Opinion
No. CV 03 0102568S
October 21, 2005
MEMORANDUM OF DECISION
The plaintiff, Schnader Harrison Segal Lewis, LLP ("Schnader Harrison"), a law firm, seeks to recover for legal services rendered to the defendant, John H. Baxter, by lawyers in its New York office. The services were tendered during the period from December 3, 1997 to January 7, 1999 by M. Christine Carty, managing partner of Schnader Harrison's Manhattan office, in the area of employment law and by other members of that office in estate planning and real estate.
As of December 31, 2002 the amount of $45,330.79 was reflected on the invoices of Schnader Harrison as due and owing from Baxter. After receiving a demand for payment in 2003, Baxter paid $4,941.86 due to Schnader Harrison, leaving a balance due for legal services of $40,380.13.
There was no evidence that Baxter ever complained about the quality of the plaintiff's legal services until February 12, 2004 when he filed a Counterclaim in this action in which he alleged that the plaintiff committed malpractice when it negotiated a termination agreement between Baxter and his former employer, Wheat First Butcher Singer, Inc ("Wheat First"), and failed to include in that agreement a clause precluding Wheat First and any of its employees from "discussing any of the terms and conditions of the termination of Mr. Baxter."
Attorney Carty of Schnader Harrison first met Baxter in August of 1997 through one of the other partners in the firm, Thomas Marshall. At that time Baxter told her that he was having employment issues with his employer, Wheat First. In October 1997 Baxter asked Attorney Carty to negotiate a separation agreement with the attorneys for Wheat First.
Attorney Carty negotiated the separation agreement which was signed by Baxter and Mark Gambill of Wheat First on November 5, 1997. That agreement provided that Wheat First would pay Baxter severance pay in the CT Page 13940-de amount of $860,388 and that Wheat First would forgive a loan it made to Baxter in the amount of $150,000. It further provided that, "[u]pon written request, Wheat will provide a reference letter to prospective employers, stating your dates of employment, annual salary, and the fact that you resigned as an employee of Wheat in good standing."
After leaving Wheat First Baxter obtained a position as president of Ladenburg Thalmann Co., Inc. a broker-dealer and investment advisory firm in New York City at a base salary of $600,000 per year. Baxter commenced work at Ladenburg Thalmann as of January 1, 1998. However, within several months Baxter requested that Attorney Carty assist him in negotiating a separation agreement with Ladenburg Thalmann.
Baxter testified that his job with Ladenburg Thalmann ended because someone from Wheat First made false and disparaging comments about him. He blamed Attorney Carty for the termination of his employment by Ladenburg Thalman and his inability to obtain any other employment thereafter. According to Baxter, all of these negative consequences flowed from Attorney Carty's failure to include a "non-disparagement clause" in Baxter's separation agreement with Wheat First.
This allegation is not contained in the Counterclaim, but came into evidence without objection.
The defendant argues that the First Count of the Complaint is barred by the statute of Limitations contained in Connecticut General Statutes § 52-581, which provides:
No action founded upon any express contract or agreement which is not reduced to writing, or of which some note or memorandum is not made in writing and signed by the party to be charged therewith or his agent, shall be brought but within three years after the right of action accrues.
The plaintiff argues that the First Count is governed by Connecticut General Statutes § 52-576, which provides that "[n]o action for an account, or on any simple or implied contract, or on any contract in writing, shall be brought but within six years after the right of action accrues." The Supreme Court has explained the difference between § 52-576 and § 52-581 as follows:
If [General Statutes] §§ 6005 [now § 52-576] and 6010 [now § 52-581] are to be construed to make a harmonious body of law, it is necessary to restrict the latter . . . to executory contracts. Section [52-576] limits to six years actions on simple, that is parol, contracts; § [52-581] limits to three years CT Page 13940-df actions on contracts not reduced to or evidenced by a writing, that is, contracts resting in parol; and unless the latter is intended to apply only to executory contracts there would be different limitations established for actions of the same type, that is, those on parol contracts, a result which the legislature could not have intended.
Citation omitted; emphasis added; internal quotation marks omitted.) Tierney v. American UrbanCorp., 170 Conn. 243, 248, 365 A.2d 1153 (1976).
In John H. Kolb Sons, Inc. v. GL Excavating, 76 Conn.App. 599, 610, 821 A.2d 774 (2003), the Appellate Court held that the amount due on account for insurance provided was covered by the six-year statute of limitations of § 52-576 because the plaintiff had performed all of its contractual obligations fully by obtaining the insurance on behalf of the defendant. In this case, the plaintiff has performed all that it was required to do under its contract to provide legal services to Baxter. Therefore, the six-year statute of limitations applies. The plaintiff last performed services in January 1999. This action was commenced in October 2003, well within the limitations period.
The plaintiff argues that the Counterclaim is barred by the statute of limitations, Connecticut General Statutes § 52-577, which requires that an action for legal malpractice be brought within three years of the action complained of. The alleged malpractice of Attorney Carty took place no later than November 5, 1997, the date on which the separation agreement was signed by Baxter and Wheat First. The Counterclaim was not filed until February 12, 2004, well beyond the three-year limitations period and is, therefore, barred by § 52-577.
Even if it were not barred by the statute of limitations, the Counterclaim would fail for a number of reasons. First, Baxter did not have an expert witness who testified that Attorney Carty violated any standard of legal practice when she did not include a non-disparagement clause in the separation agreement. Attorney Carty testified that she attempted to have such CT Page 13940-dg clause included in he agreement, but Wheat First would not agree to it. Baxter had time to review the separation agreement and, therefore, knew or should have known that it did not contain a non-disparagement clause before he signed it.
Second, contrary to Baxter's contentions, there was no evidence that Baxter lost his job with Ladenburg Thalmann due to any disparaging comments made by anyone from Wheat First. A complaint filed against Baxter by Ladenburg Thalmann in New York Supreme Court alleged the following concerning the reasons for his termination:
In deciding to hire Baxter, Ladenburg reasonably relied upon Baxter's representations during the interview process concerning his education, employment history, experience in the financial services industry and possession of the requisite securities industry registrations. Shortly after Baxter commenced employment at Ladenburg, however, it became painfully obvious that Baxter did not possess the expertise necessary to perform the duties required of his new position as president. Having thus perceived that Baxter had not been completely forthright in the application process, Ladenburg commenced an investigation into Baxter's background which revealed that Baxter had made material misrepresentations to Ladenburg, on his resume and on his CRD (a form maintained by the NASD in its Central Registration Depository which lists the registrations and employment history of persons registered with the NASD).
. . .
During an interview with Ronald Kramer, the Chairman of Ladenburg, Baxter represented that he held both an undergraduate and a master's degree in business from Columbia University. Upon information and belief this representation was false. Baxter never received any degree, either undergraduate or graduate, from Columbia University. In fact, Baxter does not hold a four-year undergraduate degree or a graduate degree from any university.
CT Page 13940-dh
Baxter admitted that he attended Columbia University for an unspecified period of time, but did not graduate from that university with either an undergraduate or master's degree. Thus, at least one of the reasons for Ladenburg's termination of Baxter was his lack of education.
The complaint against Baxter by Ladenburg Thalmann alleges that Baxter would not allow it to contact Wheat First about his employment or employment history and that it obtained the information about Baxter though an independent investigation. This leads to the third problem with Baxter's Counterclaim: If someone from Wheat First had advised Ladenburg Thalmann that Baxter had no degree from Columbia University, would that truthful statement violate the non-disparagement clause? While Baxter did not explicate the parameters of the non-disparagement clause at issue, it is reasonable to assume that in order to violate such a clause, Wheat First would have had to make a false, disparaging statement about Baxter, not a true statement, before the clause became actionable.
Finally, there was no proof of any causal correction between the alleged negligence of Attorney Carty and Baxter's employment problems. The gravamen of Baxter's Counterclaim was that his position with Ladenburg Thalmann was terminated and all future job opportunities were ruined because some person from Wheat First made false disparaging comments about him. However, the presence of a non-disparagement clause in the separation agreement with Wheat First would not have prevented someone at Wheat First from making disparaging comments about Baxter. Likewise, the absence of such a clause did not prevent Baxter from seeking damages from Wheat First for the alleged ruination of his life in an action for libel or slander. Moreover, the language of the separation agreement negotiated by Attorney Carty greatly limited the scope of Wheat First's communications to prospective employers. By providing more than that limited information, i.e., disparaging information, Wheat First probably would have violated the terms of the separation agreement. Yet there was no evidence that Baxter brought an action against Wheat First for such violation or for libel or slander.
The court finds that the plaintiff did perform legal services for the defendant for which he has not paid and that the amount charged for those services is reasonable. Judgment may enter on the First Count of the Complaint in favor of the plaintiff in the amount of $40,380.13.
The Second Count alleges Unjust Enrichment. Unjust enrichment is a legal doctrine to be applied when no remedy is available pursuant to a contract. United Coastal Industries, Inc. v. Clearheart Construction Co., 71 Conn.App. 506, 512, 802 A.2d 901 (2002). As the court has found or the plaintiff on the First Count for breach of contract to pay CT Page 13940-di for legal services, the court cannot find in favor of the plaintiff on the Second Count.