Opinion
December 2, 1953 —
December 30, 1953.
APPEAL from an order of the circuit court for Milwaukee county: JOHN C. KLECZKA, Circuit Judge. Modified and, as modified, affirmed.
For the appellant there were briefs by Fairchild, Foley Sammond and Joseph E. Rapkin, Marvin E. Klitsner, and Harrold J. McComas, all of Milwaukee, and oral argument by Mr. Klitsner.
For the respondent there was a brief and oral argument by Howard G. Brown of Milwaukee.
APPEAL from an order of the circuit court for Milwaukee county: FRANCIS X. SWIETLIK, Circuit Judge. Not determined.
Proceeding by appellant to determine attorney's fees due respondent upon the substitution of a successor attorney. The first appeal is from the order of Judge KLECZKA, dated December 31, 1952, determining fees. The second appeal is from an order by Judge SWIETLIK, dated June 26, 1953, denying appellant's motion to vacate the KLECZKA order.
Froedtert Grain Malting Company, Inc., hereinafter called the "corporation," employed respondent Saltzstein from year to year as general counsel under a series of resolutions adopted annually by the corporation's board of directors and reading as follows:
"Resolved, that Benjamin F. Saltzstein shall receive compensation as legal counsel commencing as of September 20, 1941, at the annual fee of $5,000 payable in equal monthly instalments. Said annual fee being exclusive of additional charges for any (1) out-of-pocket expenditures, (2) court appearances within or without Milwaukee county, Wisconsin, and (3) consultations and conferences without Milwaukee county, Wisconsin, in connection with company matters."
For several years Saltzstein performed the usual services of general counsel and also actively represented the corporation as attorney in a number of litigated disputes. In at least two such matters Saltzstein submitted bills to the corporation which included charges for office work as well as his physical presence before the court and the corporation paid him.
In 1943 Saltzstein resigned as general counsel and his resignation was accepted in a letter which expressed the corporation's wish that he would continue as attorney to complete such matters as he was then handling. There were then at least three pending suits, known for convenience as the Federal Trade case, the Froemco case, and the present action, referred to as the Woboril case. Saltzstein had sent bills to the corporation for services and disbursements in the first two matters which have not been paid.
The appellant later found it desirable to engage other counsel in the Woboril case but Mr. Saltzstein declined to deliver the pertinent papers to his successor unless a bill of $504.20 which he submitted as final charges in that matter should first be paid. The corporation concedes that it is liable for the disbursements and for reasonable charges for work actually performed in the courtroom, but insists that work done by Mr. Saltzstein, or by his associates under his direction, outside the courtroom has been paid for under the retainer agreement. The latter services make up much the greater part of the bill. Appellant and respondent were unable to agree in their interpretations of the retainer and the corporation cited Saltzstein to show cause before the circuit court why he should not be required to deliver to the corporation all the papers in his possession relating to the Woboril action and to consent to the substitution of Miller, Mack Fairchild, attorneys, in his stead. The petition on which the citation was based asked the court to adjudicate Saltzstein's claims for all legal services which he had performed for the corporation and for which he had not been paid. Mr. Saltzstein filed an affidavit in which he pointed out that the substitution related only to the Woboril case and objected to the court's consideration of any fees or services not connected with it. A hearing was held before Judge KLECZKA on or about May 2, 1946, after which the court took the matter under advisement. It was not until December 31, 1952, just before Judge KLECZKA retired from office, that he filed a memorandum decision and an order which provides:
"It is hereby ordered that Attorneys Miller, Mack Fairchild be substituted in place and stead of Benjamin F. Saltzstein as attorney for the plaintiff upon the payment to him of the sum of $3,000."
The memorandum shows that Judge KLECZKA fixed the sum of $3,000 by reason of a letter which the corporation wrote to Saltzstein making an offer of $3,000 in compromise and settlement of Saltzstein's bills in all matters totaling $7,174.95.
Judge SWIETLIK succeeded Judge KLECZKA as judge of Branch 6 of the circuit court for Milwaukee county and the corporation promptly applied to him for an order vacating the previous order. Judge SWIETLIK concluded that he did not have jurisdiction to entertain such a motion and therefore entered an order denying it.
The corporation has appealed from both orders. Further facts will be stated in the opinion.
Because of the decision we have reached upon the appeal from the order made by Judge KLECZKA, it is unnecessary to decide the questions raised by the appeal from the order of Judge SWIETLIK.
The petition of the corporation that the court order a substitution of attorneys in the Woboril case upon proper terms recited that Mr. Saltzstein claimed that fees were due him for work done in other matters and suggested that the issues in those matters could be disposed of at the same time as Saltzstein's Woboril fees. Mr. Saltzstein's counteraffidavit opposed the inclusion of such other matters and he insisted vigorously upon the hearing that the Federal Trade and Froemco matters be excluded from consideration in this proceeding. The record shows that the court agreed with him and the issue actually tried concerned only the compensation Mr. Saltzstein should have for services rendered in re Woboril upon his replacement by other attorneys in that action. He claimed he was entitled to $504.20. The order, entered six and one-half years after the hearing, by title referred only to the suit of the corporation against Woboril and granted the substitution upon payment to Saltzstein of attorney's fees of $3,000. It does not refer to any matters other than the Woboril action, though the court's memorandum makes clear that this sum was to compensate Mr. Saltzstein for his services in the other two matters. No substitution in such cases had been asked nor does the order direct it.
Respondent Saltzstein urges now that the issues were broadened on the hearing and all disputes over fees in all pending cases were litigated. The record does not support the argument and he concedes that the bill of exceptions, certified by the trial judge, contains no reference to such broadening. He contends, however, that the trial judge as well as himself so remember it. We are not surprised that appellant's recollection is just the other way. After so long an interval between hearing and decision it is not to be expected that interested parties would have the same memories. We consider that we are confined to the record and must take it as we find it. That does not enlarge the issues to include anything except a substitution of attorneys in the Woboril action and the appropriate fee to be paid Mr. Saltzstein in that case before he should be required to surrender its files to the substituted attorneys. It is evident, then, that the order in so far as it allows a fee of $3,000 for services in three cases cannot stand. Nor, of course, does the evidence support such a sum in the Woboril matter alone.
It is due the distinguished trial judge to say that during the long time this matter was under advisement he was in poor health, directly attributable to overwork, so serious as finally to cause him to retire from judicial labors. Because of this retirement we have an unusual situation. Ordinarily after pointing out errors which we consider have been committed and suggesting corrections, we would remand the record for further proceedings before the same judge, but that judge is not now in office. Such proceedings before his successor would require his original study of the record which seems to us an unnecessary burden to impose on him since we have already been compelled to study it and feel as competent to handle here the questions of law and fact which the appeal presents as any trial judge would be who, like ourselves, did not have the advantage of hearing and seeing the witnesses.
The first question deals with an interpretation of the retainer, particularly, whether or not the annual payment of $5,000 is compensation for services rendered in matters in which litigation has been commenced and such services consist of preparation or negotiation and are not performed in the courtroom. No absolute rule of law can be relied on to determine this question. We are confronted by a contract on which the parties disagree, and the "court appearances" which the stipulated fee does not pay for may be interpreted to mean either (1) only those when counsel is physically present in court, or (2) services in all matters which have got into court and the client "appears by his attorney" or the attorney "appears for the client," although such appearance may be documentary, as by complaint or answer or retainer served and filed. The intent of the parties must govern and the problem of the court is to find that intent if the parties later disagree concerning it. We observe that in a litigated matter which is referred to in the testimony as the Adams case Saltzstein rendered a bill very similar to the one in dispute here, setting forth many services rendered in the office rather than in court. No specific charges were set down for individual services nor was a total computed. Mr. Saltzstein and Mr. Froedtert conferred about the bill and Mr. Froedtert, president of the corporation, set down a total of $2,500 at the foot of the bill, which was satisfactory to Mr. Saltzstein, and the corporation paid him that amount. Mr. Saltzstein testified that he considered the bill was thus honored and paid. Mr. Froedtert testified that he thought the retainer fee had paid the bill but the work was well done and he felt like making Saltzstein a present. The bill was paid with company money and we find no corporate action authorizing Mr. Froedtert to make gifts on its behalf. We must hold that the Adams bill was paid, rather than that there was a gift which left the bill undisposed of. We consider this incident was an interpretation by the parties themselves showing their intent that "court appearances" include services rendered in the office, or otherwise out of the courtroom, in matters where the corporation has appeared by counsel in controversies pending in court.
The learned trial court was correct, therefore, in determining that Mr. Saltzstein's services, as itemized in the bill he submitted to the corporation, had not been paid for by the sums he received on the retainer.
The corporation submits that during the time that the trial court had the appellant's petition under advisement the corporation settled its dispute with Woboril and informed the trial court of this fact. The trial judge's memorandum shows he was so informed. Appellant argues from this that the controversy had become moot, wherefore no order should have been entered in the circuit court and we ought to withhold any decision now. The argument seems to be based on the proposition that, the case being settled, appellant is under no compulsion to pay anything to Mr. Saltzstein as terms for acquiring new, unnecessary counsel, in a matter which no longer interests appellant. We cannot agree that the settlement of the parent dispute makes moot the present controversy. For one thing, the Woboril action has not been dismissed and the existence of counsel for the corporation, if only to receive notice of a motion to dismiss, if not indispensable, is highly desirable for a disposition by the court of that lawsuit. More important is the view we take of appellant's procedure in the substitution matter. It applied to the court to set terms on which new counsel should be substituted for old. We cannot consider this to be a proceeding whereby the client may find out what it will cost to get another attorney, with an option to drop the matter and keep the lawyer it already has if the replacement price seems too high. We regard the application as a consent by the petitioner to be bound by the court's determination (within the limits of judicial discretion and subject to appeal) and to pay such amount as the court may order, in like manner as the unwanted attorney must surrender the client's papers and get out of the case upon receiving payment so ordered. When the client has applied to the court for such relief we conclude that it cannot, without consent of the attorney, make moot this particular controversy by a settlement of the principal action or, for other unilateral reasons, abandon, to the attorney's prejudice, its effort to procure a substitution. The court may still proceed to a determination of the terms of substitution and its order, within the limits aforesaid, binds the client to compliance.
The real controversy here concerned the question of whether the services, for which Mr. Saltzstein billed the corporation, were paid for by the compensation he received under the retainer and there was not much contest over the value of the services if the retainer payments were not applicable to them. We have examined the record bearing on the services performed and have concluded that, under the conditions of the action in which they were rendered, $500 for services, plus $4.20 disbursements, is reasonable compensation and that the substitution of attorneys should have been ordered on the payment of that amount by the corporation to Mr. Saltzstein.
By the Court. — Order dated December 31, 1952, modified to provide payment by appellant to respondent of $504.20 rather than $3,000, and, as so modified, affirmed. Record remanded for further proceedings consistent with this opinion. No costs to be taxed by either party. Respondent is to pay the clerk's fees.