Kirsner v. Fleischmann

Digges, J., delivered the opinion of the Court. This dispute is over a problem as ancient as the practice of law: the payment of attorney fees. The disgruntled client and appellant is Milton F. Kirsner, who is himself a member of the bar, although he is now primarily active in the real estate business. He appears in this case individually and as president of twenty corporations (also appellants) in which he is sole or principal stockholder.

He and his corporations were made defendants in the present action for resisting the appellees’ attempts to col ¹⁶⁶ lect a $38,497.65 contingent fee for their services in a tax case. Appellee Fleischmann is a tax attorney, while appellees Sigel and Felcher were Kirsner’s own Certified Public Accountants. Silber, who is both an accountant and attorney, entered the case at Fleischmann’s request as his co-counsel. Together the appellees sought to obtain summary judgment for the claimed amount (plus interest) in the Superior Court of Baltimore City.

The trial judge, Howard, J., granted their motion on the ground that there was nothing before him which “created a genuine dispute of any material fact in this case.” We are in complete agreement with this observation. The memorandum of the contract which brought this case into being was dated July 26, 1966 and was subsequently filed as an exhibit in the appellees’ motion for summary judgment. It reads as follows: Dear Mr. Fleischmann: This letter is to confirm our oral understanding authorizing you to act as attorney on my behalf and on behalf of each of the corporations, listed' on the schedule attached (each of which I am the president and the officer authorized to act), in connection with the income tax problem and Internal Revenue Service audit dated June 29, 1966, jointly with Myer Louis Sigel and Bernard Felcher, my accountants. You will be paid the sum of Seven Thousand Five Hundred Dollars ($7500) in retainer fees and fifteen per cent (15%) of all savings on taxes, penalties and interest resulting to these corporations and to me when compared to the audit dated June 29, 1966. /s/ Milton F. Kirsner, Individually and on behalf of said corporations On April 29, 1969 Fleischmann and Silber informed Kirsner in a letter (included as an exhibt in Kirsner’s op ¹⁶⁷ posing affidavit) that they had secured an offer from the Internal Revenue Service which reduced the claimed tax deficiency of $346,399.82 to $172,050.02. 1 In that letter they took cognizance of Kirsner’s long illness and his strong reluctance to “aggregate” the corporations’ incomes for tax purposes.

They pointed out that nevertheless this was an “eminently reasonable and fair” offer, which Kirsner did not have to accept, but if he did not accept, they were prepared to strike their appearance as counsel. Fleischmann and Silber also made it clear that in their opinion the 15% counsel fee had been completely earned. Sigel and Felcher concurred in this letter. Although Kirsner now claims that letter amounted to an abandonment of the contract, he ultimately accepted the offered savings.

On July 1, 1969, Judge Sterett of the Tax Court of the United States placed his signature on seventeen consent decrees resulting in the indicated tax saving for the corporations and, as president of the real estate companies involved, Kirsner signed an assenting stipulation which appeared on each decree. By August 1, 1969 Kirsner attempted to repudiate these settlements, causing Fleischmann and Silber to withdraw from the ¹⁶⁸ case. The appellant obtained a new attorney who filed a motion in the United States Tax Court to have the consent decrees vacated. This request was denied and although it is still pending in the United States Court of Appeals for the Fourth Circuit (it had not been terminated as of the filing date of this opinion), the appellees successfully pressed on with their claim for the contingent fee.

On appeal from the judgment ordering him to pay the contingent fee, Kirsner has attacked every aspect of the transaction with the appellees, asserting that the pleadings, affidavits, exhibits and testimony raised material issues of fact which should have prevented summary judgment as a matter of law. The following list should suffice to show the breadth of his attack. 1. The contract was ambiguous, thus necessitating an evidentiary hearing to determine the intent of the parties. 2. The contingent fee sought was unconscionably high, and the fee arrangement was illegal. 3.

The Tax Court case has not yet been terminated and hence the performance required by the contract has not yet been completed. 4. The appellees had abandoned their employment under the contract. 5. Neither Silber nor Felcher nor Sigel was a party to the contract. 6. The fee obligation was several not joint, and should have been computed on a quantum meruit basis rather than on the agreed percentage, and 7.

The trial court erroneously decided contested issues of fact, instead of simply ascertaining if such issues existed. Maryland Rule 610 (d) 1 provides that in a motion for summary judgment: “The judgment sought shall be rendered forthwith if the pleadings, depositions, and admis ¹⁶⁹ sions on file, together with the affidavits, if any, show that there is no genuine dispute as to any material fact and that the moving party is entitled to a judgment as a matter of law.” As Judge Singley, speaking for the Court in Lipscomb v. Hess, 255 Md. 109, 118 , 257 A. 2d 178 (1969), has noted: “The limitations on summary judgment procedure are too well known to require elaboration. It is not a substitute for trial but a hearing to determine whether a trial is necessary, Whitcomb v. Horman, 244 Md. 431 , 224 A. 2d 120 (1966) ; Strickler Engineering Corp. v. Seminar, Inc., 210 Md. 93 , 122 A. 2d 563 (1956), when there is no genuine controversy, Pullman Co. v. Ray, 201 Md. 268 , 94 A. 2d 266 (1953). The purpose of the hearing is not to determine disputed facts, but to determine whether such issues exist.

Horst v. Kraft, 247 Md. 455 , 231 A. 2d 674 (1967) ; Carroccio v. Thorpe, 222 Md. 38 , 158 A. 2d 660 (1960) ; Tellez v. Canton R.R. Co., 212 Md. 423 , 129 A. 2d 809 (1957) ; White v. Friel, 210 Md. 274 , 123 A. 2d 303 (1956). If facts are susceptible of more than., one inference, the inferences must be drawn in the light most favorable to the person against whom the motion is made, Lawless v. Merrick, 227 Md. 65 , 175 A. 2d 27 (1961), and in the light least favorable to the movant, Howard Cleaners of Baltimore, Inc. v. Perman, 227 Md. 291 , 176 A. 2d 235 (1961) ; Roland v. Lloyd E. Mitchell, Inc., 221 Md. 11 , 155 A. 2d 691 (1959).” See also Shatzer v. Kenilworth Warehouses, Inc., 261 Md. 88 , 274 A. 2d 95 (1971) and Brown v. Suburban Cadillac, Inc., 260 Md. 251 , 272 A. 2d 42 (1971). Viewing the appellants’ attempted defense to the granting of summary judgment, we have concluded that their various allegations do not reveal the presence of a genuine ¹⁷⁰ controversy of any material fact. For convenience we shall refer to Kirsner and the corporations he represents in the singular person.

Kirsner’s first assertion, which challenges the clarity of the contract, appears to focus on the same questions he raises in points three and five, which are concerned with when payment was due and who was to be paid. We shall deal with each of these matters separately. Payment under the contract was clearly to-be preceded by performance. Whether performance was completed may or may not be related to the termination of the tax case.

Whatever relationship exists between these closely intertwined questions, we think the ultimate result is frankly a matter of legal deductions from undisputed facts that have no controverted secondary factual inferences. See Fenwick Motor Co. v. Fenwick, 258 Md. 134, 138-39 , 265 A. 2d 256 (1970). Kirsner, acting individually and on behalf of his corporations, has never denied that he affirmatively assented to the decrees. Nor does he challenge the legal effect of his acceptance of the tendered performance of the contract.

Kirsner had at least two major objections to the appellees’ handling of the case, namely, their inability to avoid aggregating the corporations’ incomes