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October 13, 1988

VINCENT J. CURTIS, ET AL., Plaintiffs,

The opinion of the court was delivered by: GASCH




 This matter comes before the Court on plaintiffs' motion for summary judgment. Plaintiffs, co-partners in the law firm of Fletcher, Heald & Hildreth, brought this action to recover monies allegedly due and owing for professional services rendered by plaintiffs. Defendant does not dispute that legal services were rendered, nor does it dispute the hourly rates charged, the number of hours billed, or the expenses charged. The parties do not agree about whether defendant agreed to pay interest on the outstanding balances of three of its accounts.

 Defendant also alleges in a counterclaim that plaintiffs represented competitors of defendant at the same time they represented defendant, such that a conflict of interest existed among plaintiffs' clients. Defendant, accordingly, seeks a disgorgement of all fees that were earned through plaintiffs' representation of the defendant.


 Defendant originally retained plaintiffs' law firm, which specializes in representation of entities before the Federal Communications Commission ("FCC"), in December 1980. Defendant indicates that one of its representatives "specifically asked the Plaintiff's law firm, prior to retaining their services, whether they represented any of Defendant's competitors and made clear that such representations would be unacceptable to them." Defendant's Memorandum of Points and Authorities in Opposition to Plaintiff's Motion for Summary Judgment ("Opposition") at para. 5. Defendant further asserts that "plaintiff never disclosed, let alone discussed, the firm's representation of Defendant's competitors with Defendant. . . ." Id. Plaintiffs neither admit nor expressly deny this assertion at this time. Plaintiffs' Reply to Defendant's Memorandum of Points and Authorities in Opposition to Plaintiffs' Motion for Summary Judgment ("Reply") at 3.

 The fee agreement entered into between plaintiffs and defendant was that the law firm would be compensated on an hourly basis, charging current rates for work performed by lawyers and paralegals. In addition, plaintiffs were to be reimbursed their out-of-pocket expenses. Plaintiffs' Statement of Material Facts As To Which Plaintiffs Contend There Is No Genuine Issue at para. 4; Defendant's Statement of Material Facts in Dispute ("Defendant's Facts in Dispute") at para. 1.

 Between November 1981 and March 1986, plaintiffs represented defendant in various matters before the FCC and on related legal issues. Most of the legal work pertained to representing defendant in a contested radio license proceeding before the FCC. Plaintiff was successful in securing for defendant the license for a station in Santa Ynez, California. Plaintiffs subsequently filed and pursued an application to move the license to Orcutt, California. This is not disputed.

 Four separate billing accounts were established by plaintiffs for services performed for defendant. Plaintiffs indicate that beginning in February 1985, they began charging interest on two of the accounts (18225 and 18226) at the rate of one percent (1%) per month on all balances sixty (60) days or more in arrears. The same interest charges began on account 18228 in November 1985, sixty (60) days after charges were first made on this account. Plaintiffs' Motion for Summary Judgment ("Motion") at 9. Defendant does not dispute that interest was billed, nor does defendant assert that it did not receive statements from plaintiffs. Defendant also does not claim that it was unaware that interest charges were being made. Defendant, however, "denies that such interest was agreed upon by the Defendant." Defendant's Facts in Dispute at 1. No interest was charged by plaintiffs on the fourth account (18227) because plaintiffs agreed with defendant to waive interest charges in exchange for defendant's payment of $ 500.00 per month against the outstanding balance of that account. Defendant made regular payments on that account for several months, but discontinued payments after November 30, 1985. Motion at 9-10. Plaintiffs also represent that as of August 31, 1986, the account balances of the first three accounts discussed above (18225, 18226, and 18228), including interest billed to that date, were as follows: Account No. Balance 18225 $ 15,188.12 18226 2,603.71 18228 2,788.71


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