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Xingkuiguo v. Oods & Woods, PP

Court of Appeals of Tennessee, Nashville

March 14, 2017

XINGKUIGUO
v.
OODS & WOODS, PP

          Session February 23, 2017

         Appeal from the Circuit Court for Davidson County No. 15C3765 Hamilton V. Gayden, Jr., Judge

         A former client sued his former attorney for breach of contract, and the trial court entered judgment in favor of the client for $3, 500. Because the trial court found that the attorney had "justifiable reasons" for terminating the contract, and because the contract provided that the $7, 000 set fee paid by the client at the beginning of the representation was earned upon payment, we have determined that the trial court erred in entering judgment in favor of the client.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed and Remanded

          Xingkui Guo, Nashville, Tennessee, Pro Se.

          Mark J. Downton, Nashville, Tennessee, for the appellee, Woods & Woods, PP.

          Andy D. Bennett, delivered the opinion of the Court, in which Frank G. Clement, Jr., P.J., M.S., and W. Neal McBrayer, J., joined.

          OPINION

          ANDY D. BENNETT, JUDGE

         Factual and Procedural Background

         Xingkui Guo signed a contract, structured as an engagement letter, with the Law Offices of Woods & Woods ("the Firm"), on June 15, 2014, for the Firm to represent him in an ongoing lawsuit against two of his former employees. Allen Woods, an attorney with the Firm, had primary responsibility for Mr. Guo's case. The engagement letter contains the following pertinent provisions regarding the Firm's fees:

You and the firm both agree that a set fee and a fee contingent upon the outcome of your litigation involving your pending lawsuit for libel and malicious prosecution is the appropriate method to determine our legal fee in this case. Please be advised that the Law Offices of Woods and Woods does not guarantee any specific outcome or certain result. All parties, however, agree that upon the execution of this Engagement Letter, you will deposit with Woods and Woods, PC a set fee of $7, 000 for all work performed with regard to the initial trial in regard to your already pending lawsuit. Thereafter, following final resolution of this case in your favor, whether as a result of receiving a court ordered judgment for a certain amount or as a result of an agreed upon settlement between you and the adverse party(ies), Woods and Woods, PC shall be entitled to 33% of any judgment or settlement actually collected, minus the $7, 000 fee already paid to the firm. The set fee is earned upon payment and does not guarantee any certain result.

(Emphasis added). The contract further states: "[The Firm] may terminate this representation at any time, for good cause . . . ." Upon signing the engagement letter, Mr. Guo paid the Firm $7, 000, and the Firm began its representation of Mr. Guo.

         A disagreement arose between Mr. Woods and Mr. Guo beginning in early October 2014. After Mr. Woods conducted phone interviews with two third-party witnesses, he strongly advised Mr. Guo against taking their depositions because he thought their testimony would hurt Mr. Guo's case and because he thought it would be unethical to depose the witnesses under the circumstances. When Mr. Guo insisted that Mr. Woods depose these two witnesses, Mr. Woods withdrew as Mr. Guo's attorney.

         In July 2015, Mr. Guo filed a civil warrant in general sessions court against Mr. Woods for breach of contract. The warrant was amended to dismiss Mr. Woods individually and substitute the Firm as the proper defendant. On October 1, 2015, the general sessions court entered judgment in favor of Mr. Guo in the amount of $2, 275. Mr. Guo appealed to circuit court, and the Firm answered, denying any breach of contract and, alternatively, asserting a claim for offset pursuant to quantum meruit for services rendered by the Firm.

         The Firm filed a motion for summary judgment on December 29, 2015 along with a statement of undisputed material facts. On February 5, 2016, Mr. Guo, acting pro se, filed an unsigned response to the Firm's motion. On February 16, 2016, the Firm filed a motion to compel a response to its interrogatories and request for production of documents and to deem admitted its requests for admission due to Mr. Guo's failure to respond to them.

         The trial was set for June 23, 2016. On June 17, 2016, the Firm filed a motion in limine requesting that the trial court rule on several matters. First, the Firm asked the court to rule on the pending motion for summary judgment, which had been heard months earlier and upon which the court had reserved ruling. Second, the Firm asserted that the court should dismiss the lawsuit based upon Mr. Guo's failure to prosecute, particularly his failure to respond to the interrogatories. Third, the Firm requested that the court declare the factual averments set forth in its statement of material facts to be accurate and not in dispute due to Mr. Guo's failure to respond to them. At the beginning of the hearing, as stated in its final order, the trial court "merge[d] the issues presented by Defendant in its Motion for Summary Judgment into the issues presented during the Bench trial."[1]

         During the trial, the trial court heard testimony from Mr. Guo and Mr. Woods. Mr. Woods testified about his work on Mr. Guo's case and stated that he had interviewed the two police officers at issue in contemplation of taking their depositions. After those interviews, Mr. Woods stated, he advised Mr. Guo that the police officers' depositions would hurt his case and that it would be unethical for Mr. Woods to depose them. Over Mr. Woods's objections, Mr. Guo introduced testimony from Renee Brewer, a private investigator, who stated that she had talked to the two police officers and that they could not recall speaking with Mr. Woods. The trial court stated at the hearing that it did not accept Ms. Brewer's testimony, but this finding is not reflected in its order.

In its final order, entered on July 8, 2014, the trial court found, in pertinent part:
Defendant admits that it refused to take the depositions of these witnesses, but states that it refused to take the depositions because to do so would violate Rule of Professional Conduct 1.2(d) and would further the Plaintiffs ulterior motive to take those depositions for a fraudulent purpose not related to the litigation. The Defendant requests that the Court rule it is entitled to the entirety of the $7, 000.00 fee the Plaintiff previously paid it. In support of its argument, the Defendant offers evidence that its attorneys performed 20.4 hours of work on the Plaintiffs lawsuit. Plaintiff ...

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