Citation. 43 Cal.2d 298, 273 P.2d 15 (Supreme Court of California, In Bank. 1954)
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An attorney entered into a contract with a client to perform certain legal services for a set fee. The client terminated the attorney's representation immediately before judgment was to be rendered in the matter.
Synopsis of Rule of Law.
"[R]estitution in money is not available to one who has fully performed his part of contract, if only part of agreed exchange for such performance that has not been rendered by defendant is sum of money constituting a liquidated debt, but that full performance does not make restitution unavailable if any part of consideration due from defendant in return is something other than a liquidated debt; in such cases he recovers full contract price and no more."
Facts.
The Plaintiff, Oliver (the "Plaintiff"), alleges that the deceased, Roy Campell ("Mr. Campbell"), owed him $10,000 and prior to his death had only paid him $450. The Plaintiff sued the Defendant, the administratrix of Mr. Campbell's estate (the "Defendant"). The Plaintiff represented Mr. Campbell in a separate maintenance action. It was eventually made a divorce action. Their agreement was evidenced by a written contract dated December 16, 1949. The parties agreed that Mr. Campbell would pay the Plaintiff "$750 plus court costs and other incidental in the sum of $100 making a total of $850." The Plaintiff was terminated prior to the end of the action (the court had indicated it was going to give Mr. Campbell's wife a divorce, but had not done so yet) and the lower court determined "[t]he reasonable value of the services was $5,000." Mr. Campbell only paid $550 to the Plaintiff, $450 in legal fees and $100 in costs. Prior to his representation being terminated, the Plaintiff told Mr. Campbell he was prepared to carry the case to conclusion. Further, the Plaintiff told Mr. Campbell he expected to "be paid the reasonable value of his services."
Issue.
Is restitution an appropriate remedy based on this set of circumstances?
Held.
No. The court first lays out the law relevant to the breach of employment contracts or employment of an attorney by a client. Three remedies are available to an aggrieved party: [i] "He may treat the contract as rescinded and may recover upon a quantum meruit so far as he has performed; [ii] or he may keep the contract alive, for the benefit of both parties, being at all times ready and able to perform; or, [iii] [ ], he may treat the repudiation as putting an end to the contract for all purposes of performance, and sue for the profits he would have realized if he had not been prevented from performing.'" However, the court found that under the circumstances before it, the Plaintiff's representation was effectively over when he was fired. Thus, the three above remedies were not applicable. Instead, the Plaintiff could only recover the full contract price and no more. The rule is that "restitution in money is not available to one who has fully performed his part of contract, if only part of agreed exchange for such performance that has not been rendered by defendant is sum of money constituting a liquidated debt, but that full performance does not make restitution unavailable if any part of consideration due from defendant in return is something other than a liquidated debt; in such cases he recovers full contract price and no more" applies. The court concludes, "there being no dispute as to the amount called for in the contract, the services having been in effect fully performed, the court should have rendered judgment for the balance due on the contract which is conceded to be $300."
Dissent.
The dissenting judge objects to the majority's characterization that there is "no dispute as to the amount called for in the contract, the services having been in effect fully performed, the court should have rendered judgment for the balance due on the contract which is conceded to be $300." The judge feels that judgment for $5,000 should be entered because "no reasonable conclusion can be drawn from the evidence other than that the discharge amounts to a clear repudiation and abrogation of the contract in its entirety, in which case plaintiff is entitled to recover the reasonable value of the service performed." In other words, unlike the majority's view, the contract was not effectively complete.
Discussion.
It is interesting to compare the majority and dissenting opinions and how they determine whether restitution is applicable based on whether the contract was complete at the time of the attorney's termination.
