This summary also appears under Contracts
Issues: Attorney fees; "Account stated" claim; "Mutual assent"; Fisher Sand & Gravel Co. v. Neal A. Sweebe, Inc.; White v. Campbell; Corey v. Jaroch; Breach of contract claim; Miller-Davis Co. v. Ahrens Constr., Inc. (On Remand); Kloian v. Domino's Pizza LLC; Claim that the fee arrangement described in the Engagement Agreement did not apply because plaintiff was not a party to the arrangement; Abandonment of issue; Blackburne & Brown Mtg. Co. v. Ziomek;Whether the parties orally modified their arrangement; Waiver of claim; MCR 2.111(F)(3); Attorney Gen. ex rel Dep't of Envtl. Quality v. Bulk Petroleum Corp.; Quality Prods. & Concepts Co. v. Nagel Precision, Inc.; The parol evidence rule; UAW-GM Human Res. Ctr. v. KSL Recreation Corp.; "Conversion"; Foremost Ins. Co. v. Allstate Ins Co.; Citizens Ins. Co. of Am. v. Delcamp Truck Ctr., Inc.; Claim that plaintiff's attorney charging lien on the funds defendant received from the proceeds of the sale and his refusal to surrender the funds constituted actionable conversion; Miller v. Detroit Auto Inter-Ins. Exch.; George v. Sandor M. Gelman, PC
Court: Michigan Court of Appeals (Unpublished)
Case Name: Dunn v. Bennett
e-Journal Number: 55897
Judge(s): Per Curiam – Fort Hood, Saad, and Borrello
The court held, among other things, that where no genuine issue of material fact existed as to the plaintiff-attorney's account stated claim, the trial court did not err in granting him summary disposition. Defendant engaged the services of plaintiff to represent him in actions that were brought against defendant by the IRS. Plaintiff represented defendant for over two years in a federal suit to remove a Notice of Federal Tax Lien, ultimately reaching a settlement under which the property was sold. In keeping with the settlement agreement, the IRS collected $25,110.77 from the proceeds of the sale and defendant received $40,110.77. During the course of the litigation, he paid approximately $20,000 for plaintiff's legal services, but refused payment of the remaining balance, an amount totaling $116,361.21. Plaintiff submitted documentary evidence establishing that he represented defendant for over 2 years, during which time he sent defendant 33 statements detailing current monthly charges and a cumulative balance. The last statement, dated 9/24/11, showed an amount due of $116,361.21. Plaintiff averred in an affidavit that defendant "never once objected to my statements" and in fact made payments on his account during the course of his representation. He accompanied his affidavit of account "with copies of the billing statements he sent to defendant, showing new charges, cumulative balances, and payments received from defendant." Defendant argued that a genuine issue of material fact existed as to the question of mutual assent to the debt. The court held that he did not contradict the essential facts underlying plaintiff's account stated claim. "Rather than submit documentary evidence contradicting the material elements of plaintiff's claim," the main thrust of his argument appeared to be that no objection was necessary under the circumstances presented as he described them in his affidavit. The court concluded that defendant was correct that "when silence forms the basis for inferring assent to a sum owed, the circumstances involved must support an inference of assent." However, even viewing his affidavit in a light most favorable to defendant, he failed to "depict circumstances that would excuse his failure to object to plaintiff's repeated billings." On the contrary, he admitted to signing an agreement to engage plaintiff's services for a fee, he never objected to the bills received, and actually sent payments to plaintiff. Also, even if the "circumstances" as he described them could explain his "silence, mutual assent to an account stated may also be established by payments on the account." Under the circumstances, "the reasonable inference from defendant's inaction and partial payment was that he assented to the amount due and, thus, an account stated was established." Affirmed.
This summary also appears under Litigation
Issues: The Uniform Fraudulent Transfer Act (UFTA)(MCL 566.31 et seq.); UFTA action filed by plaintiffs-law firms against former clients; Use of confidential information obtained during the course of the attorney-client relationship; "Conflict of interest" under MRPC 1.9; Applicability of the exceptions in MRPC 1.6(c)(3) & (5); Denial of plaintiffs' motion for summary disposition after a preliminary injunction/receivership hearing; Whether plaintiffs set forth any specific "transfer" that was being challenged as fraudulent; MCL 566.34; Whether plaintiffs established a likelihood that they would prevail on the merits; Michigan AFSCME Council 25 v. Woodhaven-Brownstown Sch. Dist.; Whether a receiver was properly appointed; Reed v. Reed; MCL 600.2926; Discovery; MCR 2.302(B); Sanctions; MCL 600.2591(3)(a)(i); Whether the action was "frivolous"; MCR 2.114(D)(3); MCR 2.313(B)(2)(c); Attorney Grievance Commission (AGC)
Court: Michigan Court of Appeals (Unpublished)
Case Name: Mark Chaban, P.C. v. Rathore
e-Journal Number: 55862
Judge(s): Per Curiam – M.J. Kelly, Cavanagh, and Shapiro
The court held, among other things, that the plaintiffs-law firms "violated MRPC 1.6 and 1.9 by bringing this UFTA action and by revealing and using confidential information acquired by" the firms' attorneys (T and C) "during the course of their attorney-client relationship with" defendants-Ishtadev Rathore (Ray) and DOABA Truck Stop. It concluded that this case should have been dismissed shortly after it was filed. Further, the court upheld the trial court's decision to award the defendants sanctions, held that they were "entitled to assess actual damages and expenses associated with this vexatious appeal," and directed the trial court to refer T and C to the AGC for investigation. Plaintiffs appealed the trial court's order dismissing their fraud action against the defendants. C represented Ray and DOABA in a lawsuit filed by DOABA's fuel supplier. Ray retained T to file a chapter 11 bankruptcy petition for DOABA. A settlement was reached with the supplier and the bankruptcy petition was voluntarily dismissed. The court noted that it was undisputed that both T and C, and their law firms, formerly represented DOABA and Ray in legal matters. The "firms brought this UFTA action against DOABA and Ray, as well as Ray's relatives," after a dispute as to outstanding legal fees arose. T and C "pursued this action against DOABA and Ray on behalf of their law firms - alleged creditors of DOABA and Ray as a consequence of those alleged outstanding legal fees. The plain language of MRPC 1.9(a) specifically prohibited - as denoted by the words 'shall not' - both" T and C from representing their firms "in this substantially related matter in which their law firms' interests were materially adverse to the interests of their former clients, DOABA and Ray." Further, they "revealed and used financial and other confidential information acquired during their legal representations of DOABA and Ray in this fraud action filed against DOABA and Ray by their law firms." While they argued that the exceptions in MRPC 1.6(c)(3) and (5) applied, the court disagreed. First, T and C "never claimed that their legal services were used by Ray and DOABA to fraudulently transfer any assets owned by DOABA in violation of MCL 566.34(1)(a)." Second, they "did not reveal confidences of Ray and DOABA 'to establish or collect a fee.'" This was not an action to establish or collect attorney fees - it was a UFTA action. Further, T and C "did not reveal the confidences of Ray and DOABA to prove 'the services rendered' for purposes of collecting" their firms' claimed fees. Plaintiffs "brought this UFTA action 'derivatively,' on behalf of all of the 'creditors' of Ray and DOABA," although T "was not retained to represent any of these alleged 'creditors' which he learned about during the course of his representation of Ray and DOABA." Affirmed.
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