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03/05/93 CHRISTOPHER M. KERNS v. AMERIPRINT

March 5, 1993

CHRISTOPHER M. KERNS, KERNS AND KLIMEK, P.C., APPELLANTS
v.
AMERIPRINT, INC., APPELLEE



Appeal from the Superior Court of the District of Columbia; (Hon. John F. Doyle, Trial Judge)

Before Terry and Farrell, Associate Judges, and Belson, Senior Judge.

The opinion of the court was delivered by: Belson

BELSON, Senior Judge: This is an appeal from the trial court's judgment in favor of appellee Ameriprint, Inc., in the amount of $4,272.02. The judgment ordered the return to Ameriprint of that portion of a $10,000.00 retainer fee which the trial court, sitting without jury, found the retained law firm of Kerns & Klimek, P.C., appellant, was not entitled to keep. On appeal, Kerns & Klimek, P.C. (hereinafter "Kerns"), argues that Ameriprint's action for return of a part of the retainer agreement was barred by the statute of limitations, D.C. Code § 12-301 (1989 Repl.), and that the trial court erred in dismissing the action against the individual appellant, Christopher M. Kerns, Esquire, "without prejudice" rather than on the merits. We affirm.

I.

This litigation arises out of the sale of the stock of Ameriprint, Inc. by Ronald Cobb and others to David Morey pursuant to a stock purchase agreement of October 23, 1985, and a contemporaneous escrow agreement. A few months before the sale, on August 27, 1985, Ameriprint had retained Kerns as its counsel and paid a retainer fee of $10,000.00, against which Kerns' services were to be charged at the rate of $125.00 per hour, plus expenses. Kerns continued to send monthly statements to Ameriprint calculated through the 19th of each month to indicate Kerns' fees and expenses.

The trial court made findings embracing the foregoing uncontested facts, and also found that the negotiations for the sale of the stock by Cobb, et al. to Morey took place during the period October 1 to October 23, 1985, and that upon entering the agreement, Morey, as the new president of Ameriprint, hired Cobb to serve generally in a sales capacity. It also found that the stock purchase agreement recited that each party, Morey on the one side and Cobb, et al., on the other, warranted that no obligations existed with respect to the negotiations, subject to the provision that:

Notwithstanding the foregoing the Company shall pay an amount not to exceed $1,000.00 for the legal services of the Company's attorney relative to this agreement and the negotiations relative thereto.

The court also found that the central parties concerned in the matter of the sale of the stock were the owners of the stock and the prospective purchaser (rather than Ameriprint with which Kerns had the retainer agreement).

Kerns played an active role in the negotiations between Cobb and Morey leading up to the sale of stock. The purchaser, Morey, used the services of another attorney, Lane Potkin, Esquire. The court inferred that much of Kerns' work during the period October 1-23 was for Cobb, a party to the sale, as distinguished from the corporation. The court found specifically that during that period Kerns performed a total of forty-eight hours of legal services. The court went on to find that the evidence did not show an allocation of definite hours of work performed for the stockholders and the work performed for the company. The court indicated it was satisfied that at least eight hours of the total work must have been allocable to work performed for the corporation, and then stated "taking into account the obligation of an attorney to define such matters precisely, the Court finds that only an additional $1,000.00 was owed by the Corporation to Kerns & Klimek, P.C. for October 1, 1985 through October 23, 1985."

Considering the totality of the work Kerns did for Ameriprint after the initiation of the retainer agreement, including expenses as well as the work between October 1st and 23rd, the trial Judge found that the provision of those services entitled Kerns to $5,727.98 at the contract rate of $125.00 an hour. Accordingly, he awarded judgment to Ameriprint in the amount of $4,272.02, the balance of the $10,000.00 retainer.

II.

A. The Statute of Limitations

On the issue of limitations, the Judge concluded that a billing letter addressed to both Morey and Cobb by Kerns, and dated December 17, 1985, did not commence the running of the statute. He found that the letter was received by Cobb who did not inform Morey of its receipt but instead informed Kerns that he, Cobb, did not agree with the number of hours charged and that the proper party to whom Kerns should send the bill was Morey, the new president of the corporation. Rejecting Kerns' position that the letter of December 17, 1985, triggered the running of the statute, the trial Judge found:

Under the rapidly changing circumstances of the status of Mr. Cobb and Mr. Morey relative to the Corporation and to the Corporate Attorney and the ambivalent position of Mr. Cobb as an individual possibly liable for legal services rendered him personally as shareholder, the Statute began to run ...


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