Pepper & Brothers P.L.L.C. v. Brett Jones ( 2014 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
February 19, 2014 Session
PEPPER & BROTHERS P.L.L.C. v. BRETT JONES
Appeal from the Circuit Court for Davidson County
No. 12C3121 Philip E. Smith, Judge
No. M2013-01668-COA-R3-CV - Filed April 4, 2014
A homeowner who was sued by a contractor hired an attorney to defend against the suit. The
homeowner and the attorney entered into a contract whereby the attorney would charge $225
per hour, calculate the bill in quarter hour increments and bill monthly. The homeowner made
his monthly payments as the litigation progressed, but after he became dissatisfied with the
service he was getting, he stopped paying . He subsequently discharged the attorney and
hired other counsel. The attorney sent the homeowner a final bill for $8,529. The
homeowner paid $4,000 and offered to settle the remainder for a lesser amount. The attorney
refused and brought suit against the homeowner for the unpaid balance. The trial court
entered judgment in favor of the attorney. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
B EN H. C ANTRELL, S R. J., delivered the opinion of the Court, in which F RANK G. C LEMENT,
J R. and A NDY D. B ENNETT, JJ., joined.
Brett Jones, Nashville, Tennessee, Pro Se. appellant.
Roger Alan Maness, Clarksville, Tennessee for the appellee, J. Ross Pepper, Pepper &
Brothers PLLC.
OPINION
I. A C ONTRACTOR S UES A H OMEOWNER
Brett Jones and his company, Big Borassa Music, LLC, entered into a contract with
a business called American Style Renovations to do extensive renovations on Mr. Jones’s
home on Belmont Boulevard in Nashville. After disagreements arose about the contractor’s
charges, American Style Renovations filed suit against Mr. Jones in the Chancery Court of
Davidson County, asking for a $70,000 judgment. Mr. Jones hired attorney J. Ross Pepper
to represent him in the matter. Mr. Jones and Mr. Pepper entered into a Legal Representation
Agreement on May 25, 2011.1
The contract stated that Mr. Pepper would charge $225 per hour for each hour that he
worked on Mr. Jones’ case. Mr. Pepper would also charge $75 an hour for any work done
on Mr. Jones’ behalf by his office paralegal. Both attorney time and paralegal time would
be billed in quarter hour (.25) increments. Mr. Jones also authorized Mr. Pepper to incur
expenses on his behalf, such as photocopies, postage, filing fees and court reporter expenses.
The following statement was printed at the bottom of the contract:
Any expressions or statements on the part of Attorney concerning the outcome
of Client’s matter are based upon professional judgment, but are not guarantees
of any particular result. Client understands that, even after spending money for
fees and expenses, it is possible that a judgment may be entered against Client
and/or that Client may not recover any money.
According to Mr. Jones, much of the work performed by Mr. Pepper was directed
towards trying to arrange mediation between Mr. Jones and American Style Renovations.
Mr. Jones sent Mr. Pepper several e-mails questioning the wisdom of using mediation
because the positions of the parties were so far apart. The mediation was nonetheless
conducted on November 21, 2011, but it was unsuccessful. Mr. Pepper billed Mr. Jones
monthly for his efforts. Mr. Jones paid Mr. Pepper about $10,200 in fees over a period of
nine months. After mediation failed, Mr. Jones requested that Mr. Pepper “cap” his fees
going forward. Mr. Pepper refused.
Mr. Jones subsequently secured the services of another attorney and he discharged Mr.
Pepper on December 11, 2011. Mr. Pepper transferred the case files to Mr. Jones’ new
attorney, and he sent Mr. Jones a final bill for $4,529.29, which included the mediator’s fee.
Mr. Jones refused to pay the bill and offered to settle with a final payment of $3,000. Mr.
Pepper refused the offer and also refused to settle the dispute through arbitration. Mr. Jones
filed a complaint about the fees with the Board of Professional Responsibility, which
recommended that the fee dispute be mediated.
II. M R. P EPPER S UES H IS C LIENT
1
Mr. Jones does not deny that he signed the legal representation agreement, although his signature
is not on the copy of the agreement found in the appellate record.
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On August 3, 2012, Mr. Pepper filed suit against Mr. Jones through his attorney,
Roger Maness, in the Circuit Court of Davidson County. He asked the court to award him
a money judgment of $4,529.29 plus discretionary costs, court costs, and prejudgment
interest. Mr. Jones responded on September 28, 2012 by sending a letter to the Clerk of the
Circuit Court and to Mr. Maness, which he titled “Response of the defendant to the Circuit
Court.” 2
Mr. Jones alleged that the invoice was incorrect and that Mr. Pepper had padded it for
his own benefit. He also noted that the amount at issue was small enough to be settled in
small claims court (meaning presumably General Sessions), and he asked the Circuit Court
to remand the matter to said court. He also suggested that Mr. Pepper had filed his suit in
Circuit Court in order to drive up Mr. Jones’ legal costs. Mr. Jones apparently resolved to
counter this maneuver by deciding to represent himself, for he did so from that moment
forward.
On December 2, 2012, Mr. Jones sent a letter to Mr. Maness. He reiterated his offer
to settle Mr. Pepper’s suit for $3,000, repeated his point that the amount sued for was well
within the jurisdictional limits of the General Sessions court and contended that the matter
could more economically be settled before the lower court. He also mentioned, for the first
time, the possibility of a jury trial: “If the Judge allows you to waste taxpayers monies in this
manner I will be requesting a jury trial.”
On April 25, 2013, Mr. Jones filed a motion asking the court to order mediation. Mr.
Pepper responded, arguing that mediation should be denied because it would not serve the
purpose of judicial economy, and he asserted that it would take not more than half an hour
of trial time for Mr. Pepper to present his case-in-chief. The trial court denied the motion for
mediation.
The case was scheduled for hearing on June 5, 2013. On May 28, 2013, Mr. Jones
filed a motion to continue the hearing. He asserted that he expected Chancellor Lyle to enter
findings of facts and conclusions of law in the underlying suit between himself and American
Style Renovations by the middle of July, that those findings of facts and conclusions law
were a necessary part of his defense, and that “I anticipate the Court awarding damages to
me under claims that Mr. Pepper failed to even recognize.” He also noted that the case was
set for a bench trial, asserted that he had requested a jury trial in a timely manner, and asked
for the matter to be continued so it could be heard by a jury.
2
The timing and content of Mr. Jones’ letter indicates that it was meant to be an Answer to Mr.
Pepper’s Complaint, a pleading authorized by Tenn. R. Civ. P. 7.01.
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The hearing of the case was conducted as scheduled. Mr. Jones represented himself
pro se. At the outset of the proceeding, Mr. Jones requested that the court grant his motions
to continue the trial until mid-July and to grant him a jury trial. The court denied the
motions. Mr. Jones and Mr. Pepper were the only witnesses to testify.
When Mr. Pepper took the stand, Mr. Jones questioned him about the circumstances
behind the decision to bring the underlying case to mediation. Mr. Pepper testified that it
was his judgment that mediation was the best and most economical strategy to follow. Mr.
Jones then admitted into evidence three separate e-mails he had sent to Mr. Pepper,
expressing his doubt about the wisdom of using mediation, and indicating that he had only
reluctantly agreed to go along with Mr. Pepper’s recommendation.
Mr. Jones also questioned Mr. Pepper closely about his quarter hour increment billing
method. Mr. Pepper acknowledged that if he performed a 46 minute chore related to Mr.
Jones’ case, he would bill for a full hour. Similarly, if he took a five minute phone call
related to the case, he would charge for a quarter hour. Mr. Jones then pointed to the clause
in the legal representation agreement that said that Mr. Pepper would be paid $225 per hour
for “each hour of time” which he spent working on Mr. Jones’ case, and he pointed out that
in both examples cited above, the actual time devoted to the case would be less than the
amount billed for.
During his questioning of Mr. Pepper, Mr. Jones contended that the court could use
the concept of “block billing” to reduce his contractual liability to Mr. Pepper. He asserted
that “courts in Tennessee and all over the country” have “routinely discounted” attorney
invoices on the basis of “block billing.” Asked if he had a case on point, he said “the case of
Randolph v. Schubert. It’s 2007.” However, we have been unable to find that case, or any
other Tennessee case discussing the practice of block billing.3
At the conclusion of testimony and of brief closing arguments by both sides, the trial
court announced its decision from the bench. The court characterized the case as a simple
breach of contract action, and held that Mr. Jones had failed to establish any irregularity in
the billing practices of Mr. Pepper, that required an adjustment in his bill, other than one
small error.4 The court accordingly ruled that Mr. Pepper was entitled to the entire amount
he sued for, minus the small sum attributable to that error. It also awarded Mr. Pepper pre-
3
The trial court admonished Mr. Jones about offering argument during cross-examination, and stated
that in any case it was unfamiliar with block billing.
4
Mr. Jones admitted that he had mistakenly billed 6.25 hours of paralegal time at the rate of $100
per hour, instead of the $75 per hour stated in the contract.
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judgment interest at the rate of 10% per year. The court’s ruling was memorialized in an
order filed on July 18, 2013. The appeal followed.
III. I SSUES ON A PPEAL
A. A Contract Question
We must state at the outset that parties who decide to represent themselves are entitled
to fair and equal treatment by the courts, and that the courts should take into account that
many pro se litigants have no legal training and little familiarity with the judicial system.
Hessmer v. Hessmer, 138 S.W.3d 901 (Tenn. Ct. App. 2003); Whitaker v. Whirlpool Corp.,
32 S.W.3d 222, 227 (Tenn. Ct. App. 2000); Paehler v. Union Planters Nat'l Bank, Inc., 971
S.W.2d 393, 396 (Tenn. Ct. App. 1997). The courts accordingly give pro se litigants who
are untrained in the law a certain amount of leeway in drafting their pleadings and briefs.
Whitaker v. Whirlpool Corp., 32 S.W.3d at 227; Paehler v. Union Planters Nat'l Bank, Inc.,
971 S.W.2d at 397; Irvin v. City of Clarksville, 767 S.W.2d 649, 652 (Tenn. Ct. App. 1988).
The courts must also be mindful, however, of the boundary between fairness to a pro
se litigant and unfairness to the pro se litigant's adversary. Thus, the courts must not excuse
pro se litigants from complying with the same substantive and procedural rules that
represented parties are expected to observe. Edmundson v. Pratt, 945 S.W.2d 754, 755
(Tenn. Ct. App. 1996); Kaylor v. Bradley, 912 S.W.2d 728, 733 n. 4 (Tenn. Ct. App. 1995).
The trial court found this case to be a simple breach of contract action. Mr. Jones
disagrees with that characterization, for he insists that his case implicates far more
consequential issues. Before addressing his issues, however, we must note that this case did
indeed arise out of a contract dispute, that Mr. Pepper brought suit for breach of that contract,
and that the law regarding contracts and their breach is therefore a proper subject of inquiry
for us in this appeal.
“The central tenet of contract construction is that the intent of the contracting parties
at the time of executing the agreement should govern.” Planters Gin Co. v. Fed. Compress
& Warehouse Co., Inc., 78 S.W.3d 885, 890 (Tenn. 2002). Courts defer to the contracting
process by enforcing written contracts, which establish the rights and obligations of the
parties, according to their plain terms, without favoring either contracting party. Cocke
County Bd. of Highway Commissioners v. Newport Utilities Bd., 690 S.W.2d 231, 237 (Tenn.
1985); Hardeman County Bank v. Stallings, 917 S.W.2d 695, 699 (Tenn. Ct. App. 1995).
It is often said that the courts will not relieve parties of their contractual obligations
simply because these obligations later prove to be burdensome or unwise. Boyd v. Comdata
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Network, Inc., 88 S.W.3d 203, 223 (Tenn. Ct. App. 2002)(citing Realty Shop, Inc. v. RR
Westminster Holding, Inc., 7 S.W.3d 581, 597–98 (Tenn. Ct. App. 1999)). But a contract
between an attorney and a client is subject to extra scrutiny because it creates a fiduciary and
confidential relationship between the parties. Hager v. Fitzgerald, 934 S.W.2d 668, 670
(Tenn. Ct. App. 1996).
Attorneys must deal with their clients in utmost good faith. This level of good faith
is significantly higher than is required in other business transactions where the parties are
dealing at arm's length. The client must be able to trust the attorney to deal fairly at all times,
including during the negotiation of the attorney's terms of employment. Alexander v. Inman,
974 S.W.2d 689, 693-94 (Tenn. 1998)(citing Cummings v. Patterson, 442 S.W.2d 640, 643
(Tenn. Ct. App. 1968)). Therefore, an attorney’s fees must be “reasonable” while no such
requirement of reasonableness is read into most other contracts.
B. The Reasonableness of Mr. Pepper’s Fees
Mr. Jones argues that the trial court entered a judgment based upon an unreasonable
fee. He also contends that the trial court did not follow the proper procedures to determine
the reasonableness of Mr. Pepper’s fees because, in pronouncing its judgment, it did not refer
to or apply the ten factors for evaluating the reasonableness of an attorney’s fee listed at Rule
1.5 of the Tennessee Rules of Professional Conduct. There is no requirement, however, that
a trial court specifically refer to Rule 1.5 when ruling on the question of the reasonableness
of an attorney’s fee.5
5
Tenn. R. Sup.Ct. 8, RPC 1.5. reads as follows:
(a) A lawyer's fee and charges for expenses shall be reasonable. The factors to be considered in
determining the reasonableness of a fee include the following:
(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite
to perform the legal service properly;
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude
other employment by the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services;
(8) Whether the fee is fixed or contingent;
(9) Prior advertisements or statements by the lawyer with respect to the fees the lawyer charges; and
(10) Whether the fee agreement is in writing.
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Mr. Jones’ argument especially focuses on the fourth factor on the list: “[t]he amount
involved and the results obtained.” He notes that Mr. Pepper recommended mediation over
his objections, and that mediation failed. He also asserts that despite Mr. Pepper’s
recommendation that he settle with the contractor in the underlying case by paying him
$18,000, Mr. Jones was ultimately awarded a judgment for $96,000 plus legal fees.
Mr. Jones accordingly argues that “the results obtained” did not justify an obligation
to pay the full invoiced amount. We note, however, that while the results obtained under a
contingency fee arrangement may be the primary determinant of the client’s financial
obligation, that is not so under the type of contractual arrangement in this case. It is only one
of ten factors to consider when determining whether a fee is reasonable. Further, the legal
representation agreement itself stated that while Mr. Pepper would exercise his professional
judgment, that did not guarantee any particular result.
Our courts have long held that “[a] lawyer who discharges his or her duties
appropriately is entitled to the reasonable, agreed-upon compensation without regard to the
actual benefit the services might have been to the client.” Fell v. Rambo, 36 S.W.3d 837, 852
(Tenn. Ct. App. 2000)(citing Spofford v. Rose, 237 S.W. 68, 76 (Tenn. 1922); Bills v. Polk,
72 Tenn. 494, 496 (1880); Adams v. Mellen, 618 S.W.2d 485, 488 (Tenn. Ct. App. 1981)).
Mr. Pepper testified that his customary fee was $275 an hour, but that he reduced it
for Mr. Jones, that he exercised his professional judgment on behalf of Mr. Jones, that he
worked efficiently, and that his bill was a true and accurate accounting of the money
rightfully owed to him for the services he had rendered. Mr. Jones did not present any
countervailing evidence other than the small error in the billing for paralegal time that he
pointed out.
The reasonableness of an attorney’s fee depends on the facts of each individual case.
Alexander v. Inman, 903 S.W.2d 686, 695 (Tenn. Ct. App. 1995) The trial court's
determination of a reasonable attorney's fee is “a subjective judgment based on evidence and
the experience of the trier of facts.” Wright ex rel. Wright v. Wright, 337 S.W.3d 166, 176
(Tenn. 2011) (quoting United Med. Corp. of Tenn., Inc. v. Hohenwald Bank & Trust Co., 703
S.W.2d 133, 137 (Tenn. 1986)).6
6
We are aware that most of the cases we have cited do not involve fee disputes between attorneys
and their clients, but rather, for the most part, the application of statutes or contracts that provide for an
award of “reasonable attorney fees” to the prevailing party, without reference to any particular fee schedule.
Nonetheless, in light of the requirements of Rule 1.5, we believe that our courts are entitled under some
circumstances to inquire into the reasonableness of contracts for services between attorneys and clients.
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We review a trial court’s determination regarding the reasonableness of an attorney
fee under the abuse of discretion standard. United Med. Corp. of Tenn. v. Hohenwald Bank
& Trust Co., 703 S.W.2d at 137; Killingsworth v. Ted Russell Ford, Inc., 104 S.W.3d 530,
534 (Tenn. Ct. App. 2002); Coleman v. Coleman, No. W2012-02183-COA-R3-CV, 2013
WL 5308013, at *11 (Tenn. Ct. App. Sept. 19, 2013)(no Tenn. R. App. P. 11 application
filed). Thus, an appellate court will normally defer to a trial court's award of attorney's fees
unless there is “a showing of an abuse of [the trial court's] discretion.” Threadgill v.
Threadgill, 740 S.W.2d 419, 426 (Tenn. Ct. App. 1987).
Our Supreme Court explained the abuse of discretion standard in Eldridge v. Eldridge,
42 S.W.3d 81, 84 (Tenn. 2001). Under that standard, a trial court’s ruling
“will be upheld so long as reasonable minds can disagree as to propriety of the
decision made.” State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000); State v.
Gilliland, 22 S.W.3d 266, 273 (Tenn. 2000). A trial court abuses its discretion
only when it “applie[s] an incorrect legal standard, or reache[s] a decision
which is against logic or reasoning that cause[s] an injustice to the party
complaining.” State v. Shirley, 6 S.W.3d 243, 247 (Tenn. 1999). The abuse
of discretion standard does not permit the appellate court to substitute its
judgment for that of the trial court. Myint v. Allstate Ins. Co., 970 S.W.2d
920, 927 (Tenn. 1998).
After reviewing the record in this case, we find that reasonable minds can disagree
as to the reasonableness of Mr. Pepper’s fees. Thus, we cannot say that the trial court abused
its discretion in awarded Mr. Pepper the full amount of his contracted-for fee.
C. The Request for a Jury
Mr. Jones also contends that trial court erred by denying him his constitutional right
to a jury trial. See Tenn. Const. Art. 1, § 6. However, the right to a jury trial is not
self-enforcing in civil cases. Nagarajan v. Terry, 151 S.W.3d 166 (Tenn. Ct. App. 2003).
Parties who desire a jury trial must file and serve a timely demand. If they fail to so in
accordance with Rules of Civil Procedure they will be deemed to have waived their right.
Tenn. R. Civ. P. 38.05.
Under Tenn. R. Civ. P. 38.02, any party may demand a trial by jury by including the
demand in any of the pleadings authorized by Tenn. R. Civ. P. 7.01 when the pleading is
filed, or “by written demand filed with the clerk, with notice to all parties, within fifteen (15)
days after the service of the last pleading raising an issue of fact.”
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Mr. Pepper did not ask for a jury when he filed his complaint on August 3, 2012. Nor
did Mr. Jones’ pro se “response” to the complaint include any demand or mention of a jury
trial. The first mention of a jury in the appellate record is in Mr. Jones’ letter of December
2, 2012 to Mr. Maness. Although the letter notes in one corner “copy to the 6th circuit court
of Davidson County” it was not filed in the circuit court until May 28, 2013, when Mr. Jones
appended it to his motion for continuance. Further, the letter does not actually ask for a jury
trial, but merely threatens, “If the Judge allows you to waste taxpayers monies in this manner
I will be requesting a jury trial.”
Thus, Mr. Jones did not include his jury demand with any pleading, nor did he file a
demand with the clerk fifteen days after the service of the last pleading. In fact, Mr. Jones’
letter of December 2, 2012 was his only mention of the possibility of a jury trial prior to
hearing. Thus, even the most charitable reading of the record does not support Mr. Jones’
contention that he made a timely request for a jury trial, and the trial court did not err by
refusing to empanel a jury.
D. The Request for a Continuance
Mr. Jones also takes issue with the trial court’s refusal to grant his motion for a
continuance. The record shows that Mr. Jones filed the motion for a continuance on May 28,
2013, just eight days before the scheduled trial. His stated reason for the motion was that he
was expecting the Chancery Court to enter its findings of facts and conclusions of law in the
underlying suit between himself and the contractor, and that the result would show that Mr.
Pepper had vastly underestimated the merits of his counter-claim in that case. He also
contended that he had filed a timely request for a jury trial, and that a continuance was
necessary so the case could be heard by a jury.
As we discussed above, however, a contract for legal representation does not normally
include a promise that the client will prevail, and only contingency arrangements condition
payment for legal services on the results of litigation. Further, the contract between Mr.
Pepper and Mr. Jones specifically stated that Mr. Pepper would not guarantee any specific
result. Thus, the possibility that Mr. Jones may have been able to prove at a later date that
another attorney represented him more successfully than Mr. Pepper did is not a sufficient
justification for a continuance. As for the question of jury trial, we have already concluded
that Mr. Jones waived any entitlement to a jury because of his failure to make a timely
demand, so a continuance would have served no useful purpose.
Further, Tennessee's trial courts possess broad discretionary authority to control their
dockets. State v. King, 40 S.W.3d 442, 449 (Tenn. 2001); Nagarajan v. Terry, 151 S.W.3d
at 172; Hessmer v. Hessmer, 138 S.W.3d at 904. This discretion includes decisions regarding
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motions for a continuance. Blake v. Plus Mark, Inc., 952 S.W.2d 413, 415 (Tenn. Ct. App.
1995). Under the circumstances of this case, we do not believe that the trial court abused its
discretion in denying Mr. Jones’ motion for a continuance.
IV.
The judgment of the trial court is affirmed. We remand this case to the Circuit Court
of Davidson County for any further proceedings necessary. Tax the costs on appeal to the
appellant, Brett Jones.
_________________________________
BEN H. CANTRELL, SR. J.
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