Motion For Directed Verdict (Final)
Motion For Directed Verdict (Final)
Motion For Directed Verdict (Final)
INTRODUCTION
The Plaintiff, Attorney Thomas A. Landry, seeks to recover legal fees totaling more than
$300,000 plus interest for a simple sale of stock in a closely-held family business. The
both his complaint and Defendant’s counterclaims, the burden of proof rests on Mr. Landry. See
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Plus multiple damages and attorneys fees pursuant to M.G.L.c. 93A, which Defendants understand will be decided
by the Court.
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p. 6. infra. While the Plaintiff did little to earn his fee, he already has been paid more than
$121,000 for his efforts. He now seeks an additional sum in excess of $180,000 via his
Complaint in this case. Defendants submit that the Plaintiff’s case in-chief demonstrates
convincingly that he is entitled to nothing more than that which he already has been paid and that
he has, inter alia, overcharged the Defendants. Accordingly, because the Plaintiff bears the
burden of proof on both his claims and Defendants’ counterclaims, judgment should enter on the
contract, violation of the implied covenant of good faith and fair dealing, and for declaratory
relief.
FACTUAL BACKGROUND
The parties executed a Contingent Fee Agreement on March 26, 2001. The Contingent
Fee Agreement relates to the sale of stock by Defendants, Elizabeth Haartz and Walter Davis, as
trustees to the Haartz Corporation. Id. Mr. Davis and Ms. Haartz are husband and wife. Ms.
Haartz inherited (with her two brothers, Eric and Chris) her father’s ownership interest in Haartz
Corporation. Thus, in 2001, the siblings each owned approximately one-third of the stock in
The Contingent Fee Agreement upon which the Plaintiff’s suit rests, recites that the
“Valuation, negotiation, and contract for purchase and sale of all stock shares held in
Haartz Corporation held [sic] by or on behalf of Elizabeth Haartz.”
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According to the literal language of the Contingent Fee Agreement:
Mr. Landry prepared the Contingent Fee Agreement on a form he utilized in his office for
tort cases. He never before had used the form for a corporate transaction, nor has he ever used it
Before deciding upon the 1.5% fee, Mr. Landry did not know what others lawyers
charged in the vicinity of his practice for representation similar to that which he provided to Ms.
Haartz and Mr. Davis. For all other matters on which Mr. Landry had previously worked for Ms.
Haartz and Mr. Davis, he had charged them an hourly rate of $150. Mr. Landry kept no time
records for his work on the sale of Ms. Haartz’s and Mr. Davis’ stock to the Haartz corporation
At the time the Contingent Fee Agreement was executed, Mr. Landry asked Ms. Haartz
and Mr. Davis if they would like him to explain it to them; when they declined, he said nothing.
Prior to the Contingent Fee Agreement, Mr. Landry was told that Ms. Haartz’s stock was worth
$30-$40,000,000. He had also been told by Ms. Haartz and Mr. Davis that Eric Haartz had
indicated that the Haartz corporation was committed to repurchasing Ms. Haartz’s and Mr. Davis’
stock.
At the time the parties executed the Contingent Fee Agreement, Mr. Landry had had little
experience with corporate stock transactions. He had handled only one previous stock
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repurchase matter and that involvement was limited to drafting in 1985 a “limitation of sale
agreement” and a simple contract for the purchase of shares pursuant to that agreement.
Over the years, Mr. Landry’s practice involved civil and criminal litigation, wills, trusts,
estates, contract drafting, real estate conveyancing, divorce and tax work. More recently, he
dropped divorce and focused more and more on criminal defense work. In 2001, half of his
practice consisted of criminal defense and the balance, trusts, estates, will drafting, real estate
conveyancing and litigation; he did little or no corporate work. His practice was similarly
3. Mr. Landry’s Professional Relationship with Ms. Haartz and Mr. Davis
Prior to the Contingent Fee Agreement, Mr. Landry had handled a number of matters for
Ms. Haartz and Mr. Davis. He always billed Ms. Haartz and Mr. Davis hourly, including their
discussions in 1996 about selling Ms. Haartz’s and Mr. Davis’ stock back to the Haartz
Corporation. Even though Ms. Haartz and Mr. Davis had always paid their bills on time, Mr.
Landry rationalizes that he created a contingent fee arrangement in this instance primarily
because he might have to initiate litigation to force the Haartz Corporation to re-purchase Ms.
4. Mr. Landry’s Efforts on Behalf of Ms. Haartz and Mr. Davis with Regard to the Sale of
Their Stock to the Haartz Corporation
Mr. Landry’s activities with respect to the repurchase were minimal. He spoke with Ms.
Haartz and Ms. Davis a handful of times. He corresponded minimally about the transaction and
he attended few meetings. He did little or no drafting and added little to the final repurchase
agreement, the drafting and preparation of which was all done by Bingham, Dana, & Gould
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Even according to him, Mr. Landry was able to negotiate but two changes in the
documentation Bingham drafted: (1) deletion of language in the promissory note and (2)
additional language in paragraph 6 of the Repurchase Agreement, the latter of which Bingham
drafted.
5. Factors Impacting Mr. Landry’s Representation of Ms. Haartz and Mr. Davis
When asked to describe the skills he brought to the task for which Ms. Haartz and Mr.
Davis engaged him, Mr. Landry related that he had been an attorney practicing law sufficiently to
understand Ms. Haartz’s rights and duties. He acknowledged that his representation involved no
novel issues and that he gave up no other work to attend to Ms. Haartz’s and Mr. Davis’ affairs.
Mr. Landry related that Ms. Haartz and Mr. Davis imposed upon him no time limitations and that
the only results he obtained on their behalf were the two changes in the Repurchase Agreement
A. Burden of Proof
“Massachusetts has established that a lawyer always bears the burden of proof in any
proceeding to resolve a billing dispute, whether the lawyer appears as a Plaintiff seeking to
recover a fee or as a Defendant in suit for a refund.” Sears, Roebuck & Co. v. Goldstone &
Sudalter, P.C., 128 F.3d 10, 17 (1st Cir. 1997) (citing First National Bank of Boston v. Brink, 372
Mass. 257 (1977); Smith v. Binder, 20 Mass. App. Ct. 21 (1985)). “Placing the burden of proof
on the attorney is sensible in light of the difficulty of monitoring the attorney’s services,” Sears,
Roebuck & Co., 128 F.3d at 17-18, and because “‘[a] lawyer…will usually have better access
than a client to evidence about the lawyer’s own services…’” Id. (quoting Restatement (Third)
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B. Reasonableness of the Fee Charges
The fee agreement at issue called for the payment of a “reasonable fee not to exceed
1.5%.” Emphasis added. The Supreme Judicial Court has construed Mr. Landry’s fee agreement
form as establishing a “reasonable fee” standard as the operative measure. Cameron v. Sullivan,
372 Mass. 128 (1977) (“The text of the agreement establishe[s] reasonableness as the measure”);
see also Brown, Rudnick, Freed & Gesmer v. Commonwealth, 16 Mass. L. Rep. 814 (Mass
Super. Ct. 2003) (denying motion in limine to preclude evidence of reasonableness of 25%
contingent fee and holding that “[c]contingent fee agreements are just as subject to a
reasonableness requirement as any other arrangement between an attorney and his or her
client”).2
The factors considered in determining whether a fee is reasonable include, but are not
limited to: “(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 engagement 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; and (8)
whether the fee is fixed or contingent.” Mass. R. Prof. Conduct, Rule 1.5(a); In the Matter of
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To the extent that the terms of the fee agreement are ambiguous –which they are not—any ambiguities are
to be construed against the attorney and in favor of the client. Garnick & Scudder, P.C. v. Dolinsky, 45 Mass. App.
Ct. 925 (1998) (“As a general proposition, the meaning of a written document, if placed in doubt, is construed
against the party that wrote it…and that ‘principle surely counts double when the drafter is a lawyer writing on his
or her own account to a client’); Beatty v. NP Corp., 31 Mass. App. Ct. 606, 612 (1991) (same). The Massachusetts
Bar Association’s publication entitled “Fees and Client Funds” states that “there is a common misunderstanding that
contingent fee agreements always require payment of a fixed percentage of the recovery, regardless of the amount of
the recovery or the time and effort required. The Comment to Rule 1.5 refutes this misunderstanding…‘the fee must
be reasonable.’”). Massachusetts Bar Association, Fees and Client Funds, p. 47 (3d. ed. 2003).
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Laurence S. Fordham, 423 Mass. 481 (1996); see also Berman v. Linnane, 434 Mass. 301 (2001)
(quoting Linthieum v. Archambualt, 379 Mass. 381, 388-389 (1979)) (“When determining a
reasonable attorney’s fee” the court considers “‘the nature of the case and the issues presented,
the time and labor required, the amount of damages involved, the result obtained, the experience,
reputation and ability of the attorney, the usual price charged for similar services by other
attorneys in the same area, and the amount of awards in similar cases.’”)
C. Breach of Contract
A party is entitled to judgment on a clam for breach of contract where there is (1) a valid
and enforceable agreement; (2) the party performed its obligations under the agreement, or was
ready, willing, and able to do so; (3) the other party breached an express promise; and (4) the
party was damaged by the breach. See Singarella v. Boston, 342 Mass. 385, 387 (1961). The
meaning of an unambiguous contract is a question of law that can be resolved by the court.
Lawrence-Lynch Corp. v. Dep’t of Envitl. Management, 392 Mass. 681, 682 (1984); Auclair v.
Thomas, 39 Mass. App. Ct. 344, 347 (1995) (citing Freelander v. G & K Realty Corp., 357 Mass.
Massachusetts contract. Starr v. Fordham, 420 Mass. 178, 184, 648 N.E.2d 1261 (1995). That
covenant prohibits a party to a contract from taking action which will injure the right of the other
party to receive the benefit of the parties’ contract. Anthony’s Pier Four, Inc. v. HBC Associates,
Inc., 411 Mass. 451, 471-72, 583 N.E.2d 806k (1991). In the context of an attorney-client fee
agreement, the implied covenant of good faith and fair dealing requires that the attorney honor
the fiduciary and ethical obligations he owes the client. GTE Gov’t Sys. Corp. v. Rackemann,
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Sawyer and Brewster, P.C., Civ. No. 90-1067-C (Middlesex Sup. Ct., April 4 1996) 1996 Mass.
Super. LEXIS 509, *21-23 (McHugh, J.). A breach of those obligations which causes harm to a
client amounts to a breach of the implied covenant of good faith and fair dealing. See Id.
E. Declaratory Relief
M.G.L.c. 231 §1 enables the Court to “make binding declarations of right, duty, status,
and other legal relations sought thereby, either before or after a breach or violation thereof has
occurred in any case in which an actual controversy has arisen and is specifically set forth in the
pleadings and whether any consequential judgment of relief is or could be claimed at law in
equity or not . . .” Henderson v. Axiam, Inc., 1999 Mass. Super. LEXIS 580 (Mass. Super. Ct
1999). Declaratory relief is appropriate where: (1) an actual controversy has arisen in the case
presented; (2) the Plaintiff has an interest therein; and (3) and the granting of declaratory relief
Schools of Cambridge, 320 Mass. 516, 518, 70 N.E.2d 298 (1946); Carlton Hotel v. Abrams, 322
Judgment in favor of a client for over-billing is available in a Chapter 93A case where
“the undisputed facts reveal that [the attorney’s] conduct falls within at least the penumbra of
oppressive or unscrupulous. Sears, Roebuck & Co., 128F 3d at 19 (quoting Cambridge Plating
Co. v. NAPCO, Inc., 85F.3d 752, 769 (1st Cir. 1996) (quoting PMP Assoc., Inc. V.Globe
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“A practice or act [is] unfair under G.L.c. 93A §2, if it is (1) within the penumbra of a
common law, statutory, or other established concept of unfairness; (2) immoral, unethical,
oppressive, or unscrupulous…” Heller Financial v. Insurance Co. of North America, 410 Mass.,
400, 408 (1991) (citing Datacomm Interface, Inc. v. Computerworld, Inc., 396 Mass. 760, 778
(1986); and PMP Assocs., 366 Mass. at 596). Ethical violations concerning attorneys fees may
constitute violations of Chapter 93A. Doucette v. Kwiat, 392 Mass. 915 (1984) (finding that an
attorney’s collection of a fee to which he was not entitled violated Chapter 93A); Guenard v.
Burke, 387 Mass. 802, 809-10 (1982); Brown v. Gerstein, 17 Mass. App. Ct. 558 (1984) (finding
that deceitful action by attorney could violate the Rules of Professional Conduct and Chapter
In Guenard v. Burke, the Supreme Judicial Court held: “the Defendant’s reliance on an
agreement made in violation of S.J.C. Rule 3:14 in these circumstances was, as a matter of law,
an unfair or deceptive act of practice.” Id. The Court held that the attorney was only entitled to
the reasonable value of his services and that the client could recover under Chapter 93A if the
reasonable value of the lawyer’s services was less than the amount charged under an illegal fee
agreement. Id.
Rule 1.5 of the Massachusetts Rules of Professional Conduct prohibits an attorney from
“enter[ing] into an agreement for, charg[ing] or collect[ing] an illegal or clearly excessive fee.”
“[A]fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence,
experienced in the area of the law involved, would be left with a definite and firm conviction that
the fee is substantially in excess of a reasonable fee.” In The Matter of Laurence A. Fordham,
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ARGUMENT
While Attorney Landry bears the burden of proof with regard to the reasonableness of his
fee, the record demonstrates that the fee he charged and is attempting to collect from Ms. Haartz
and Mr. Davis is manifestly unreasonable, breaches the parties’ Contingent Fee Agreement,
constitutes a violation of the covenant of good faith and fair dealing and amounts to an unfair
By application of each and every applicable factor enumerated by the Supreme Judicial
Court, the fee Mr. Landry seeks to recover from Ms. Haartz and Mrs. Davis is unreasonable.
1. The Time and Labor Required and the Novelty and Difficulty of the Questions
Involved.
Mr. Landry did little work on the Repurchase Agreement. He spoke with Ms. Haartz and
Mr. Davis a handful of times, engaged in little or no correspondence, drafted 2-3 pages and
satisfied himself with the valuation of Ms. Haartz’s and Mr. Davis’ stock as conveyed by the
accountants for the Haartz Corporation. Mr. Landry conversed with Mr. Concannon but raised
few issues. He reviewed red-lined versions of drafts he received from Bingham and did minimal
research. He attended a meeting at Bingham McCutchen on January 8, 2002 and the closing the
following day. Mr. Landry did little and accomplished almost nothing – and none of the issues
Mr. Landry kept no time records and while his memory of the extent of his efforts is
spotty, clearly his efforts were not taxing. Yet for those efforts, Mr. Landry seeks a total of more
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As Mr. Landry testified, to represent Ms. Haartz and Mr. Davis in the sale of their stock
to Haartz Corporation, he was not precluded from doing other work on behalf of other clients.
Mr. Landry is unaware of the fee customarily charge in his geographical area of practice.
Clearly, a great deal of money was involved in the redemption of Ms. Haartz’s and Mr.
Davis’ stock by the Haartz Corporation. Mr. Landry understood prior to the Contingent Fee
Agreement that the stock may have been worth between $30,000,000 and $40,000,000. While
the trust Ms. Haartz and Mr. Davis administered received $17,882,100 for the stock, it cannot be
said that the price paid, or to be paid by Haartz Corporation in installments, was not substantial.
However, despite the arguably large sum of money involved, the results Mr. Landry
achieved were unremarkable. He negotiated only two small changes in the only document the
parties negotiated.
Neither Ms. Haartz nor Mr. Davis imposed any time limitations on Mr. Landry.
6. Nature and length of the Professional Relationship Between Ms. Haartz, Mr. Davis
and Mr. Landry
The parties enjoyed a long-term (albeit undistinguished) relationship, during which Mr.
Landry handled several varied and relatively small matters for Ms. Haartz and Mr. Davis.
At the time of the Contingent Fee Agreement, Mr. Landry had little experience and only
corporate lawyers was non-existent and he is not rated in publications such as Martindale-
Hubbell.
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8. Whether the Fee was Fixed or Contingent
The fee was contingent; however, Mr. Landry’s purported grounds for employing a
contingent fee agreement are vacant. Most notably his contention that he believed litigation
might have been necessary to force the Haartz Corporation to purchase Ms. Haartz’s and Mr.
Davis’ Stock is without merit because the well-established law in Massachusetts is that “[i]n the
absence of an agreement among shareholders or between the corporation and the shareholder, or
a provision in the corporation’s articles or organization or by-laws, neither the corporation nor a
majority of shareholders is under any obligation to purchase the shares of minority shareholders
when minority shareholders wish to dispose of their interest in the corporation.” Goode v. Ryan,
In sum, none of the factors enunciated by the Supreme Judicial Court militate in favor of
Mr. Landry. Applying each of them suggests that Mr. Landry cannot justify the fee he is
attempting to extract for the sale of Ms. Haartz’s and Mr. Davis’ stock to the Haartz Corporation.
Mr. Landry expended little effort on the matter, and it involved no novel or difficult questions.
He was not precluded from doing other work, and while the amount involved was substantial, the
results Mr. Landry obtained were at best minimal. Ms. Haartz and Mr. Davis put no limits on
Mr. Landry’s time, and while Ms. Haartz and Mr. Davis had utilized Mr. Landry’s services for a
number of years, nothing about the relationship suggests that because of it, Mr. Landry should be
entitled to mark up the value of his services. Lastly, Mr. Landry had no particular experience,
reputation or ability in the area in which he was representing Ms. Haartz and Mr. Davis.
B. Mr. Landry Breached his Contract with Ms. Haartz and Mr. Davis
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Regardless of how one construes it, the Contingent Fee Agreement unequivocally
conveyed that Mr. Landry’s fee in this instance was to be “reasonable” and no more than 1.5% of
the amount paid to Ms. Haartz and Mr. Davis. However, Mr. Landry is now attempting to extract
from them the full 1.5% of that which Ms. Haartz and Mr. Davis have received (including
interest paid to them). Without doubt and without justification, Mr. Landry has breached his
contract with Ms. Haartz and Mr. Davis by seeking payment of 1.5% of that which they have
C. Mr. Landry also Breached the Covenant of Good Faith and Fair Dealing
When the parties executed the Contingent Fee Agreement, Mr. Landry simply inquired of
Ms. Haartz and Mr. Davis whether or not they had any questions about the agreement. As Mr.
Landry recalls it, when neither Ms. Haartz nor Mr. Davis had any questions, the parties
Mr. Landry’s failure to adequately explain the Contingent Fee Agreement and his
expectation of fees in excess of $300,000 regardless of the amount of effort he put into the stock
transaction manifests an absence of good faith and fair dealing. Mr. Landry’s assertion that he is
due a full one and one-half percent of what has been paid to Ms. Haartz and Mr. Davis, despite
the clear language in the Contingent Fee Agreement to the contrary, manifests and underscores
his violation of the implied covenant of good faith and fair dealing.
There is a case and controversy between Ms. Haartz and Mr. Davis, on the one hand, and
Mr. Landry, on the other hand. Ms. Haartz and Mr. Davis have an interest in the controversy and,
given Mr. Landry’s position with regard to fees he believes Ms. Haartz and Mr. Davis owe him,
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He also breached the Contingent Fee Agreement in that the valuation work on behalf of Ms. Haartz and Mr.
Davis was done by Howard Gordon while the Contingent Fee Agreement called upon him to do that work.
Moreover, the Defendants - not Mr. Landry - paid Mr. Gordon’s fees.
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this matter is ripe for declaratory relief. Because Mr. Landry has violated Massachusetts Rules
of Professional Conduct 1.5 and has breached his contract with Ms. Haartz and Mr. Davis
(including the covenant of good faith and fair dealing), declaratory judgment in favor of Ms.
By charging a clearly excessive fee, Mr. Landry’s conduct violated Rule 1.5 of the
and by making no real effort to explain the Contingent Fee Agreement to Ms. Haartz and Mr.
F. Remedy
Respectfully submitted,
By their attorneys,
___________________________________
Richard D. Glovsky, Esq. (BBO# 195820)
Joshua A. Lewin, Esq. (BBO# 658299)
Prince, Lobel, Glovsky & Tye LLP
100 Cambridge St., Suite 2200
Boston, MA 02114
(617) 456-8000
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CERTIFICATE OF SERVICE
______________________________
Richard D. Glovsky
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