United States Court of Appeals
For the First Circuit
No. 03-1471
ANGEL L. RIVERA-DOMENECH,
Plaintiff, Appellee,
v.
CALVESBERT LAW OFFICES PSC,
Intervening Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Justo Arenas, U.S. Magistrate Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lynch, Circuit Judge.
Paul E. Calvesbert, Enrique A. Báez, and Calvesbert Law
Offices PSC on brief for appellant.
March 29, 2005
Per Curiam. This case involves the efforts by an
attorney to convince a federal court to permit him to withdraw his
appearance or at least require that his client pay him for his work
in a trial. Attorney Paul E. Calvesbert (or more accurately, his
professional services corporation) represented Rivera-Domenech in
an admiralty case in federal court between Angel L. Rivera-Domenech
and Quality Boat Services (and other defendants).
I.
We describe the facts as alleged by attorney Calvesbert.
In January 1998, Rivera-Domenech retained Calvesbert to represent
him in the underlying admiralty action (for simplicity, we refer to
the law firm and the lawyer collectively with the lawyer's name).
In late February 1998, Calvesbert sent Rivera-Domenech a fee
agreement, which Rivera-Domenech executed on March 2, 1998. In
April of 1998, Calvesbert filed a federal complaint for Rivera-
Domenech against Quality Boat Services and other defendants, and
then proceeded to pursue the admiralty action. By October of 2000,
the lawyer and the client were in the middle of a fee argument.
According to Calvesbert, Rivera-Domenech by then owed him more than
$10,000.
The bench trial before a magistrate judge started on
October 16, 2001; the trial was then continued on October 17 until
November 7, 2001. A further series of reschedulings followed and
trial was ultimately set for April 23, 2002.
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On March 26, 2002, Calvesbert attempted to resolve the
fee amount owed, now around $60,000, by proposing in a letter that
Rivera-Domenech convert the representation agreement into a
contingency fee arrangement. Calvesbert gave a deadline of April
1 to respond or Calvesbert would file a motion to withdraw his
appearance in the case. On April 8, Rivera-Domenech responded. In
his response, Rivera-Domenech attacked the integrity of his lawyer;
no resolution was reached on the fees.
Calvesbert then moved to withdraw from representation for
lack of payment and irreconcilable differences on April 10, 2002,
and sought continuance of the April 23 trial date. Calvesbert did
not then ask in the alternative for the court to order the payment
of fees. On April 12, 2002, the magistrate judge denied the motion
to withdraw, without hearing, commenting only that "[t]he trial
will not be continued."
Calvesbert, on April 15, 2002, moved the court to
reconsider the denial of his motion to withdraw on the ground of
irreconcilable differences and argued that his fee agreement
permitted him to withdraw. A copy of the fee agreement was
attached and contained an arbitration provision:
Any controversy, claim or dispute in the
course and scope of the lawyer-client
relationship or arising out of or relating to
this Proposal or the breach, termination,
enforcement, interpretation or validity
thereof, including the determination of the
scope or applicability of this agreement to
arbitrate (hereinafter the "Dispute"), shall
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be determined by arbitration in San Juan,
Puerto Rico, before a sole arbitrator, in
accordance with the laws and rules of
professional conduct of the Commonwealth of
Puerto Rico. "Disputes" shall include,
without limitation, those involving fees,
costs, billing, claims of professional
negligence, malpractice and breach of ethical
or fiduciary duties. The arbitration shall be
administered by the American Arbitration
Association (AAA) pursuant to its Commercial
Arbitration Rules and Supplementary Procedures
for Large, Complex Disputes. The arbitrator
shall be a licensed attorney in Puerto Rico
and a member of the AAA Panel of Arbitrators.
This motion was also denied "[n]otwithstanding the deterioration of
the relationship between counsel and client." Calvesbert then
filed an "Urgent Appeal From Magistrate Judge's Orders" pursuant to
28 U.S.C. § 636(b)(1)(A) and the Local Rules of the District of
Puerto Rico. This "appeal" was an appeal to the district court
from the order by the magistrate judge, but it was denied by the
magistrate judge.1 Calvesbert did not seek to file an
interlocutory appeal to this court from the denial of the motion to
withdraw. The result was that Calvesbert was effectively required
1
We do not understand why this appeal was not ruled upon by
the federal district judge, who was the proper decision maker for
the appeal. See 28 U.S.C. § 636(b)(1)(A) ("A [district] judge of
the court may reconsider any pretrial matter [decided by the
magistrate]. . . where it has been shown that the magistrate
judge's order is clearly erroneous or contrary to law."). The
motion also referred to what was then Rule 510 of the Local Rules
of the District of Puerto Rico, which stated, "The [district] Judge
to whom the case is assigned shall consider the appeal and shall
set aside any portion of the Magistrate Judge Order found to be
clearly erroneous or contrary to law." D.P.R.R. 510. In any
event, this procedural problem was not raised on appeal before this
court.
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to continue to represent Rivera-Domenech, a hostile client, at
trial without payment at the time. Bench trial before the
magistrate judge was held on April 23, 25, and May 13, and the
court, on its own motion, set further bench trial for six days in
September 2002, starting with September 3.
Trying another tack, Calvesbert sought an order that he
be paid reasonable fees because he was being forced to continue to
represent Rivera-Domenech by the court. Calvesbert moved to
intervene as a third-party plaintiff on June 17, 2002, against
Rivera-Domenech, to assert his attorney's fees claim. Rivera-
Domenech did not object. The magistrate judge allowed Calvesbert
permissive intervention on June 20, 2002. On August 5, 2002,
Calvesbert filed his first motion requesting an order from the
court that his client pay him the sums claimed -- $82,641.94 -- as
a corollary of the order denying his motion to withdraw. This was
before trial recommenced in September. The court on August 27,
2002, denied that motion without comment.
After the bench trial ended on September 13, 2002, the
court granted Calvesbert and Rivera-Domenech 20 days to meet and
settle their fee differences, and if they failed, to let the court
know so that a trial date for the intervenor claim for payment of
fees could be set. It is unclear what amount in fees Calvesbert
thought Rivera-Domenech owed at that point.
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On October 23, 2002, Rivera-Domenech filed a pro se
motion alerting the court to the arbitration clause in the original
fee agreement. The court treated the motion as a motion for an
order compelling arbitration of the fee dispute, ordered the
parties to undergo arbitration, and dismissed Calvesbert's
intervening claim for payment of fees without prejudice on December
30, 2002.
II.
Calvesbert was ultimately unsuccessful in the attempt
below to obtain the desired relief from the district court: payment
of fees both from before and after the denial of the motion to
withdraw his appearance. Calvesbert presents four arguments on
appeal: 1) the district court erred by not allowing him to withdraw
before commencement of or during trial; 2) the district court
should have held a hearing on his motion to withdraw; 3) the
district court should have conditioned Calvesbert's continued
representation of Rivera-Domenech upon posting of adequate security
by Rivera-Domenech to cover reasonable attorney's fees; and 4) the
district court should not have sent the attorney's fee dispute to
arbitration. The client, Rivera-Domenech, has not filed a reply on
appeal.
We make a point clear at the start. At the time of the
entry of the denial of the motion to withdraw, there was
interlocutory jurisdiction to take an appeal to this court. See
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Fidelity Nat'l Title Ins. Co. of N.Y. v. Intercounty Nat'l Title
Ins. Co., 310 F.3d 537, 539 (7th Cir. 2002); Whiting v. Lacara, 187
F.3d 317, 319-20 (2d Cir. 1999). Calvesbert should have pursued
the interlocutory appeal at the time of the denial of his motion to
withdraw his appearance.2 In similar circumstances, circuit
courts, including this one, have found the denial of a motion to
withdraw to be an abuse of discretion. See, e.g., Fidelity, 310
F.3d at 540-41; Lieberman v. Polytop Corp., 2 Fed. Appx. 37, 39-40
(1st Cir. 2001) (unpublished opinion). In Lieberman, we reversed
the district court's denial of a motion to withdraw and explained:
It simply expects too much of counsel to
expend the additional energy necessary to go
to trial, and to front the necessary expenses,
without any real assurance that he will be
paid for any of it, especially where he
already is owed a substantial sum and the
client has violated the written fee agreement.
Further, if counsel does not expend the
necessary effort and does not front the trial
expenses, he very well could expose himself to
civil liability to his client. We refuse to
place counsel in such a position.
2
We do not suggest that Calvesbert waived his right to a final
appeal by failing to file an interlocutory appeal, only that he has
limited the relief available. The general rule is that failure to
take an interlocutory appeal does not automatically foreclose
review after final judgment. See 16 C. Wright et al., Federal
Practice and Procedure § 3921, at 19 (2d ed. 1996) ("[F]ailure to
take an available [interlocutory] appeal does not of itself waive
the right to secure review, on appeal from final judgment, of
matters that could have been appealed but were not.").
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2 Fed. Appx. at 39-40. Here, in addition, it is plain there was an
irretrievable breakdown between client and counsel, yet the court
refused to allow Calvesbert to withdraw.
By not taking an interlocutory appeal, Calvesbert has
effectively mooted any relief from the erroneous order denying his
motion to withdraw. He has now represented the client through the
trial. His claim that the district court should have held a
hearing on the motion to withdraw is similarly moot.
Moreover, as for Calvesbert's claim that the district
court should have conditioned his continued representation of
Rivera-Domenech upon the client's posting of adequate security, he
has waived the argument by not asking for such relief from the
district court in the proceedings below. See McCoy v. Mass. Inst.
of Tech., 950 F.2d 13, 22 (1st Cir. 1991).
That leaves Calvesbert's appeal from the order compelling
arbitration and dismissing his claim for fees without prejudice.
The only relief Calvesbert wants at this point is that the court,
not the arbitrator, decide the fee issue. Whether the district
court had ancillary jurisdiction to issue such an order is a nice
question. Two members of this panel conclude it did; one concludes
it did not. But we make no holding on the point.
Courts have rested the exercise of jurisdiction over fee
disputes related to proceedings before them on the doctrine of
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ancillary jurisdiction.3 See, e.g., Pay Tel. of Greater N.Y., Inc.
v. Sheridan, 766 F.2d 92, 94 (2d Cir. 1985) (explaining that "in
setting fees [due a withdrawing attorney] the district court is
exercising ancillary jurisdiction"); Jenkins v. Weinshienk, 670
F.2d 915, 918 (10th Cir. 1982) (considering "the scope of a federal
trial court's ancillary jurisdiction to adjudicate fee disputes").
A court's power to protect a lawyer against unfairness by
his client in the context of a motion to withdraw seems to be an
inherent power necessary to effectuate orderly judicial
proceedings. See, e.g., Fed. Sav. & Loan Ins. Corp. v. Ferrante,
364 F.3d 1037, 1041 (9th Cir. 2004) (surveying cases in which
courts had jurisdiction to resolve "attorney fee disputes
collateral to the underlying litigation").
But there are disagreements about the scope of that
jurisdiction. In Broughten v. Voss, 634 F.2d 880 (5th Cir. 1981),
the court held that the district court had no ancillary
jurisdiction, sua sponte, to make resolution of a fee dispute
between a law firm and its client a condition precedent for
granting the law firm's motion to withdraw. Id. at 881-83. As the
outcome in Broughten illustrates, whether ancillary jurisdiction
3
The Supreme Court has explained ancillary jurisdiction as a
way "to enable a court to function successfully, that is, to manage
its proceedings, vindicate its authority, and effectuate its
decrees." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
379-80 (1994); see also 13B C. Wright et al., Federal Practice and
Procedure § 3567.3, at 96 (Supp. 2004).
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exists over this particular dispute is a question over which
reasonable minds may disagree. However, the particular facts of
this case make it unnecessary to resolve this question
definitively.
Regardless of the jurisdictional issue, the resolution
that Calvesbert must go through arbitration is correct. Calvesbert
wanted the district court to resolve the fee dispute in his favor,
but "the strong federal policy favoring arbitration agreements . .
. requires us to resolve any doubts concerning arbitrability in
favor of arbitration," Commercial Union Ins. Co. v. Gilbane Bldg.
Co., 992 F.2d 386, 388 (1st Cir. 1993) (internal quotation marks
omitted). Calvesbert had agreed in his original fee agreement to
have an arbitrator decide the fee dispute, not the court. There is
no unfairness: Calvesbert drafted the original fee agreement
referring all disputes to arbitration. Nor did Rivera-Domenech
waive his rights to demand arbitration.
We dismiss Calvesbert's appeal for lack of merit. No
costs are awarded.
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