Free Order - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 After a trial to the court, we found in favor of plaintiffs Shimko and Shimko and 19 Piscitelli and against the defendants Milton Guenther and Kathi Guenther in the amount of 20 $359,668.00. This was based upon plaintiffs' action on the account and in contract. This 21 mooted the claim for unjust enrichment. But we stated that if we "were to look simply at 22 unjust enrichment, we would reduce damages by an allocation of work simply to Guenther, 23 and we would reduce the fee from the contracted amount of $350.00 an hour to a lesser, more 24 reasonable amount." Order of May 19, 2005 at 3-4. (Doc. 127). 25 The court of appeals concluded that Shimko could not have reasonably believed that 26 Guenther was a general partner because he was Guenther's lawyer. It reversed our finding 27 that Guenther was liable as a general partner of the CORF entities and concluded that 28
Case 2:04-cv-00078-FJM Document 181 Filed 03/14/2008 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Timothy A. Shimko, Shimko & Piscitelli,) ) ) Plaintiffs, ) vs. ) ) David Goldfarb, Rhona Goldfarb, ) Richard Ross, Marcia Ross, ) Milton Guenther and Kathi Guenther; ) ) Defendants, ) ) Timothy A. Shimko, Shimko & Piscitelli,) ) Plaintiffs, ) vs. ) ) Paul Woodcock and ) Bobbi Woodcock, ) ) Defendants. ) ) No. CV-04-00078-PHX-FJM No. CV-05-1387-PHX-FJM [Consolidated] ORDER

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Guenther was "not personally liable for those attorneys' fees properly chargeable to the CORF entities." Shimko v. Guenther, 505 F.3d 987, 992 (9th Cir. 2007). The court remanded for a determination of the Guenthers' personal liability to Shimko "for any legal fees properly charged by Shimko to them for legal services performed for them as individuals." Id. at 993. After remand, we held a scheduling conference and ordered the parties to file simultaneous post-trial memoranda limited solely to the determination of the amount of fees in connection with the remand order on unjust enrichment and quantum meruit. Civil minutes of Dec. 7, 2007 at 2. (Doc. 162). We ordered Guenthers' lawyer to advise them of the need to file their memorandum by March 3, 2008, whether Guenther represented them or not. Id. The court now has before it "Plaintiffs' Post-Trial Memorandum on the Issue on Remand: Re-Determination of Damages Under Quantum Meruit/Unjust Enrichment" (doc. 174). The Guenthers have filed no memorandum. Shimko makes no effort to allocate which portion of the fees would be attributed to representing the Guenthers personally. Instead, Shimko suggests that we simply divide the total amount by four, since Guenther was one of four named defendants. And while we stated in our Findings and Conclusions that had we looked simply to unjust enrichment we would have reduced the fee from the contracted amount of $350.00 an hour to a lesser, more reasonable, amount, order of May 19, 2005 at 3-4 (doc. 127), Shimko asserts that his $350.00 rate was reasonable. The Guenthers have not opposed Shimko's suggestion. Accordingly, in the first step in recomputing damages under unjust enrichment, we shall divide $359,668.00 by four. This yields $89,917.00. We remain of the opinion that Shimko's hourly rate of $350.00 should be reduced in connection with a claim for unjust enrichment. Shimko is a Cleveland, Ohio lawyer who appeared in Arizona actions pro hac vice. He thus became subject to ER 1.5 of the Arizona Rules of Professional Conduct. Rule 42, Ariz. R. Sup. Ct. That rule requires fees to be reasonable, ER 1.5(a)(3), and in determining -2Case 2:04-cv-00078-FJM Document 181 Filed 03/14/2008 Page 2 of 3

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reasonableness one looks to the fee customarily charged in the locality for similar legal services, ER 1.5(a)(3), the results obtained, ER 1.5(a)(4), and the ability of the lawyer, ER 1.5(a)(7), among other factors. To be sure, the fees sought here occurred in many courts, but Shimko fails to show how this would matter. Having seen Shimko's work in this case, and with knowledge of what the customary rates for similar work in Phoenix, Arizona would be, we conclude that at least as to unjust enrichment, Shimko's rate should be reduced to two-thirds of his contract rate. That would yield a rate of $233.00 per hour. Multiplying the $89,917.00 dollar figure by two-thirds yields a fee of $59,945.00. Accordingly, pursuant to the mandate of the court of appeals, we now find in favor of plaintiff Shimko and Shimko and Piscitelli and against the defendants Milton Guenther and Kathi Guenther in the amount of $59, 945.00 on their claim for quantum meruit. This order constitutes the court's Findings and Conclusions under Rule 52(a), Fed. R. Civ. P. We note that Rule 54(b) certification earlier in this case resulted in piecemeal appellate litigation. This has led to needless complexity and protraction of the proceedings. We thus do not direct entry of judgment under Rule 54(b) at this time and instead final judgment shall abide the outcome of the remaining claims in the case. The remaining claims will be resolved pursuant to the existing Rule 16 scheduling order. The parties have been advised that it will not be amended. DATED this 13th day of March, 2008.

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