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SOHNS v. LITTLE PRINCE PRODUCTIONS

May 18, 1992

GREGORY E. SOHNS, Plaintiff,
v.
LITTLE PRINCE PRODUCTIONS, LTD., A. JOSEPH TANDET and GARY E. JACKSON, Defendants.


PATTERSON, JR.


The opinion of the court was delivered by: ROBERT P. PATTERSON, JR.

ROBERT P. PATTERSON, JR., U.S.D.J.

 Plaintiff Gregory E. Sohns ("Sohns") moves (1) pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment against Defendant Little Prince Productions, Ltd. ("Little Prince") on Claim II of the complaint, seeking compensatory damages for services rendered in the amount of $ 81,702.92, and (2) pursuant to Rule 12(c) of the Federal Rules of Civil Procedure for judgment on the pleadings dismissing with prejudice the counterclaim against Sohns by Defendants Little Prince and A. Joseph Tandet ("Tandet").

 The complaint contains claims against Little Prince for breach of contract, account stated, and quantum meruit and unjust enrichment. Tandet is sued for tortious interference with contract, and Defendant Gary E. Jackson ("Jackson") is sued for breach of contract. Little Prince and Tandet each assert a counterclaim against Sohns for malpractice. Little Prince asserts a cross-claim against Jackson for judgment over and against Jackson for any liability found against Little Prince and/or Tandet.

 On this motion Sohns seeks recovery on his claim of account stated and dismissal of Tandet's and Little Prince's counterclaim for malpractice.

 BACKGROUND

 Sohns rendered legal services to Little Prince and sent it bills each month from August 1990 through May 1991 and a final bill on July 31, 1991. These bills totaled $ 105,702.92. During 1990 Little Prince made two payments of $ 2,000 each, in September and December 1990, against outstanding statements. In February and March 1991, Little Prince made two additional payments totaling $ 15,000. Additionally, Jackson made a payment in June 1991 of $ 5,000. Sohns claims that a balance of $ 81,702.92 remains outstanding.

 Since 1980, Little Prince has been a public company traded on the National Association of Securities Dealers Automatic Quotation System ("NASDAQ"), and Tandet has been a senior executive officer and director. In June 1990, Little Prince was in merger discussions with Abcor Products, Inc. ("Abcor"). At that time, Tandet, as President of Little Prince, requested Sohns to represent Little Prince in connection with various matters involving corporate and securities law, including preparation of a share exchange agreement. Tandet agreed to pay Sohns for his legal services at an hourly rate of $ 175 and to reimburse him for disbursements incurred on behalf of Little Prince. Tandet states that Sohns agreed to a "cap" of $ 10,000 to $ 15,000 on the bill for his services, including the share exchange agreement with Abcor. Sohns denies that the estimate of his fees to which Tandet refers was agreed to be a "cap" on Sohns's fees. Tandet states that the merger discussions with Abcor ceased at the end of October 1990.

 Sohns's bills through October totaled less than the alleged cap. However, Tandet called on Sohns for additional services to Little Prince that did not relate to a merger with Abcor.

 In November 1990 Tandet was approached by Marshall Manley and Charles Kolker regarding a possible merger with Reserve Energy and Capital Corporation ("RECC"), a company allegedly owning oil reserves in Kentucky. These negotiations were more successful, and a share exchange agreement (the "Share Exchange Agreement") with the Control Group of RECC (the "Control Group") was executed in the last week of December 1990. By that date Little Prince had made two payments to Sohns totaling $ 4,000. At the closing of the Share Exchange Agreement, Tandet delivered to the attorneys for the Control Group the agreed-upon shares of Little Prince in exchange for an agreed amount of RECC stock. The Control Group, as a condition for the execution of the Share Exchange Agreement, agreed to pay $ 15,000 toward the legal fees incurred by Little Prince on this transaction. Pursuant to that agreement, Tandet received a check for $ 15,000 in February 1991.

 Sohns's total bill outstanding on January 7, 1991 for services rendered to Little Prince through December 31, 1990 was $ 23,385.50. Tandet alleges that he telephoned Sohns at that time and complained that Sohns's bills were over the $ 15,000 cap Sohns allegedly had promised. According to Tandet, Sohns then told Tandet not to be concerned because two principals of RECC, B.F. Shamburger and Jackson, would pay the amounts due. In February, Tandet sent a Little Prince check to Sohns dated February 13, 1991 in the amount of $ 3,000 with the notation "Legal Services -- Merger." Sohns demanded a larger payment, and Tandet sent him a Little Prince check dated February 15, 1991 in the amount of $ 12,000 marked "Full payment legal fees as of December 31, 1990." Tandet alleges that when making this payment he told Sohns that his fees were excessive. On February 20, 1991, Sohns returned the check for $ 12,000 to Tandet, rejecting Tandet's notation that the $ 12,000 would constitute payment in full.

 Tandet responded the same day by a facsimile letter to Wood, stating he felt that $ 19,000 was the appropriate fee for Sohns's services through December 31, 1990, and that Sohns had agreed that he would adjust his initial bill of $ 8,000 and had not done so. Tandet referred to the alleged $ 10,000 to $ 15,000 cap on legal fees. Tandet's letter also stated that Sohns had estimated his fees to Little Prince for the first half of 1991 at $ 100,000, which Tandet found "totally unreasonable." Sohns responded by facsimile letter to Wood that same day disputing various of Tandet's points and stating he had not agreed to any adjustment or to a cap on his fees. Thereafter, Tandet delivered to Sohns a Little Prince check for $ 12,000 dated February 15, 1991, which bore no notation. Sohns continued to send monthly bills for his services and outstanding balances without reduction except for payments received.

 In April 1991, Sohns notified Little Prince that he would cease his services to Little Prince unless a payment of $ 20,000 was made against the then outstanding balance under ...


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