Opinion
Rehearing Denied April 23, 1970.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 903
Albert B. Wolf, Denver, for plaintiff in error.
Akolt, Shepherd & Dick, Laurence W. DeMuth, Jr., Denver, for defendants in error.
COYTE, Judge.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.
The parties will be referred to as they appeared in the trial court or by name. Plaintiff in error was defendant below.
The essential facts in this case are these: In 1961 defendant requested plaintiff Barnhill to complete a Torrens title registration suit started for him by another attorney. By letter agreement dated November 6, 1961, Barnhill agreed to represent defendant through the Federal District Court to judgment for a fee of $5,000.00; the agreement providing in part:
'* * * I have agreed to handle the matter through the District Court for you for the sum of $5,000.00, plus expenses, with the understanding that if at any time prior to trial it becomes evident that, for reasons presently unforeseen, the action will be protracted beyond our present anticipation, further negotiations regarding an additional fee may be had; * * *'
The agreement also provided that the fee for the services of Moran, who was to assist Barnhill in the prosecution of this suit, were included in the $5,000.00 figure. The $5,000.00 fee was paid by 1962.
On July 20, 1962, Barnhill wrote defendant in part as follows:
'* * * In any event, I feel that I should advise that I cannot afford to proceed with this case and to devote to it the time it would require without adequate compensation. Because of the change in circumstances and the developments in this case, Our original understanding is no longer applicable and I request that you deposit additional funds as a retainer against which we can work. * * *' (Emphasis supplied.)
An exchange of correspondence resulted, with Barnhill taking the position that unless defendant agreed to a new arrangement, he would withdraw from the case.
A new letter of understanding was written by Barnhill to Taylor on August 24, 1962, which provided in part as follows:
'In order that no misunderstanding exist, we request that the following arrangement govern our work throughout the remainder of the action. You will be charged on an hourly basis for work actually performed and on a daily basis for Court appearances. * * *'
Mr. Barnhill testified as follows:
'Well, on July 20, I wrote to Mr. Taylor, telling him that because of the changes in circumstances and developments in the case that our original understanding was no longer applicable.'
Defendant acceded to this demand and agreed to pay 75 percent of each bill as submitted retaining 25 percent until conclusion of the case. However, there was never an agreement as to the exact amount to be paid either on an hourly or per day basis. Over the next 18 months four bills totaling $8,000.00 were submitted to defendant, who paid 75 percent, or $6,000.00. Defendant refused to pay a fifth bill for $1,000.00. Plaintiffs then withdrew from the case and submitted a final bill for the $2,000.00 withheld and $852.80 final bill for time and expenses to date of withdrawal.
Shortly thereafter this action was initiated by plaintiffs for recovery of the $2,000.00 retained by defendant on the first four bills, as well as $852.80 unpaid on the fifth bill. Defendant generally denied liability and filed a counterclaim claiming a refund of the $6,000.00 paid plaintiffs in excess of the original contract price, and a rebate of part of the original $5,000.00 paid for work not completed and for damages allegedly sustained as a result of plaintiffs' failure to have concluded the suit promptly.
Trial was to a jury. At the conclusion of the evidence, after both parties had rested, the trial judge dismissed the jury and granted plaintiffs' motion for a directed verdict on all issues.
Although numerous grounds of alleged error are presented to this court on appeal, the basis of each is that the trial judge committed reversible error in not submitting the case to the jury.
It is plaintiffs' theory that insofar as the four bills totaling $8,000.00 were concerned, an account stated existed by reason of the fact that defendant paid 75 percent of these bills, and therefore, defendant cannot now deny liability for this amount. It is further asserted by plaintiffs that no error was committed by the trial judge is awarding the plaintiffs the $852.80 demanded in the fifth bill, since there was testimony that this was a fair and reasonable amount for the services rendered, and there was no evidence to contradict this testimony.
In order to constitute what is known as an account stated, certain elements are necessary, among which is the requirement that the apparent debtor assent to the validity of the bill presented and promise to pay the balance to the creditor. If the apparent debtor has never agreed to the amount allegedly owed, there cannot be an account stated. Polichio v. Oliver Well Works, Inc., 147 Colo. 158, 159, 362 P.2d 1056; Mace v. Spaulding, 110 Colo. 58, 130 P.2d 89.
Based on the record before us, it cannot be said that defendant admitted his liability on the account, or accepted as correct the bills submitted him. it was defendant's testimony that he questioned every billing and that he agreed to pay these additional sums demanded only out of fear that plaintiffs would withdraw from the case and that he would lose the money already paid. There is no evidence that defendant admitted his liability for this extrasum or assented to the validity of the agreement. In fact, quite the contrary is true. Without such admission there cannot be an account stated.
Plaintiffs' claim is based upon a fee arrangement entered into several months after the attorney-client relationship had been established. Once such an attorney-client relationship has been established, stringent rules govern the conduct of an attorney in seeking compensation. The attorney in such cases has the burden of proving that any agreements subsequently entered into concerning fees are fairly and openly arrived at, and that the services performed are reasonably worth the fee charged. Bryant v. Hand, 158 Colo. 56, 404 P.2d 521; Rupp v. Cool, 147 Colo. 18, 362 P.2d 396.
Involved herein is a dispute over the reasonable value of plaintiffs' services. It is not necessary to discuss whether the services were performed under the original contract as modified or a totally new agreement. In either case the burden is upon the attorneys to prove that the arrangements were fairly and openly arrived at and to prove the reasonable value of the services rendered. These are questions of fact to be determined by the jury. It was error for the court to invade the province of the jury and direct a verdict for plaintiff. Hilzer v. MacDonald, Colo., 454 P.2d 928.
There was no evidence to support defendant's claim for damages for delay in completing the litigation and no evidence to support his claim for a refund of a portion of the $5,000.00. Accordingly, the court properly directed a verdict against defendant on these items of defendant's counterclaim.
We reverse and remand with directions that a new trial be held consistent with the views expressed herein.
SILVERSTEIN, C.J., and DWYER, J., concur.