FSM SUPREME COURT TRIAL DIVISION

Cite as Saimon v. Wainit, 16 FSM Intrm 143 (Chk. 2008)

[16 FSM Intrm 143]

SALOMON SAIMON,

Plaintiff,

vs.

TADASHI WAINIT,

Defendant.

CIVIL ACTION NO. 2008-1044

Hearing: September 19, 2008

Decided: September 29, 2008

APPEARANCES:

[16 FSM Intrm 144]

HEADNOTES

    When no response has been filed to a pending summary judgment motion, the non-movant’s failure to respond is deemed a consent to the motion, but the motion still must have a sound basis in law and fact in order for the court to grant it, and even though the non-movant’s non-response to a summary judgment motion constitutes a failure to overcome the plaintiff’s prima facie case, the movant plaintiff still must also overcome all affirmative defenses that the defendant has raised in order to succeed on his summary judgment motion. Saimon v. Wainit, 16 FSM Intrm. 143, 146 (Chk. 2008).

    An account stated is a species of contract action, in which the plaintiff must prove that the defendant agreed to pay a specific amount to the plaintiff. It is an agreement, based on prior transactions between the parties, that all terms of the account are true and that the balance struck is due and owing from one party to the other. An account stated is an agreement, expressed or implied, that an examination of the account between the parties has occurred, a statement of that account has been asserted, and accepted as correct. Saimon v. Wainit, 16 FSM Intrm. 143, 146-47 (Chk. 2008).

    The existence of an account stated need not be express and frequently is implied from the circumstances. For example, where a creditor renders a statement and the debtor fails to object in a reasonable time, the open account may be superseded by an account stated. Saimon v. Wainit, 16 FSM Intrm. 143, 147 n.1 (Chk. 2008).

    In order for a law firm to prevail on a summary judgment motion on an account-stated claim for attorney’s fees, it has to show that, as a matter of law, the defendant personally was the client for whom all the legal services were performed or that he had agreed to pay for all such services rendered. But that does not end the inquiry. Saimon v. Wainit, 16 FSM Intrm. 143, 147 (Chk. 2008).

    Although fee suits appear from a distance to be basically suits to recover on a breach of contract or, in some instances, to recover for the reasonable value of personal services, on closer inspection, the law is clear that lawyers suing clients are not treated as are merchants suing former trading partners. The procedural landscape is much narrower and more tightly regulated. The burden is on the lawyer to present detailed evidence of services actually rendered. Saimon v. Wainit, 16 FSM Intrm. 143, 147 (Chk. 2008).

    There are two principal ways in which attorney-fee suits differ from other kinds of collection suits between commercial strangers. One is that the court, exercising its supervisory powers over lawyers, can reduce the amount charged, and the other is that the defenses available to clients are expanded. Saimon v. Wainit, 16 FSM Intrm. 143, 147 (Chk. 2008).

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    An attorney seeking to recover unpaid attorney fees on the theory of account stated must prove the reasonable value of the services rendered if the fee agreement was entered into during the course of the attorney-client relationship. This is because when the account stated is for legal services, there is a presumption of undue influence when entered between an attorney and client during their fiduciary relationship. The attorney has the burden of showing that the transaction was fair and regular and entered voluntarily by the client with full knowledge of the facts. Saimon v. Wainit, 16 FSM Intrm. 143, 147 (Chk. 2008).

    Although a written agreement may provide for a specified attorney fee, the courts may inquire into the reasonableness of the fee. Thus, even when enforcing a fee contract, the attorney’s fee must still be reasonable or the court may reduce it because the fee charged under the fee contract is always subject to reduction by the court in the exercise of a supervisory power over lawyers. Saimon v. Wainit, 16 FSM Intrm. 143, 148 (Chk. 2008).

    To determine the legal fees’ reasonableness, the court would need evidence of the services performed, by whom they were performed, the time expended thereon and the hourly rate charged therefor because an appropriate fee consists of reasonable charges for reasonable services. When there is nothing, other than the client’s affirmation of debt while he was seeking counsel for a pending criminal appeal, to prove the reasonable value of the services rendered, the affirmation is insufficient. Merely because a client affirmed that a specified amount was due is not enough to prove the services’ reasonable value. Saimon v. Wainit, 16 FSM Intrm. 143, 148 (Chk. 2008).

    Any final judgment, when it is not entered by default, must grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party’s pleadings. Saimon v. Wainit, 16 FSM Intrm. 143, 148 (Chk. 2008).

Pre-judgment interest cannot be awarded until the court has determined when payment would reasonably have been due. Saimon v. Wainit, 16 FSM Intrm. 143, 148 (Chk. 2008).

COURT’S OPINION

READY E. JOHNNY, Associate Justice:

    On August 11, 2008, the plaintiff, Salomon Saimon, filed and served his summary judgment motion. No response was filed. A hearing was set for September 19, 2008 and duly noticed. Saimon appeared. The defendant, Tadashi Wainit, did not. The motion is granted in part. The reasons follow.

I.

On June 17, 2008, Saimon filed a complaint alleging that Wainit owed him, on an account stated, for legal work that Saimon, doing business as the Law Offices of Saimon and Associates, had done for Wainit. His complaint prayed for the $40,849.22 in fees for the account stated; 9% post-judgment interest; costs and attorney’s fees; and "[a]ll costs and fees deemed just and equitable by the Court."

    On July 1, 2008, Wainit, through counsel, answered. He admitted that the plaintiff performed the legal work and the dollar amount of the work, but denied that he was liable because, he asserted, the work was done for him in his official capacity as an Udot municipal official and Saimon understood that payment would be Udot Municipality’s responsibility. Wainit also asserted that therefore Udot Municipality was an indispensable party to this action and that Saimon was required to name and serve Udot as well.

II.

    Saimon’s August 11, 2008 summary judgment motion seeks not only judgment for the $40,849.22 attorney’s fees but also 9% prejudgment interest since July 19, 2006. Wainit did not respond to this motion. When no response has been filed to a pending summary judgment motion, the non-movant’s failure to respond is deemed a consent to the motion, but the motion still must have a sound basis in law and fact in order for the court to grant it. Joe v. Kosrae, 13 FSM Intrm. 45, 47 (Kos. 2004); see also Actouka v. Kolonia Town, 5 FSM Intrm. 121, 123 (Pon. 1991).

    Even though a non-movant’s non-response to a summary judgment motion constitutes a failure to overcome the plaintiff’s prima facie case, the movant plaintiff still must also overcome all affirmative defenses that the defendant has raised in order to succeed on his summary judgment motion. Lee v. Lee, 13 FSM Intrm. 68, 71 (Chk. 2004); see also FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 546 (Chk. 2007). Wainit’s answer raised as a defense that Udot Municipality, not he, was responsible for the debt and that Udot was an indispensable party that had to be named and served.

III.

    Attached to the summary judgment motion, as Exhibit A, was an attorney-client fee agreement between Wainit and Stephen V. Finnen (a former associate in Saimon’s law office), signed by Wainit on July 19, 2006, and in which Finnen agreed to represent Wainit in a pending criminal appeal. Section eight of that document provides:

Attorney-Client Fee Agreement at 3. This may be considered an account stated. "An account stated is a species of contract action, in which the plaintiff must prove that the defendant agreed to pay a specific amount to the plaintiff." Frank M. McDermott, Ltd. v. Moretz, 898 F.2d 418, 421 (4th Cir. 1990). It is "’an agreement, based on prior transactions between the parties, that all terms of the account are true and that the balance struck is due and owing from one party to the other.’" S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1091 (9th Cir. 1989) (quoting Trafton v. Youngblood, 442 P.2d

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648, 653 (Cal. 1968)). "An account stated is an agreement, expressed or implied, that an examination of the account between the parties has occurred, a statement of that account has been asserted, and accepted as correct." Polygram, S.A. v. 32-03 Enterprises, Inc., 132 697 F. Supp. 132, 136 (E.D.N.Y. 1988).

    In order for a law firm to prevail on a summary judgment motion on an account-stated claim for attorney’s fees, it has "to show that, as a matter of law, [the defendant] personally was the client for whom all the legal services were performed or that he had agreed to pay for all such services rendered." LeBoeuf, Lamb, Greene & MacRae, LLP v. Worsham, 185 F.3d 61, 64 (2d Cir. 1999). Section eight does that. In that section Wainit affirms his personal (and ultimate) responsibility for the debt. This is sufficient for Saimon to overcome Wainit’s affirmative defense that Udot Municipality, not he, was responsible for the debt. It thereby also overcomes Wainit’s claim that Udot Municipality is an indispensable party that must be joined.

    There being no genuine issue of material fact concerning liability, Saimon is therefore entitled to summary judgment that Wainit is liable to him for attorney’s fees for the work his office performed that resulted in the $40,849.22 billing.

IV.

      "Although a written agreement may provide for a specified attorney fee, the courts may inquire into the reasonableness of the fee." Hebert v. Neyrey, 432 So. 2d 396, 401 (La. Ct. App. 1983). Thus, even when enforcing a fee contract, the attorney’s fee must still be reasonable or the court may reduce it, Aggregate Sys., Inc. v. FSM Dev. Bank, 10 FSM Intrm. 493, 496 (Chk. 2002), because "[t]he fee charged under the fee contract is always subject to reduction by the court in the exercise of a supervisory power over lawyers," Wolfram, supra, § 9.6, at 555. Just like any plaintiff, any party seeking attorney’s fees, including a plaintiff law firm suing for the fees it claims to have earned, always bears the burden of providing sufficient evidence to prove its claim. See People of Rull ex rel. Ruepong v. M/V Kyowa Violet, 15 FSM Intrm. 53, 63 (Yap 2007), rev’d on other grounds, 16 FSM Intrm. 49 (App. 2008). More must be presented than bills issued to the client (or a mere compilation of hours multiplied by a fixed hourly rate) since this type of data does not provide the court with enough information about their reasonableness ) a matter which the court cannot determine on the basis of conjecture or conclusions of the attorney seeking the fees. Id.