PSteele

Utah: sued over old legal bill

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1. Who is the named plaintiff in the suit?

A law firm that I had previously retained in an unrelated matter.

 

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2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.)

An attorney employed by that law firm, though for purposes of this case he's operating under his own shingle rather than theirs.

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3. How much are you being sued for?

Started off at ~25k, reduced to ~15k, plus interest

 

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4. Who is the original creditor? (if not the Plaintiff)

Plaintiff

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5. How do you know you are being sued? (You were served, right?)

Served

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6. How were you served? (Mail, In person, Notice on door)

In person

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7. Was the service legal as required by your state?

It appears to meet the requirements, yes

 

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8. What was your correspondence (if any) with the people suing you before you think you were being sued?

Some years back they presented me with a rather padded bill for blatantly (and I think in part intentionally) incompetent service, and I told them they were insane. 

 

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9. What state and county do you live in?

I live in California, but I'm being sued in Salt Lake County, UT

 

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10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)

2014

 

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11. When did you open the account (looking to establish what card agreement may be applicable)?

Not a credit card, but everything started in 2014.

 

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12. What is the SOL on the debt?

Depends on a couple factors, none of which I'm sure of. Might be 4 years, might be (I think) 6.

 

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13. What is the status of your case? Suit served? Motions filed? You can find this by a) calling the court or B) looking it up online (many states have this information posted - when you find the online court site, search by case number or your name).

I've already filed the answer.

 

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14. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)

I don't think it's been sent to a credit bureau.

 

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15. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request before being sued, it likely won't help create FDCPA violations, but disputing after being sued could be useful to show the court that you dispute the debt ('account stated' vs. 'breach of contract').

Years ago, but I don't think I have any record of this.

 

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16. How long do you have to respond to the suit? (This should be in your paperwork). If you don't respond to the lawsuit notice you will lose automatically. In 99% of the cases, they will require you to answer the summons, and each point they are claiming. We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit?

Answer has already been filed.

 

Background:

I retained a law firm for an unrelated matter in Utah in 2014. I paid a substantial retainer, which they blew through in a hearing that they recommended which attempted to get a utah court to modify an order from an out of state court. Obviously this is a terrible idea, and the firm knew (or should reasonably have known) that the judge would smack them down for it. Subsequent to this, they went back and did it the right way and prevailed, though there was a substantial amount of other incompetence along the way, which caused me significant difficulties in other states that took a lot of additional time to resolve on my own. At the end of it, they presented a bill for almost 25,000 dollars.

 

Complaint:

The complaint has only a copy of the retainer contract attached. The contract was not signed by the firm. The contract specifies bill rates, interest, etc., and also that the contract expires one year from date of signature.

The complaint alleges that I am a resident of (or that the contract was executed in) Salt Lake County.

The complaint alleges that I owe almost 25k, plus interest compounded since a date about a week before my signature even appears on the contract, so presumably that's when the breach occurred?

 

Settlement negotiations with plaintiff:

Plaintiff was willing to settle for the principal in the matter, which they claimed was ~25k. I demonstrated to them that even if we were agreeing that there were no issues with their service, even Enron's accountants couldn't come up with that number. They came down on their settlement offer substantially after that, but it was still far more than anything that I could conceivably owe them. After I pointed out the false nature of their claim (I used the words "knowingly and willfully false") they very quickly filed an amended complaint. (VERY quickly. Under 2 hours after I sent them that email. I'm beginning to think I shouldn't have said those words.) They still decline to back off the settlement amount.

 

Amended Complaint:

Same verbage as the initial complaint, though the amount is reduced substantially. It's still significantly more than legitimate, though.

 

The offer of settlement (for far more than I actually owe, but substantially less than what they'd get in interest if they prevail) is open until Friday, so I need to make a decision quickly.

 

I can attack the contract. They never signed it, they're alleging that I was in breach of it a week before the date of my signature, and there is a legitimate argument to be made that it doesn't represent a true meeting of the minds anyway because their billing history shows rates other than what are in the contract.

I can attack the amounts. Some of the things that they're billing for are events which occurred well outside the scope of any service that they were authorized to provide, and which in fact the (alleged) contract says they'd require specific additional written authorization for. Further, quite a few thousands of dollars (close to 10k, in fact)  are just manual entries in the billing record, without any sense of what they were actually doing in that time. Many courts (and the ABA model) reject block billing.

I can attack their service for failure of consideration. Even though they explicitly disclaim any guarantee of success in the alleged contract that they did not sign, they are also required to behave in a manner that suggests they're at least trying, and they certainly should have known that they needed to handle the jurisdiction issue first.

I can attack the timeline. The (alleged, and again-not fully executed) contract states that it expires in a year, and this entire thing lasted for more than a year, and then... what?

I can attack failure to mitigate damages. There are clauses in the (alleged, and again not fully executed) contract that state that the firm will withdraw if they're not paid within 30 days, and they did not do that.

I can attack venue. The complaint alleges that this is the proper court because I am either a resident of that county or that the contract was executed in that county.  The contract was never signed by hte plaintiff, nor am I a resident of that county.

 

So that's pretty much where my thoughts are right now. Is it worth fighting? Or should I just go ahead and cough up for their settlement, as ridiculous as it is? I have to make a decision very quickly.

 

 

 

 

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I think you'll have an uphill battle on the 'not signed' argument. They obviously represented you, and you ultimately received benefit from their representation. I think the only real defense you could have is that they overcharged you, but even that will be a slog when they produce work logs and 'reasonable' hourly rates.

I liken this kind of argument to someone using an emergency room to treat a cold, and then being outraged when they get a $1,500 bill to have the hospital staff take their vitals and send them home with a prescription for tylenol. 

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7 minutes ago, Harry Seaward said:

I think you'll have an uphill battle on the 'not signed' argument. They obviously represented you, and you ultimately received benefit from their representation. I think the only real defense you could have is that they overcharged you, but even that will be a slog when they produce work logs and 'reasonable' hourly rates.

I liken this kind of argument to someone using an emergency room to treat a cold, and then being outraged when they get a $1,500 bill to have the hospital staff take their vitals and send them home with a prescription for tylenol. 

 

The problem is the work logs: almost 10,000 dollars are disposed of simply with the note of "manual entry." There's only about 5k that actually has anything attributed to it, and a big chunk of that is at the wrong bill rate.

 

edit to add: 

I'm not against paying the deserved amount... the problem is, the deserved amount is NOWHERE NEAR what they're claiming. Attacking the contract is more an attempt to get rid of the interest than to get rid of the bill as a whole.

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3 minutes ago, Harry Seaward said:

In order to use this argument, you have to agree there was a contract. 

 

No, not exactly. I'd be arguing that the alleged contract presented is invalid, nothing more. Plaintiff didn't sign it, plaintiff didn't follow it, and plaintiff claims I breached it a week before my signature appears on the sheet. Therefore, this alleged contract cannot possibly be valid. Plaintiff's own actions and allegations indicate that the alleged contract in the record couldn't be the one that governs any business between us.

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2 hours ago, PSteele said:

No, not exactly.

How do you plan to argue they charged the wrong billing rate without acknowledging a contract exists that establishes a correct billing rate? 

It sounds to me like you want to have it both ways. You want to say they breached a contract that doesn't legally exist, but still try to bind them to certain terms of said contract. I think a court is ultimately going to make you choose one defense or the other. Based on what you've said about them not billing according to the contract, i think that argument will have a more predictable outcome vs. letting them have the option to present evidence that they obviously provided legal services and $500/hr is a reasonable rate for the services they provided. 

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25 minutes ago, Harry Seaward said:

How do you plan to argue they charged the wrong billing rate without acknowledging a contract exists that establishes a correct billing rate? 

It sounds to me like you want to have it both ways. You want to say they breached a contract that doesn't legally exist, but still try to bind them to certain terms of said contract. I think a court is ultimately going to make you choose one defense or the other. Based on what you've said about them not billing according to the contract, i think that argument will have a more predictable outcome vs. letting them have the option to present evidence that they obviously provided legal services and $500/hr is a reasonable rate for the services they provided. 

 

No, I'm not trying to argue that they charged the incorrect billing rate. I'm saying that the contract they're presenting does not describe the dealings that occurred, which, combined with the fact that they never signed it indicates that no true meeting of the minds took place. I don't actually care what the bill rates are, just that they demonstrate that THIS sheet of paper is not a valid contract. (And, regardless, the fact that I supposedly breached it BEFORE my signature appeared on it would also argue against this being the ACTUAL contract.)

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On 9/18/2019 at 12:01 AM, PSteele said:

 

No, I'm not trying to argue that they charged the incorrect billing rate. I'm saying that the contract they're presenting does not describe the dealings that occurred, which, combined with the fact that they never signed it indicates that no true meeting of the minds took place. I don't actually care what the bill rates are, just that they demonstrate that THIS sheet of paper is not a valid contract. (And, regardless, the fact that I supposedly breached it BEFORE my signature appeared on it would also argue against this being the ACTUAL contract.)

Do you have a copy of the contract or retainer agreement?

Do you have copies of anything showing you disputed any charges, time or their errors causing more time to be spent than necessary?

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Contracts only have to be signed by the party to be bound. But this is a question of law and might need research. Does the law in the jurisdiction require attorneys to sign engagement letters or retainer agreements? 

If it were me, I would focus my attention on: (i) if the attorney engaged in "block billing;" (ii) if there is a lack of description of the service rendered to you; (iii) that the hours spent on a matter were too long; (iii) that a partner was doing work that could have been handled by a more junior attorney; (iv) and the rate charged was not the rate agreed to.

 

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On 9/23/2019 at 4:02 AM, fisthardcheese said:

Do you have a copy of the contract or retainer agreement?

Do you have copies of anything showing you disputed any charges, time or their errors causing more time to be spent than necessary?

 

On 9/23/2019 at 7:07 AM, SJULawAlum said:
 

Contracts only have to be signed by the party to be bound. But this is a question of law and might need research. Does the law in the jurisdiction require attorneys to sign engagement letters or retainer agreements? 

If it were me, I would focus my attention on: (i) if the attorney engaged in "block billing;" (ii) if there is a lack of description of the service rendered to you; (iii) that the hours spent on a matter were too long; (iii) that a partner was doing work that could have been handled by a more junior attorney; (iv) and the rate charged was not the rate agreed to.

 

 

In the end, the amount that I'd have spent on defending and / or travel to defend it myself was more than what the settlement wound up being, so I just went and settled. 

That said:

(1) yes, block billing was a thing. There was almost $12,000 worth of block billing.

(2) yes, the rate charged was not the rate shown in the contract, for a couple hundred hours.

(3) There was a little bit of partner time, but it wasn't partners doing work. Status meetings, etc. Of course, some of that time occurred after the case was adjudicated in my favor and the final orders were filed, but it was a relatively minor amount.

(4) The big issue was incompetence, which may or may not have been intentional. The matter at hand was a suit where I was trying to take custody away from my ex-wife. In the end, I won, but it should have been a slam dunk at the first hearing for a variety of reasons that I'm not going to go into now. 7,000 dollars (block billed, of course) to prepare for a hearing on a motion to modify an out of state custody order, when the attorney knew (or should reasonably have known) that the order needed to be registered in-state first. And then the final order set me up with both full custody and an order to pay child support, because of course it did. It took me a couple of years to sort that out on my own hook, and I feel like the whole thing was just fishing for more fees. But whatever. It's over and done with now.

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I am sorry to hear you had that experience. Block billing is a problem in the legal industry because (1) billing time is not itself billable and (2) lawyers try to maximize as many hours billing cases as possible so they might just put "hearing preparation - 7 hours" but that is not appropriate.

It should be more like:

  • hearing prep reviewing documentary evidence - 1 hr
  • hearing prep research that the law is still valid - 1 hr
  • hearing prep - interviewing and preparing a witness to testify - 1 hr

At least it is over and you have finality. 

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