Frank Loreto v. Bernie Romano et al. 2015 ONSC 898
COURT FILE NO.: 10-CV-407497
DATE: 20150223
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANK LORETO
Plaintiff (Responding Party)
– and –
BERNIE ROMANO and BERNIE ROMANO PROFESSIONAL CORPORATION
Defendants (Moving Parties)
Jayson Thomas, for the Plaintiff (Responding Party)
Sandra L. Secord, for the Defendants (Moving Parties)
HEARD: October 15, 2014
REASONS FOR DECISION
FIRESTONE J.
[1] The defendants Bernie Romano and Bernie Romano Professional Corporation (“the Romano defendants”) bring this motion for Summary Judgment under Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“the Rules”) dismissing the claim of the plaintiff Frank Loreto (“Loreto”).
[2] The basis of the plaintiff’s claim is the assertion that the plaintiff’s retainer with the defendants either at its inception or during the term of the retainer included the obligation to seek charging orders on certain files transferred by clients of the plaintiff’s previous law firm to another law firm comprised of members of the plaintiff’s former law firm. It is alleged that the defendants failed or refused to do so in breach of the terms of the retainer agreement.
Background and Analysis
[3] Loreto is a lawyer who practices in the area of personal injury law. He employed a number of lawyers and law clerks in his former law firm. Various lawyers and law clerks left the plaintiff’s former law firm on or about June 12, 2008. These lawyers and/or their clerks obtained approximately 225 signed authorizations terminating their retainer with the plaintiff’s former law firm and authorized the transfer of their ongoing files to the new law firm made up of these lawyers and law clerks.
[4] On July 21, 2008, following the breakup of the law firm, an action was commenced against these former lawyers and law clerks.
[5] In September 2008, Loreto retained the Romano defendants to take over carriage of the dissolution action from another solicitor who had been originally retained.
[6] On September 17, 2008, Loreto signed a retainer letter dated September 16, 2008 prepared by Bernie Romano regarding the dissolution action. The retainer letter does not make any reference to a charging order.
[7] On September 17, 2008, Loreto signed a written retainer agreement regarding the dissolution action. That retainer stipulates, in part, that Bernie Romano Professional Corporation is retained “to take such actions and conduct such proceedings as you consider necessary or proper for the conduct of such action.” The retainer goes on to state that “instructions for the conduct of the above action will be received by me.” The written retainer agreement makes no reference to a charging order. There were no verbal instructions given by Loreto at the time the retainer agreement was signed indicating or requesting that such charging orders were to be obtained and that they formed part of the retainer.
[8] There is no evidence that the pursuit of such charging orders formed part of the retainer between Loreto and the lawyer who was acting in the dissolution action prior to the Romano defendants’ retainer, or that charging orders were previously being sought against the plaintiff’s former clients to whom an account has been rendered. None of the former clients were named as defendants in the dissolution action and no separate action had been commenced against them.
[9] In or around the time that the Romano defendants took over carriage of the dissolution action, there was an outstanding motion initially advanced by the plaintiff’s prior counsel to amend the statement of claim and add additional defendants and causes of action. The Romano defendants did obtain an order amending the statement of claim on December 1, 2008. Included in the amended claim was a claim for an order for interlocutory relief requiring the defendants in the dissolution action to pay the plaintiff an amount equal to 50% of the fees received on the files which had been transferred to the new law firm pursuant to the directions obtained.
[10] In addition to the first motion amending the statement of claim, a second motion for injunctive relief was outstanding at the time that the Romano defendants took over carriage of the dissolution action. That motion was for an intern preservation order, or alternatively, that the fees received be split 50/50 on an interim basis, or in the further alternative, that the new firm pay into court pending trial all fees collected on the transferred files.
[11] At the return of the injunction motion on December 16, 2008, the court ordered that the injunction motion be adjourned on terms. Two representatives of Loreto’s firm, a lawyer and articling student, were present along with Romano at that time. The court ordered, in part, that Loreto transfer all files for which there was a signed direction. In the court’s endorsement dated December 16, 2008, D.M. Brown J. (as he then was) stated “I gather no accounts have been rendered, in respect of those files, however plaintiff’s counsel asserts that a charging order may be available.”
[12] This statement in the endorsement does not, on its own, lead to the conclusion that the additional step of obtaining a charging order(s) formed part of the retainer agreement between the parties or that the Romano defendants were, based on the factual matrix of this case, obligated to pursue them. The statement does establish that both the Romano defendants and the representatives in attendance from Loreto’s firm knew at that time that such charging order(s) were or may be available. There is no evidence that the issue of such charging orders was ever discussed between the Romano defendants and Loreto prior to that court attendance on December 16, 2008. There is no evidence in the record from the members of Loreto’s firm who were present at that court attendance detailing the specifics of how or why the issue of a charging order(s) arose.
[13] On December 16, 2008, following the hearing of the injunction motion, Romano attended at Loreto’s office to discuss the endorsement obtained. On November 7, 2013, at his cross-examination on his affidavits sworn September 30, 2013 and November 4, 2013, Loreto deposed that his best recollection of what he said to Romano was that “we’re going to go for the charging orders.”
[14] Romano, at his November 7, 2013 cross-examination on his affidavits sworn January 14, 2013 and October 18, 2013, deposed that during that meeting that he told Loreto that “[i]f he wants to bring a charging order to let him know.” Romano further deposed that he disagreed with Loreto’s evidence given during his cross- examination that he repeatedly told him to get charging orders. Romano deposed: “Well, I notice in his Affidavit he says he repeatedly told me to get charging orders. That’s just not correct. He never did. If he had said, ‘Go get charging orders,’ I would have said, ‘Good. Give me the accounts right now.’ But I never got them. I never saw them. He never asked me to get a charging order.”
[15] In weighing the conflicting evidence regarding the discussions at Loreto’s office regarding such charging order(s) I note that Loreto was unclear about what was actually said. Romano, on the other hand, was unequivocal that he was not asked by Loreto to obtain such charging orders. Loreto at his cross-examination deposed “I told him to apply for charging orders” and that “you’re going to apply for charging orders.” When questioned further he then deposed that his best recollection of what was said is that “we’re going to go for the charging orders.” Loreto deposed that “we” should not be interpreted as meaning “me.”
[16] I accept Romano’s affidavit evidence on this point over that of Loreto. This is especially so given that, based on the evidence before me, the issue of the charging order had not been previously discussed between Loreto and Romano.
[17] On the evidence before me there is little dispute that both Loreto and Romano knew of the availability of a charging order(s) by the time of the court attendance on December 16, 2008. There is conflicting evidence regarding whether Loreto instructed Romano to move for such charging orders. There is no letter or email from Loreto to Romano at any time leading up to or following the injunction motion instructing Romano to obtain or consider obtaining a charging order prior to the court attendance and subsequent reference to a charging order in Justice Brown’s endorsement dated December 16, 2008.
[18] There is no email or letter confirming Loreto’s assertion that he told Romano to “proceed to move for charging orders.” Romano asserts that he told the plaintiff’s employees who were in attendance at the injunction motion on December 16, 2008 that he was unavailable to bring these motions. Loreto disputes this.
[19] There is no dispute that on December 18, 2008, two days after the injunction motion and the meeting that took place that day between Loreto and Romano, Romano provided a detailed reporting letter to Loreto regarding what had transpired at the injunction motion on December 16, 2008.
[20] In that letter Romano clearly states in part: “I will be out of the country from December 25, 2008 to January 12, 2009. Due to my schedule, I will not be able to bring any motions for charging orders in other files. I have already spoken to Mark and Mimi of your office relating to the charging order motions that are available to you. If there is a particular file where you think it is advisable to obtain a charging order relating to a transferred file, I will be prepared to discuss this issue with you on December 22, or 23, 2008, when I have availability for such a discussion. On those files, the motion could be brought on five days’ notice before the court during the weeks of January 5 and 12, 2009…Due to my schedule, as I said, I will not be able to bring these motions; however your associates can easily bring these motions with my assistance.” At no time did Loreto indicate in writing, or otherwise, that this was unacceptable.
[21] Romano asserts that the first time Loreto’s office suggested he should bring motions for charging orders and cancel any vacation plans to do so was during a conversation he had with Monika Liberek on December 22, 2008. Romano refused and understood based on that conversation that his retainer would be terminated.
[22] There is no evidence that Romano was ever provided with any accounts or at least the clients’ names and addresses regarding the client files which had been transferred in accordance with the court order of December 16, 2008.
[23] There is no evidence that Loreto or anyone on his behalf brought a motion for charging orders and/or sought an extension of time in which to bring them. No fee accounts were sent by Loreto to the clients for work done. This is, however, not necessarily a precondition to obtaining such a charging order. The preconditions to moving for a charging order as set forth in Aird & Berlis LLP v. Levy (2005), 2005 7885 (ON CA), 75 O.R. (3d) 44 (C.A.) are:
The solicitor was at some time employed to prosecute or defend a proceeding;
Property was recovered or preserved in that proceeding; and
The solicitor was instrumental in the recovery or preservation of that property.
[24] In Bilek v Salter (Estate), [2009] O.J. No. 4454, D. M. Brown J. states at para. 11:
“In order to obtain a charging order on property, a solicitor must demonstrate that:
(i) the fund, or property, is in existence at the time the order is granted: Langston v. Landen, [2008] O.J. No. 4936 (S.C.J.), paras. 28 and 29;
(ii) the property was “recovered or preserved” through the instrumentality of the solicitor: Kushnir v. Lowry, [2003] O.J. No. 4093 (C.A.) para 2; Higott and Higott (1989), 38 C.P.C. (2nd) 42 (Ont. Gen. Div.); Blue Resources Ltd. v. Sheriff (1996), 47 C.P.C. (3d) 200 (Ont. Gen. Div.); and
(iii) there must be some evidence that the client cannot or will not pay the lawyer’s fees: Kushnir v. Lowry, supra, para. 2; Budinsky v. The Breakers East Inc. (1993), 1993 5442 (ON SC), 15 O.R. (3d) 198 (Gen. Div.); Blue Resources Ltd. v. Sheriff, [1996] O.J. No. 1175 (Gen. Div.).”
Summary Judgment
[25] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 66 the court states:
On a motion for summary judgment under Rule 20.04, a judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute in a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
In Sweda Farms Ltd v. Egg Farmers of Ontario, 2014 ONSC 1200, aff’d. 2014 ONCA 878, at paras. 33-34, the court provided the following summary of the approach to be taken on a summary judgment motion:
(1) The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
(2) On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;
(3) If the court cannot grant judgment on the motion, the court should:
(a) Decide those issues that can be decided in accordance with the principles described in (2), above;
(b) Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues;
(c) In the absence of compelling reason to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.
[26] I am of the view that the record provides me with the evidence to adjudicate the dispute in a timely, affordable and proportionate procedure under Rule 20.04(2)(a). Based on such record, the defendants’ motion for summary judgment is granted.
[27] There is no evidence that Loreto ever, at any time prior to the injunction motion, stipulated that charging order(s) formed part of or were contemplated by the retainer agreement. The retainer agreement was in written form and contained specific wording that “instructions for the conduct of the above action will be received from me.” As a result it is reasonable to assume, given the nature of the retainer, the timing of the retainer and the timing of the events that transpired, that if something as important as a charging order either formed part of the original retainer, or was something based on subsequent discussions, such instruction requiring such a specific course of action would have been reduced to writing or that clear unequivocal verbal instructions would have been given in accordance with this specific term contained in the retainer agreement.
[28] This is especially so given that the subject of the retainer agreement was the dissolution action. I accept Romano’s evidence that it was only at the very end of the retainer agreement that any mention of charging order was raised for the first time. I accept Romano’s evidence, as indicated above, that he made it clear that, given the timing of when the issue first arose, he was not retained and he would not be pursuing such orders.
[29] In my view, Loreto could not have realistically expected Romano to pursue such charging orders at the last minute, especially given that no accounts had been rendered and there was therefore no evidence whether the clients could not or would not pay the lawyers’ fees.
[30] Loreto never advised Romano that he wanted Loreto to pursue such orders during the course of the retainer and raised it for the first time only after the motion before D. M. Brown J. Romano advised Loreto that he would not and could not pursue such charging orders and gave detailed reasons why. The issue of a charging order only came to light following the injunction motion just prior to the termination of Romano’s retainer.
[31] This is not a situation where Romano did not, following the injunction motion, communicate to Loreto his position that he would not and could not pursue such charging orders for the reasons given. To the contrary, Romano provided a detailed explanation why he would and could not bring them. Romano was not provided with any accounts or a list of client names and addresses in order to pursue the very charging orders Loreto argues he should have pursued.
[32] At no time did Loreto, or anyone his behalf, seek to mitigate by either taking steps to obtain a charging order(s) or by seeking an extension of the time in which to obtain them. There is no reason why this could not have been done. Further, the time in which to bring such charging orders did not expire during the time period Romano was counsel. At no time did Loreto or anyone on his behalf move for any charging orders.
[33] Based on the totality of the evidentiary record I find that it was not a term of the retainer agreement (either express or implied) that charging order(s) be pursued by Romano.
[34] If I am wrong in this conclusion, Romano expressly and clearly advised Loreto in writing that he would not be pursuing charging order(s) which were raised at the last minute and gave the reasons why. After this Loreto took no steps to obtain the charging orders he says Romano was obligated to pursue. In this case, Romano was not given any client accounts with proof that they were rendered, nor is there any evidence that the clients cannot or will not pay Loreto’s fees. In addition, Romano was not provided with a list of clients with the appropriate contact information.
Disposition
[35] As a result I find Loreto could not be successful in this action against the Romano defendants based on the unique factual matrix of this case. I therefore grant the Romano defendants’ motion for summary judgment dismissing this action.
[36] I wish to thank counsel for both the written and oral submissions which were exceptional. I encourage the parties to agree on costs. If they cannot, I may be contacted in order to set a timetable for their delivery.
Firestone J.
Released: February 23, 2015
Frank Loreto v. Bernie Romano et al., 2015 ONSC 898
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANK LORETO
Plaintiff (Responding Party)
– and –
BERNIE ROMANO and BERNIE ROMANO PROFESSIONAL CORPORATION
Defendants (Moving Parties)
REASONS FOR DECISION
Firestone J.
Released: February 23, 2015