Old West Enterprises, Inc. v. Reno Escrow Company
476 P.2d 1, 1970 Nev. LEXIS 605, 86 Nev. 727 (1970)
Rule of Law:
In an action for attorney's fees based on an account stated, the client's retention of a bill without objection creates only a rebuttable inference of agreement, and summary judgment is improper if the client raises a genuine issue regarding the fairness or reasonableness of the fees.
Facts:
- Old West Enterprises, Inc. received legal services from a specific attorney over a five-year period.
- The attorney rendered statements and fee charges to Old West totaling $6,836.89.
- Representatives of Old West questioned the attorney regarding the propriety, justifiability, and excessiveness of the legal charges during the period the bills were issued.
- The attorney assigned his claim for the unpaid money to Reno Escrow Company for the purpose of collection.
Procedural Posture:
- Reno Escrow Company (assignee/plaintiff) filed a complaint against Old West Enterprises, Inc. (defendant) in the district court to recover legal fees.
- Reno Escrow filed a motion for summary judgment supported by an affidavit claiming Old West did not object to the bills.
- Old West filed an answer and counter-affidavits challenging the propriety and excessiveness of the charges.
- The district court entered an order granting summary judgment in favor of Reno Escrow.
- Old West Enterprises, Inc. appealed the judgment to the Supreme Court of Nevada.
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Issue:
Is summary judgment appropriate in an action to collect attorney's fees based on an 'account stated' theory when the client presents evidence challenging the fairness of the charges and claiming prior objections were made?
Opinions:
Majority - Justice Mowbray
No, summary judgment is inappropriate because the client's mere retention of bills creates only a rebuttable inference of agreement, not a conclusive legal obligation. The court reasoned that an 'account stated' relies on an agreement between parties, express or implied. While silence upon receiving a bill can imply agreement, this inference can be overcome by evidence to the contrary. The court emphasized that attorney-client relationships are confidential and fiduciary in nature; therefore, an attorney cannot rely solely on the face of the bill but must be prepared to show the contract is fair and reasonable. Since Old West provided affidavits stating they had questioned the charges and considered them excessive, a genuine issue of material fact existed regarding the value of the services, necessitating a trial rather than a summary judgment.
Analysis:
This decision reinforces the high burden placed on attorneys when suing clients for fees. It prevents lawyers from using the doctrine of 'account stated' as a procedural trap to obtain summary judgment against clients who may have been passive or slow to object to bills in writing. The court highlights that the fiduciary nature of the attorney-client relationship requires judicial scrutiny of fee fairness when disputed. Practically, this means that if a client simply alleges that legal fees are unreasonable, the attorney will likely have to go to trial to prove the value of the work, rather than winning quickly on paper pleadings.
