United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 12, 2006 Decided January 16, 2007
No. 05-7076
STEVEN R. PERLES, P.C. AND STEVEN R. PERLES, ESQUIRE,
APPELLANTS
v.
ANNE-MARIE KAGY,
APPELLEE
Consolidated with
05-7077, et al.
Appeals from the United States District Court
for the District of Columbia
(No. 01cv00105)
Steven M. Schneebaum argued the cause and filed the briefs
for appellants/cross-appellees Steven R. Perles, P.C. and Steven
R. Perles, Esquire.
John W. Karr argued the cause and filed the briefs for
appellant Thomas Fortune Fay.
Mark D. Cummings argued the cause for appellees/cross-
appellants Anne-Marie Kagy. With him on the briefs was David
2
E. Sher.
Before: TATEL and KAVANAUGH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge KAVANAUGH.
KAVANAUGH, Circuit Judge: Like a contentious corporate
merger or a sizable family inheritance, a large contingency fee
in a successful lawsuit sometimes leads to nasty controversy
over who gets what. This case is a fine example.
From 1994 to 1999, recent law school graduate Anne-Marie
Kagy worked as an attorney for solo practitioner Steven Perles.
Among her other work, Kagy assisted Perles with two wrongful
death actions brought by Perles’s clients against the Government
of Iran (the Flatow and Eisenfeld cases). Perles’s clients
eventually obtained verdicts of more than $200 million in each
case. Congress used frozen Iranian assets to compensate the
victims for the compensatory portions of the damages awards
(more than $20 million in each case). As a result, attorney
Perles received millions of dollars in contingency fees. Perles
and Kagy had no written contract on how Kagy would be paid
for her work on these two cases, but Kagy claims they had an
oral contract entitling her to a one-third share of Perles’s fee in
each case. After a bench trial, the District Court concluded that
the parties had an express oral contract entitling Kagy to one-
third of Perles’s ultimate fee with respect to the Flatow case
(meaning more than $1.3 million for Kagy for her work on that
case), but not with respect to the Eisenfeld case. We conclude
that Perles and Kagy did not enter into a contract with respect to
Kagy’s work on either case.
3
I
1. During the period relevant to this case, Steven Perles, an
experienced attorney in private practice, owned and ran a sole-
practitioner law firm in the District of Columbia. While she was
in law school, Anne-Marie Kagy earned academic credit as an
unpaid clerk for Perles. After she graduated in 1994, Kagy
worked for Perles as a paid employee for about five years.
During that time, Perles and Kagy occasionally discussed the
terms of Kagy’s compensation. Notwithstanding numerous
conversations, however, they never put those terms in writing.
Before Kagy’s work on the two matters at issue here, her
compensation varied from case to case. If the client paid Perles
by retainer or based on attorney hours worked, Perles would pay
Kagy an hourly rate of up to $50 an hour. Kagy’s work on such
matters included, among other things, legal research, drafting
pleadings, and preparing exhibits. Kagy also assisted Perles
with about 20 administrative claims matters before the U.S.
Foreign Claims Settlement Commission. In those administrative
proceedings, Perles represented Jewish Americans enslaved by
the Nazis during World War II. Pursuant to statute, Perles’s
clients sought to recover certain compensation from a fund
administered by the Commission. The sums awarded in those
proceedings were modest; under federal law, moreover, Perles’s
maximum fee was only 10 percent of the award. See 22 U.S.C.
§ 1623(f). Perles in turn paid Kagy one-third of his fee in nine
successful claims, which earned Kagy about $20,000 from those
matters over a period of three years (or just over $2,000 per
successful case).
2. Kagy also worked for Perles on a contingency fee case,
Flatow v. Islamic Republic of Iran. Beginning in 1996, Perles
represented Stephen Flatow in that matter under a typical
arrangement in which Perles would receive one-third of any
4
eventual recovery by Flatow. (Perles eventually was joined by
co-counsel Thomas Fay.) Flatow claimed that terrorists with
ties to the Iranian government murdered his daughter. In a tort
action filed under the Foreign Sovereign Immunities Act, 28
U.S.C. § 1605(a)(7), Flatow sought to recover compensatory and
punitive damages from the Government of Iran.
Kagy worked on the Flatow case for several years. Among
other things, she helped prepare the complaint; oversaw service
of process on Iran; wrote a comprehensive memo in which she
anticipated and analyzed possible defenses; and helped draft
proposed findings of fact and conclusions of law.
As with other cases on which Kagy worked, she and Perles
never put the terms of her compensation for her work on Flatow
in writing. In March 1997, Kagy drafted a written agreement
that would have entitled her to one-third of Perles’s fee in the
Flatow case. As Kagy admits, Perles told her the draft was “all
wrong” and refused to sign it. District Court Op. at 5 n.6;
Kagy’s Br. at 9; J.A. 633-40 (trial transcript). After Perles
refused to sign Kagy’s proposal in March 1997, Kagy
“repeatedly” but unsuccessfully asked Perles to reduce their
alleged one-third fee arrangement to writing. District Court Op.
at 5 n.6; see also Kagy’s Br. at 13; J.A. 712, 723. According to
Kagy, she and Perles discussed the issue while speaking on the
telephone in May 1997. During that conversation, Kagy asked
to be paid more than one-third of Perles’s fee in the Holocaust
administrative matters. Kagy asserts that Perles responded that
a one-third share of his fee would “always be appropriate” in his
contingency fee cases, including Flatow. District Court Op. at
9. Perles claims that he said no such thing with respect to the
Flatow case; rather, he contends that he planned to pay Kagy an
elevated hourly rate (meaning more than $50 per hour) for her
work on Flatow if they won the case and received a fee. Kagy
testified that she did not try to prepare a writing to reflect the
5
May 1997 telephone conversation because she was concerned
that Perles would not sign it, just as he had refused to sign the
draft she composed in March 1997, and because she “did not
want to go through that experience again.” J.A. 713-14, 723.
Kagy nonetheless asserted that “on numerous occasions” after
the May 1997 exchange, she tried to persuade Perles to “sit
down and work it out,” but that Perles “always refused to do so.”
J.A. 723.
Two subsequent developments in the Flatow litigation
brought Perles a huge pay-out. First, in March 1998, the trial
court entered a default judgment against Iran and its co-
defendants because the defendants did not enter an appearance
to contest the suit. The court awarded Flatow almost $250
million, including $23 million in compensatory damages and
$225 million in punitive damages. See Flatow v. Islamic
Republic of Iran, 999 F. Supp. 1 (D.D.C. 1998). Second, in
October 2000, Congress enacted legislation to use frozen Iranian
assets to pay the compensatory damages portion of the Flatow
judgment. See Victims of Trafficking and Violence Protection
Act of 2000, Pub. L. No. 106-386, § 2002, 114 Stat. 1464, 1541-
43. In January 2001, the U.S. Treasury paid Flatow $23 million,
of which Perles’s firm earned about $7 million in attorney’s fees
(which Perles in turn split evenly with his co-counsel Fay in the
case).
3. In 1998, Perles took on a new case, Eisenfeld v. Islamic
Republic of Iran. As in Flatow, the plaintiffs in Eisenfeld
sought damages from the Iranian government for terrorist
attacks against their family members. Kagy assisted Perles on
the Eisenfeld case. As with Flatow, Perles and Kagy did not
reach a written agreement for Kagy’s compensation on this case.
Kagy left the firm in 1999, before the Eisenfeld case was tried
or concluded, although she apparently continued to do some off-
site work for Perles at a rate of $50 per hour. In July 2000, the
6
trial court found Iran liable and awarded damages in excess of
$327 million, including $27 million in compensatory damages
(meaning about $9 million in fees for Perles’s firm to be divided
with co-counsel Fay). See Eisenfeld v. Islamic Republic of Iran,
172 F. Supp. 2d 1 (D.D.C. 2000).
4. Upon learning that Perles would recover millions of
dollars in fees for his work (as a result of the legislation freeing
up frozen Iranian assets), Kagy contacted Perles’s co-counsel by
telephone in October 2000 to secure her share of the money.
The conversations did not go well (to put it mildly). Shortly
thereafter, Perles filed suit against Kagy in the District Court.
Perles sought a declaratory judgment that he should pay Kagy
on an hourly basis for her work on the Flatow and Eisenfeld
cases. Kagy filed a counterclaim in which she asserted that she
and Perles had an oral contract entitling her to one-third of
Perles’s fees in Flatow and Eisenfeld. Both parties agreed, as
they do on appeal, that District of Columbia law governs their
respective claims.
After a bench trial, the District Court found that Perles and
Kagy had an express oral contract entitling Kagy to one-third of
Perles’s fee in Flatow, meaning Kagy would recover more than
$1.3 million for her work on that case. In the court’s judgment,
the oral contract did not cover Kagy’s work on Eisenfeld (nor
did the parties have any enforceable contract on Eisenfeld).
Instead, the court ruled that Kagy would receive only equitable
compensation for her work on the Eisenfeld case. The court
determined the amount of Kagy’s recovery for her work on
Eisenfeld by multiplying the number of hours Kagy worked on
the case by an hourly rate of $283 (which was Perles’s average
hourly rate). Applying this formula, the District Court awarded
Kagy about $47,000 for her work on Eisenfeld.
On appeal, Perles contends that the District Court erred in
7
concluding that the parties had an enforceable contract on the
Flatow case. Perles further argues that the District Court did not
apply a correct formula for assessing Kagy’s equitable recovery
for her work on Eisenfeld. For her part, Kagy seeks affirmance
of the District Court’s judgment in Flatow; and as to Eisenfeld,
Kagy claims that the District Court erred in concluding that the
parties did not have a contract entitling her to one-third of
Perles’s fee.
II
We turn first to the question whether Perles and Kagy had
an enforceable contract for Kagy’s work on the Flatow case.
Relying on Kagy’s testimony about the parties’ May 1997
telephone conversation, the District Court found that the parties
entered into an oral contract entitling Kagy to one-third of
Perles’s fee in that case. We review de novo the legal question
whether the facts as found by the District Court demonstrate the
existence of an enforceable contract. See Hershon v. Gibraltar
Bldg. & Loan Ass’n, 864 F.2d 848, 852 (D.C. Cir. 1989). We
accept the factual findings underlying the District Court’s
contract determination unless they are clearly erroneous. Id.
Under District of Columbia law, a valid and enforceable
contract requires both: (1) intention of the parties to be bound;
and (2) agreement as to all material terms. See Simon v. Circle
Assocs., 753 A.2d 1006, 1012 (D.C. 2000); see also Jack Baker,
Inc. v. Office Space Dev. Corp., 664 A.2d 1236, 1238 (D.C.
1995); Georgetown Entm’t Co. v. District of Columbia, 496
A.2d 587, 590 (D.C. 1985). The party asserting the existence of
an oral contract has the burden of proving both requirements.
See New Econ. Capital, LLC v. New Mkts. Capital Group, 881
A.2d 1087, 1094 (D.C. 2005).
Applying those principles to this case, we conclude for
8
either of two alternative reasons that Kagy failed to prove that
the parties entered into an enforceable oral contract as to Kagy’s
work on the Flatow case. First, even assuming that the District
Court properly credited Kagy’s testimony concerning the May
1997 telephone conversation, the evidence presented by Kagy
does not show that both parties intended to create an enforceable
oral contract. Second, again accepting Kagy’s own version of
the facts, the parties did not agree on two essential elements of
the contract: how long Kagy would have to work on the case and
what kind of work she would have to do.
1. To create an enforceable oral contract, both parties must
intend to be bound by their oral representations alone. See New
Econ. Capital, 881 A.2d at 1094; Jack Baker, Inc., 664 A.2d at
1238. An otherwise valid oral agreement does not constitute a
contract if “either party knows or has reason to know that the
other party regards the agreement as incomplete and intends that
no obligation shall exist . . . until the whole has been reduced to
. . . written form.” RESTATEMENT (SECOND) OF CONTRACTS §
27 cmt. b (1981); cf. Osborne v. Howard Univ. Physicians, Inc.,
904 A.2d 335, 339 (D.C. 2006) (relying on RESTATEMENT OF
CONTRACTS); Stansel v. Am. Sec. Bank, 547 A.2d 990, 993
(D.C. 1988) (same). The fact that parties contemplate a writing
is evidence, therefore, that they do not intend to bind themselves
by an oral agreement. See Jack Baker, Inc., 664 A.2d at 1240;
Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 547 (D.C. 1981).
Another factor in determining intent to be bound is the parties’
conduct after they reach an alleged oral agreement. See Duffy
v. Duffy, 881 A.2d 630, 637 (D.C. 2005); Edmund J. Flynn Co.,
431 A.2d at 547; see also Novecon, Ltd. v. Bulgarian-Am. Enter.
Fund, 967 F. Supp. 1382, 1388 (D.D.C. 1997). Under District
of Columbia law, courts determining whether parties intend to
be bound by oral representations consider other factors as well,
including “whether the amount involved is large or small.” Jack
Baker, Inc., 664 A.2d at 1240.
9
Applying the above principles to this case, we conclude that
Kagy has not met her burden of proving that she and Perles
intended to create an oral contract in their May 1997 telephone
conversation. Three considerations support that conclusion: the
fact that the parties clearly contemplated a written agreement;
the conduct of the parties after their May 1997 telephone
conversation; and the potentially large amount of money at issue
in the alleged oral agreement.
First, the evidence establishes that Kagy and Perles
discussed and contemplated a written agreement. In March
1997, Kagy drafted a proposed written contract providing that
she would recover one-third of Perles’s fee in Flatow. By
Kagy’s own admission, Perles refused to sign Kagy’s proposal
on the ground that it was “all wrong.” District Court Op. at 5
n.6. Kagy testified that she repeatedly asked Perles to reduce
their alleged one-third fee arrangement to writing after Perles
refused to sign Kagy’s proposal in March 1997. About a month
after their May 1997 telephone exchange, moreover, the parties
had a serious “altercation” arising out of “Kagy’s frustration at
not having a written fee agreement in place.” Id. at 9-10. The
evidence indisputably establishes, therefore, that the parties at
various points contemplated a written contract. Under settled
principles of District of Columbia contract law – principles that
were not addressed by the District Court in its opinion – the fact
that the parties contemplated a written agreement suggests that
the parties did not intend to be bound by oral representations
alone. New Econ. Capital, 881 A.2d at 1094; see Jack Baker,
Inc., 664 A.2d at 1240 (no oral contract found where “[i]t was
unquestioned that a written contract was contemplated as part of
the transaction”); Edmund J. Flynn Co., 431 A.2d at 547 (parties
did not intend to be bound by preliminary oral representations
where, among other things, a “written contract embodying the
completed contract was contemplated”); 1 ARTHUR LINTON
10
CORBIN, CORBIN ON CONTRACTS § 2.9 (Joseph M. Perillo ed.,
rev. ed. 1993) (“The fact that the parties contemplate the
execution of a document is some evidence, not in itself
conclusive, that they intend not to be bound until it is
executed.”).
Second, the parties’ conduct after the May 1997 telephone
conversation is a separate factor suggesting that the parties did
not intend to create an oral contract. Perhaps most telling, the
trial evidence does not reveal any conduct of the parties after the
May 1997 conversation that supports Kagy’s assertion that they
created a binding contract in that conversation. In fact, Kagy
testified that she did not draft a written agreement reflecting the
terms of the May 1997 telephone conversation because she was
concerned that Perles would not sign it. Kagy also testified that
“on numerous occasions” after the May 1997 exchange, she
tried to persuade Perles to “sit down and work it out,” but Perles
“always refused to do so.” J.A. 723. The context of Kagy’s
statement makes clear that what had to be “worked out” was
Kagy’s compensation in Flatow, which suggests that no final
agreement had been reached in the May 1997 telephone
conversation. In short, the evidence of the parties’s conduct
after the May 1997 conversation does not indicate that the
parties intended to be bound by the conversation. See Duffy,
881 A.2d at 637 (assessing intention to be bound by letter
agreement by considering appellant’s actions during the year
and a half after the parties signed the letter); Edmund J. Flynn
Co., 431 A.2d at 547 (“subsequent negotiations about drafts of
a written sales commission agreement reflect the parties’
intention not to be bound until a formal writing was executed”);
see also Novecon, 967 F. Supp. at 1388 (noting that “the
subsequent actions taken by both parties is relevant” and
“should be taken into consideration to determine whether a
binding contract existed”).
11
Third, the potentially large fee award in the Flatow case
further suggests that Perles and Kagy did not intend to be bound
by their oral conversation. Perles’s client in Flatow was
eventually awarded more than $200 million in damages from the
Iranian Government. Perles has received several million dollars
so far in fees (and could receive far more in the future if
additional assets become available to cover the punitive
damages awards). It strains credulity to suggest that Perles and
Kagy, both of whom are attorneys, intended a single,
undocumented telephone conversation to give rise to a mutually
binding agreement giving a junior attorney the potential right to
millions of dollars in compensation for her work. See Jack
Baker, Inc., 664 A.2d at 1240 (“whether the amount involved is
large or small” is one factor to consider in determining whether
parties entered into an enforceable oral agreement; oral
representations did not create binding contract where subject of
the alleged agreement “was a major project, involving a
considerable amount of money”); see also RESTATEMENT
(SECOND) OF CONTRACTS § 27 cmt. c (“whether the amount
involved is large or small” is factor “which may be helpful in
determining whether a contract has been concluded”); 1 CORBIN
ON CONTRACTS § 2.9 (“The greater the . . . importance of the
transaction, the more likely it is that the informal
communications are intended to be preliminary only.”).
To recap, three considerations support the conclusion that
the parties did not intend to be bound by the terms of their May
1997 telephone conversation: the fact that the parties clearly
contemplated a written contract; the parties’ post-conversation
conduct evincing lack of agreement; and the large amount of
money at stake. Kagy does not cite other relevant factors under
District of Columbia law that support her claim; and she does
not point to any concrete evidence establishing or even
suggesting that both parties intended the May 1997 telephone
conversation to give rise to a binding agreement. See Jack
12
Baker, Inc., 664 A.2d at 1240 (dismissing breach of contract
claim where party asserting oral contract failed “to put forth
sufficient evidence” of intention to be bound); Edmund J. Flynn
Co., 431 A.2d at 547 (no oral contract where “there [was]
substantial evidence in the record that a binding written sales
commission contract did not exist and that only preliminary
negotiations were underway.”). Given this record, Kagy plainly
did not meet her burden under District of Columbia law to show
the existence of an oral contract. See New Econ. Capital, 881
A.2d at 1094; Jack Baker, Inc., 664 A.2d at 1239 (“[P]arties will
not be bound to a preliminary agreement unless the evidence
presented clearly indicates that they intended to be bound at that
point.”).
2. Even if Perles and Kagy intended to be bound by the
terms of their May 1997 conversation, Kagy’s contract claim
still would fail. Under District of Columbia law, “[t]o be final,
contract negotiations must include all of the terms which the
parties intended to resolve; material terms cannot be left to
future settlement.” Edmund J. Flynn Co., 431 A.2d at 547.
Agreement on the work to be done is a material term of a
services contract. See, e.g., New Econ. Capital, 881 A.2d at
1096 (parties “did not enter into an enforceable oral contract”
where they “did not agree on . . . whether consulting services
should be rendered” as well as fundraising services); Stansel,
547 A.2d at 993 (no oral contract existed because the parties
failed to offer “evidence of any specific terms of the alleged
agreement, such as the . . . manner of performance”). Even
assuming that the District Court properly credited Kagy’s
testimony, Perles and Kagy did not agree on two essential
elements of a services contract – how long Kagy would have to
work on the case to obtain one-third of Perles’s fee, and what
kind of work she would have to do to earn such a potentially
massive payment.
13
First, even though the parties knew that the Flatow
litigation would likely take many years and could not yield any
fee until the “quite distant future,” they did not address how long
Kagy would have to work on Flatow to recover a one-third share
of Perles’s fee. See District Court Op. at 4; see also id. at 3
(“years in the future”). The Flatow litigation had just started
when the parties discussed Kagy’s compensation in May 1997.
Indeed, Perles initially “was reluctant to engage [Kagy] fully in
the preparation and presentation of the case” because he thought
Kagy might “depart for another firm at a critical stage.” District
Court Op. at 4. Perles affirmatively “anticipat[ed] her departure
before Flatow had borne fruit.” Id. Under these circumstances,
the parties could not reach a complete agreement without
deciding how long Kagy would have to work on the case in
order to secure a third of Perles’s fee. See Edmund J. Flynn Co.,
431 A.2d at 547 (“[N]o sales commission contract was created
because there never was any agreement on the material terms of
compensation and termination.”) (emphasis added). The parties
made no such decision. Indeed, at trial, Kagy admitted that she
and Perles did not reach any meeting of the minds as to the
scope of her duties in Flatow. She was asked: “Was there any
agreed definition of what it meant to work on a case?” And she
responded: “No.” J.A. 705.
Second, the parties also failed to spell out the kind of work
Kagy would have to perform in order to receive a third of
Perles’s fee. For example, was Kagy expected to perform
standard junior attorney work? Or was she instead required to
take on a more substantial role in the litigation? We do not
know because the parties did not specify the kind of work Kagy
would have to do. Again, Kagy herself testified that the parties
did not have any “agreed definition of what it meant to work on
a case.” J.A. 705.
Kagy argues that the parties’ prior course of dealing
14
supplied a reasonably certain definition of what it meant for her
to “work on” a case – including both the required length of her
service and the kind of work she would have to do. Cf. Rinck v.
Ass’n of Reserve City Bankers, 676 A.2d 12, 16 (D.C. 1996)
(oral agreement to continue employment “involved the
continuation of [the employee’s] existing employment and there
was no reason for [the parties] to deal with the material terms
that would remain the same”). As to length of service, Kagy has
asserted with notable lack of precision that she would have to
work “just as she had in the Holocaust Claims.” Kagy’s Br. at
23. And as to the kind of work, Kagy would simply do what she
did in past cases: “perform legal and factual research, draft
briefs and pleadings, and provide general litigation support.”
Kagy’s Br. at 22.
The parties’ prior course of dealing in other cases does not
shed light on the length and scope of Kagy’s duties in Flatow
because Flatow is not at all comparable to the other matters on
which Kagy worked. In particular, Kagy makes far too much of
the fact that she received one-third of Perles’s fee in the
“Holocaust Claims.” Unlike Flatow, the Holocaust claims
involved relatively straightforward and short administrative
proceedings, not terrorism-related litigation against a foreign
sovereign requiring years of evidence-gathering, research, and
preparation. Compare District Court Op. at 7 (explaining that
Perles’s firm worked on Flatow for more than five years) with
id. at 4 n.4 (noting that the firm handled about 20 Holocaust
claims over a period of three years). Indeed, Kagy earned only
$20,000 over a period of three years for her work on the
Holocaust administrative claims matters even though Perles paid
her one-third of his fee in nine successful claims. Given those
substantial differences, the administrative matters are plainly
insufficient to demonstrate a course of dealing that would
support Kagy’s claim to one-third of Perles’s fee in Flatow.
See, e.g., Ginberg v. Tauber, 678 A.2d 543, 546-47, 552 (D.C.
15
1996) (attorney’s “‘course of dealing’ with his client provided
no guidance in determining a reasonable fee for the . . .
litigation” where attorney sought $3.75 million for his work on
the case at issue but had charged the same client between $1000
and $45,000 for prior representations).
In sum, Kagy’s own version of the facts establishes that the
parties did not agree on two material terms of their alleged oral
agreement: how long Kagy would have to work on Flatow and
what kind of work Kagy would have to do in that case. Because
Flatow differed from Kagy’s other work in significant ways, no
prior course of dealing fills those critical gaps. As a result, and
for that independent reason as well, Perles and Kagy did not
enter into an enforceable contract as to Flatow.
III
Kagy argues that she had an enforceable contract with
Perles for one-third of Perles’s fee not just for her work on
Flatow but also for her work on Eisenfeld. As Kagy has claimed
throughout the litigation, however, she and Perles had the
“same” deal in Eisenfeld that they had in Flatow. Kagy’s Br. at
10, 33; J.A. 863-64. Because the parties had no enforceable
contract for Kagy’s work on Flatow, they likewise had no
enforceable contract for her work on Eisenfeld. We therefore
affirm the District Court’s judgment that Kagy does not have a
contractual right to one-third of Perles’s fee in the Eisenfeld
matter.
IV
Although the parties had no contract, Kagy is of course
entitled to recover equitable compensation for her work on the
Flatow and Eisenfeld cases. See Ginberg v. Tauber, 678 A.2d
543, 551 (D.C. 1996) (under District of Columbia law, when
16
“there is no agreement concerning how the amount of [an
attorney’s] fees is to be calculated,” the trial court “determines
the amount of the fee”). Many attorney’s fees cases involve
either (i) a dispute between a client and the client’s attorney or
(ii) a dispute between the opposing parties in litigation – not a
dispute such as the one here between two attorneys in the same
firm. Cases involving the more typical disputes nonetheless
provide basic guidance that informs the fees analysis in this
case. Cf. Frazier v. Franklin Inv. Co., 468 A.2d 1338, 1341 n.2
(D.C. 1983) (standards governing reasonableness of fee award
“apply to the assessment of attorney fees in general”).
Under District of Columbia law, an attorney seeking
equitable compensation must present proof of the reasonable
value of the services rendered. See Ginberg, 678 A.2d at 551-
52; Jonathan Woodner Co. v. Laufer, 531 A.2d 280, 287 (D.C.
1987). The ordinary measure of reasonable value is the market
price of the services performed. Sastry v. Coale, 585 A.2d 1324,
1329 (D.C. 1991). District of Columbia courts generally
compute an attorney’s equitable compensation by multiplying
the total number of hours reasonably expended on the case by
the attorney’s reasonable hourly rate. Ginberg, 678 A.2d at 551-
52 & nn.11-12.
Applying those principles, we reach the following
conclusions: We affirm the District Court’s factual finding as
to the number of hours Kagy worked on the Eisenfeld case
(167.23 hours). We remand for the District Court to assess the
total number of hours Kagy reasonably worked on the Flatow
case. That leaves the question of Kagy’s reasonable hourly rate.
The District Court determined that Kagy should be paid an
hourly rate of $283 for her work in Eisenfeld. The court reached
that result by using Perles’s hourly rate (not Kagy’s hourly rate)
as the starting point of its analysis. Because Kagy seeks
compensation for her own work, her own hourly rate ($50 per
17
hour) is a more appropriate starting point for valuation of her
services. Perles has represented to this Court, however, that he
would pay Kagy $150 per hour for her work on the two cases.
Perles’s Reply Br. at 18; Tr. of Oral Arg. at 12-13. We therefore
accept $150 as the floor for Kagy’s reasonable hourly rate and
remand to the District Court to determine whether District of
Columbia law authorizes an equitable adjustment that could
yield a rate higher than $150 per hour. On remand, the District
Court may also consider the availability under District of
Columbia law of pre-judgment interest in a case of this kind, a
question we do not decide here. See D.C. Code § 15-109;
Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 550 n.6 (D.C.
1981).
Finally, we dismiss as moot the appeal by Thomas Fay
(Perles’s co-counsel in the Flatow and Eisenfeld cases) of the
District Court’s denial of Fay’s motion to intervene. As Fay
acknowledges, he moved to intervene in the District Court “for
the limited purpose of challenging the proposed use by [Perles]
. . . of money in a trust fund to which Mr. Fay claimed
ownership.” Fay’s Br. at 2; see also J.A. 69 (District Court:
“Fay seeks to intervene solely for the limited purpose of
opposing [Perles’s] motion to waive the supersedeas bond.”);
J.A. 224 (Fay’s motion to intervene). Perles posted a bond using
money from that trust fund “as security for the judgment
pending appeal.” J.A. 79. As a result of our decision today, that
judgment is vacated. The bond that was the basis for Fay’s
attempted intervention will now be released, and Fay’s appeal
of the District Court’s denial of his motion to intervene is
therefore moot. We note that Fay’s reply brief did not dispute
Perles’s suggestion that Fay’s appeal would be moot if the
judgment in favor of Kagy were vacated by this Court. See
Perles’s Reply Br. at 47 n.36.
18
V
As a matter of law, Perles and Kagy did not have an
enforceable contract with respect to Kagy’s work on the Flatow
or Eisenfeld cases. We therefore reverse the District Court’s
decision that there was a contract in the Flatow case; we affirm
the District Court’s decision that there was no contract in the
Eisenfeld case. We vacate the District Court’s judgment with
respect to compensation as to Flatow and Eisenfeld and remand
for the District Court to calculate Kagy’s appropriate equitable
compensation for her work on the two cases.
So ordered.