Skepnek provided the clients with reasons why they should not dismiss their claims against one of the defendants in their cases. In the client email attaching the letter, one of defendant's employees reported that Mr. Skepnek was available to speak with the clients-making him a central point of contact for the matter. This evidence allowed the jury to understand the role Mr. Skepnek had played in this critical phase of the cases. The jury also heard testimony about the results of Mr. Skepnek's efforts-it allowed plaintiffs and defendant to keep the 160 shared clients. Ex. 109; Doc. 393 at 97-101.

         The evidence included ample proof about the quality of Mr. Skepnek's representation, including his “masterpiece” and the result of those efforts (Ex. 290; Doc. 393 at 82-84). Mr. Skepnek's “masterpiece” was a 30-page analysis that he prepared and used to draft a motion for summary judgment in the underlying cases. Finally, the jury heard evidence of the fee realized from the joint representation-approximately $16.5 million. Doc. 393 at 193-96. This evidence is not the only evidence the jury heard about plaintiffs' contributions to the success of the shared representation, but they provided the jury with a significant evidentiary basis to support their verdict under the La Mantia factors.

         Although the jury did not hear an exact accounting of time and an hourly rate, it heard evidence of the factors that New Jersey law considers relevant to quantum meruit. This evidence was far more than “a mere scintilla” favoring plaintiffs.[3] In fact, plaintiffs presented evidence to the jury from which it properly could find ...


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