LLC v. Jonathan Garcia (2012)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (No. 108)

The Motion For Summary Judgment now before the court presents an important question of professional responsibility.   Suppose that, during the attorney-client relationship, a client executes a promissory note for a sum certain payable to his attorney for the provision of legal services not yet fully rendered at the time of the note's execution.   Is the note enforceable in court?   For the reasons set forth below, the answer is a qualified Yes. But the matter requires close judicial scrutiny and should not be determined by way of summary judgment.

The submissions by the parties establish the following facts.   The plaintiff, LoRicco, Trotta & LoRicco, LLC, is a law firm.   Attorney Ronald L. LoRicco is a member of the firm.  (To avoid confusion, both the firm and the attorney will be referred to as “LoRicco”).

The defendant, Jonathan Garcia, is a former client of LoRicco.   Beginning in June 2008, LoRicco represented Garcia in four different criminal cases pending in the Superior Court for the Judicial District of New Haven at Meriden (G.A.7).

On December 17, 2008, while this representation was ongoing, Garcia signed two different documents drafted by LoRicco.

The first document, is entitled “Agreement To Provide Legal Services” (“Agreement”).

The title is something of a misnomer, since the Agreement was signed only by Garcia, the intended recipient of legal services and not by LoRicco, the intended provider of those services.   In the Agreement, Garcia agrees to employ LoRicco to represent him in his pending criminal actions in return for a “Retainer Fee, which is non-refundable, of $9,000.00.”   The Agreement refers to a “Promissory Note Attached,” which is the second document signed by Garcia on the day in question.¹

The “Promissory Note” (“Note”) recites that, “for value received,” Garcia promises to pay LoRicco “the principal sum of Nine Thousand & 00/100 ($9,000) Dollars with interest at the rate of Eight Percent (8%), from the date hereof, payable upon the unpaid balance ․ Such principal sum and interest shall be payable as follows:  On Demand.”

Both the Note and the Agreement state that they are secured by Garcia's interest in proceeds due and payable pursuant to an AIG Life Insurance Company Annuity Contract.

On February 27, 2009, Garcia pled guilty to some of the pending charges.   He was sentenced to a term of imprisonment on March 4, 2009.   He is presently incarcerated.

Despite LoRicco's demand, Garcia has made no payment on the Note.

LoRicco commenced this action against Garcia in October 2011.   His Complaint consists of a single count entitled “Action on a Note.” The Complaint alleges that Garcia executed the Note and has failed to pay the balance.

On December 19, 2011, the Industrial Acceptance Corporation (“IAC”) filed a Motion To Intervene.   The Motion claims that the insurance proceeds purportedly securing the Note are in fact payable to IAC pursuant to a separate promissory note and assignment.   The Motion To Intervene was granted on January 17, 2012.

On December 28, 2011, LoRicco filed the Motion For Summary Judgment now before the Court.   The Motion contends that LoRicco is entitled to judgment on the Note. The Motion was heard on March 19, 2012.

The evidence submitted by the parties establishes that Garcia executed the Note and has made no payments on it.   Under ordinary commercial circumstances, the Note might well be enforceable on summary judgment.   But the evidence establishes that these are not ordinary commercial circumstances.

The underlying reality of this action is that an attorney is attempting to enforce a fee contract made during the attorney-client relationship.   There is nothing necessarily improper about attempting to enforce such a contract.   But it is well established that an action of this description requires close judicial scrutiny.

The starting point for analysis is DiFrancesco v. Goldman, 127 Conn. 387, 16 A.2d 828 (1940).   DiFrancesco retained Goldman to represent him in a collection matter.   The question presented was whether Goldman was entitled to the fee agreed upon by the parties in their contract or whether the contract was not effective unless the jury first found that it was reasonable.   The Court held that Goldman was presumptively entitled to the fee stated in the contract.   In so holding, however, it added some important qualifications.

Contracts between attorney and client fall naturally into at least two categories:  (1) those made before the relationship of attorney and client has commenced or after the relationship has terminated;  and (2) those made during the relationship.   The agreement between the plaintiff and the defendant, whatever it was, was made during the relationship.   Courts of equity scrutinize transactions made between attorney and client during the existence of the relationship with great care and if there are doubts they will be resolved in favor of the client ․ Nevertheless, an attorney is not prohibited from contracting with his client respecting his fees, and a contract thus made after the commencement of the relationship of attorney and client is not per se void but will by reason of the confidential nature of the relationship be closely scrutinized by the court.   No undue advantage can be taken of the relationship of attorney and client in order to procure such a contract;  but where the parties are free to contract, their agreement should not be set aside or the agreed compensation withheld unless fraud has been perpetrated, undue influence exerted, material facts affecting the subject matter misrepresented or suppressed, or advantage taken of a position of confidence and trust to obtain an unconscionable advantage over the party, in which case a court of equity may grant relief from such oppression, and the attorney will be confined to a reasonable charge for compensation without regard to the attempted fixation of the value of his services ․ [T]he contract will be sustained if found to have been fairly made and no unconscionable advantage taken of the client by the attorney.

Id., at 392–93.  (Internal quotation marks and citations omitted.)

DiFrancesco remains good law.   In Updike, Kelly & Spellacy, P.C. v. Beckett, 269 Conn. 613, 850 A.2d 145 (2004), the Court reiterated DiFrancesco 's criteria for an enforceable fee contract.  Id., at 651–52.   The Court added that, “The burden is on a fiduciary to prove by clear and convincing evidence that he has met his fiduciary obligations.”  Id., at 652.

The evidence establishes that the Note was executed during the attorney-client relationship.   The questions relating to its enforceability “must be determined by the fact finder on a case-by-case basis.”  Updike, Kelly & Spellacy, P.C. v. Beckett, supra, 269 Conn., at 652 n.30. The close judicial scrutiny required by our case law cannot adequately be accomplished in a summary judgment proceeding, especially in a proceeding where the relevant facts are as undeveloped as they are here.   Summary judgment should be granted with caution and should be denied “in a case where there is reason to believe that the better course would be to proceed to a full trial.”  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).   An appropriate DiFrancesco analysis here must be made after a full evidentiary hearing.   The Motion For Summary Judgment is denied.

Jon C. Blue

Judge of the Superior Court

FOOTNOTES

FN1. Although the Note is dated December 16, 2008, the evidence establishes that both the Note and the Agreement were signed on December 17, 2008..  FN1. Although the Note is dated December 16, 2008, the evidence establishes that both the Note and the Agreement were signed on December 17, 2008.

Blue, Jon C., J.