Rossabi Law Pllc v. Greater Greensboro Ent. Grp., LLC

Rossabi Law PLLC v. Greater Greensboro Ent. Grp., LLC, 2021 NCBC 31.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
GUILFORD COUNTY 18 CVS 9568

ROSSABI LAW PLLC f/k/a ROSSABI
REARDON KLEIN SPIVEY PLLC,

Plaintiff,

v.

GREATER GREENSBORO
ENTERTAINMENT GROUP, LLC
and N CLUB, LLC,
ORDER AND OPINION ON
Defendants, DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT
and

GREATER GREENSBORO
ENTERTAINMENT GROUP, LLC,

Third-Party Plaintiff,

v.

AMIEL ROSSABI,

Third-Party Defendant.

1. THIS MATTER is before the Court on the 21 August 2020 filing of

Defendants’ Motion for Summary Judgment (the “Motion”) pursuant to Rule 56 of the

North Carolina Rules of Civil Procedure (the “Rule(s)”). (ECF No. 56.)

2. For the reasons set forth herein, the Court DENIES the Motion.

Rossabi Law PLLC, by Gavin J. Reardon and Amiel J. Rossabi, for
Plaintiff Rossabi Law PLLC f/k/a Rossabi Reardon Klein Spivey PLLC
and Third-Party Defendant Amiel Rossabi.

Boydoh & Hale, PLLC, by J. Scott Hale, for Defendant and Third-Party
Plaintiff Greater Greensboro Entertainment Group, LLC and Defendant
N Club, LLC.

Robinson, Judge.
I. INTRODUCTION

3. This dispute arises out of legal services provided by Plaintiff and Third-

Party Defendant to Defendants and the parties’ disagreement regarding the payment

of Plaintiff’s legal fees.

II. FACTUAL BACKGROUND

4. The Court does not make findings of fact when ruling on motions for

summary judgment. “But to provide context for its ruling, the Court may state either

those facts that it believes are not in material dispute or those facts on which a

material dispute forecloses summary adjudication.” Ehmann v. Medflow, Inc., 2017

NCBC LEXIS 88, at *6 (N.C. Super. Ct. Sept. 26, 2017).

5. Third-Party Defendant Amiel Rossabi (“Rossabi”) is the managing partner

of Plaintiff Rossabi Law PLLC (“Plaintiff”). 1 (Aff. Amiel J. Rossabi ¶ 2, ECF No. 63

[“Rossabi Aff.”].)

6. Defendant N Club, LLC (“N Club”) owns property located on South Elm

Street in Greensboro, North Carolina, which N Club leases to Defendant Greater

Greensboro Entertainment Group (“GGEG” and with N Club collectively referred to

as “Defendants”). (Aff. Rocco Scarfone ¶ 7, ECF No. 58 2 [“Scarfone Aff.”].) GGEG

1 On 18 November 2020, Plaintiff filed the Motion to Amend Caption requesting that the

Court change the caption of this litigation to reflect Plaintiff’s change in name. (ECF No. 67.)
Plaintiff, formerly known as Rossabi Reardon Klein Spivey PLLC, changed its name with the
North Carolina Secretary of State and the North Carolina State Bar on 21 August 2020 to
Rossabi Law PLLC. On 23 November 2020, the Court entered the Order on Motion to Amend
Caption granting the Motion to Amend Caption to reflect Plaintiff’s name change. (ECF No.
69.)
2 In filing Defendants’ Brief in Support of Defendants’ Motion for Summary Judgment,

counsel for Defendants filed their brief in support of the Motion and all the exhibits submitted
in support of the Motion as one .pdf document. (See ECF No. 58.)
operates a music venue at the leased property, which is known as the Cone Denim

Entertainment Center (“CDEC”). (Scarfone Aff. ¶ 7.)

7. Rocco Scarfone (“Scarfone”) is a member and manager of Defendants.

(Scarfone Aff. ¶ 2.) Scarfone is also the President of GGEG. (Scarfone Aff. ¶ 3.)

8. At all times relevant to this litigation, Rossabi was a member of GGEG.

(Scarfone Aff. ¶ 6.)

9. Jeffrey Furr (“Furr”) is a member of Defendants. (Aff. Jeffrey Furr ¶ 2, ECF

No. 58 [“Furr Aff.”].) Furr is also the Vice President of GGEG. (Furr Aff. ¶ 3.)

10. Pursuant to Section 3.3 of GGEG’s Operating Agreement,

The Vice-President of [GGEG] shall be notified of all legal matters
including but not limited to leases, contracts, agreements, fees, and
major expenditures of [GGEG] prior to their being incurred. “Major
Expenditure” is defined as any expenditure exceeding Ten Thousand
Dollars ($10,000.00)[.] Prior to entering any of the above or a Major
Expenditure, the Vice-President and President shall discuss and
mutually agree. Upon the event they do not agree then an agreement
will be reached by a Majority in Interest of the Members.

(Scarfone Aff. Ex. 2 § 3.3 [“Operating Agreement”].) Scarfone owns the Majority in

Interest of the Members as defined by GGEG’s Operating Agreement. (Rossabi Aff.

¶ 69.)

11. Rossabi has represented Defendants and Scarfone as their legal counsel for

more than ten years. (Rossabi Aff. ¶ 5.) Rossabi contends that he and Plaintiff have

implemented various billing arrangements throughout their representation of

Defendants and Scarfone, including hourly rates, bartering, a contingency fee basis,

and providing services at no cost. (Rossabi Aff. ¶ 5.) Scarfone contends that Rossabi
and Plaintiff have represented GGEG pursuant to an hourly rate fee agreement since

2014. (Scarfone Aff. ¶ 8.)

12. During July 2017, Scarfone received a letter from the City of Greensboro

(the “City”) indicating that the City purchased property behind the CDEC and the

City intended to condemn N Club’s access easement and terminate GGEG’s shared

parking agreement for the leased property. (Scarfone Aff. ¶ 10; see also Compl. ¶ 20,

ECF No. 3.)

13. Scarfone engaged Plaintiff to represent Defendants to prevent the City from

proceeding with its plan to condemn N Club’s access easement and terminate GGEG’s

shared parking agreement. (Rossabi Aff. ¶ 9; Scarfone Aff. ¶ 11.) At the initial stages

of the dispute between Defendants and the City, Plaintiff represented Defendants on

an hourly basis. (Furr Aff. ¶ 8; Rossabi Aff. ¶ 15; Scarfone Aff. ¶ 12.)

14. On 24 October 2017, the City and N Club entered into the Professional

Services Review Agreement (the “PSA”). (Rossabi Aff. Ex. D; ECF No. 63.4 [“PSA”].)

Pursuant to the terms of the PSA, the City was to pay or reimburse N Club for

preliminary inspections, review, and analysis of the City’s condemnation plan up to

forty-five thousand dollars ($45,000), which included reimbursement of legal fees

incurred by Defendants. (PSA ¶ 4; see also Rossabi Aff. ¶ 26.)

15. Plaintiff contends that the PSA was intended to be a limited agreement.

(Rossabi Aff. ¶ 29.) Scarfone contends that the PSA covered all of Plaintiff’s legal fees

through 19 December 2017. (Scarfone Aff. ¶ 17.)
16. On 19 December 2017, against Defendants’ wishes, the Greensboro City

Council approved the City’s condemnation of N Club’s access easement and the

termination of the shared parking agreement. (Rossabi Aff. ¶¶ 10, 34.) At the 19

December 2017 City Council meeting, the City publicly adopted a resolution

authorizing the payment of Defendants’ legal fees. (Scarfone Aff. ¶ 20.)

17. Plaintiff’s initial engagement with Defendants, as it pertains to the CDEC,

was limited to Plaintiff’s work related to stopping the City from approving

condemnation of N Club’s access easement. (Rossabi Aff. ¶ 36.) Accordingly, it is

Plaintiff’s position that Plaintiff’s initial representation of Defendants and the hourly

rate agreement terminated on 19 December 2017 when the City approved the

condemnation plan. (Rossabi Aff. ¶ 36.)

18. Approval of the condemnation meant that Defendants, at the advice of

Plaintiff, would need to file a lawsuit against the City to seek protection against the

loss of the easement and shared parking agreement (the “Cone Denim Action”).

(Rossabi Aff. ¶ 36; see also Compl. ¶ 36.) Between 20 December 2017 and 19 January

2018, Plaintiff drafted a complaint and motion for temporary restraining order and

preliminary injunction, which were ultimately filed. (Rossabi Aff. ¶¶ 42, 47.)

19. Defendants believed that at all times after 19 December 2017, the City was

obligated to pay Defendants’ legal fees incurred in the Cone Denim Action. (Scarfone

Aff. ¶¶ 21, 24.) Rossabi contends that Scarfone represented to Rossabi that

Defendants could not pay an hourly rate for Plaintiff’s legal services in the Cone

Denim Action; therefore, Scarfone asked if Plaintiff could represent Defendants on a
contingency fee basis going forward, and Rossabi agreed on Plaintiff’s behalf.

(Rossabi Aff. ¶¶ 37, 39–40.)

20. Beginning on 20 December 2017, Rossabi contends that Plaintiff

represented Defendants on a one-third (1/3) contingency fee basis. (Rossabi Aff. ¶

41.) Rossabi did not immediately draft an agreement but waited until 25 January

2018 to draft the contingency fee agreement (the “Contingency Agreement”). (Rossabi

Aff. ¶¶ 41, 48.)

21. The Contingency Agreement provides in part that Plaintiff

will represent [Defendants] with respect to the [Cone Denim Action],
with the understanding that [Plaintiff] will receive a contingent fee
equal to 331�3% of the amount of recovery. The recovery shall mean any
compensation GGEG and/or N Club receive, whether through
settlement or otherwise related to the [Cone Denim Action]. If some or
all of the compensation is not monetary, the value of such compensation
shall be calculated to determine the full amount of recovery.

(Rossabi Aff. Ex. J, ECF No. 63.10.)

22. On 26 January 2018, Rossabi hand delivered the Contingency Agreement

to Scarfone at Plaintiff’s office. (Rossabi Aff. ¶ 51.) Scarfone represented to Rossabi

that Scarfone intended to sign the Contingency Agreement on behalf of Defendants.

(Rossabi Aff. ¶ 51.)

23. On 27 January 2018 or 28 January 2018, Scarfone represented to Rossabi

that Scarfone signed the Contingency Agreement and he would deliver the signed

Contingency Agreement to Rossabi. (Rossabi Aff. ¶ 53.)

24. Plaintiff, on behalf of Defendants, initiated settlement discussions with the

City. (See Rossabi Aff. ¶¶ 56–60.) At a 28 March 2018 mediation with the City,
Scarfone acknowledged the existence of the Contingency Agreement. (Rossabi Aff. ¶

60; see also Scarfone Aff. ¶ 26.)

25. Rossabi believed that the settlement agreement should include “a provision

to get the City to pay some of Defendants’ attorney’s fees.” (Rossabi Aff. ¶ 57.) It was

Rossabi’s belief that “there was simply no way the City would agree to pay all of

Defendants’ legal fees[.]” (Rossabi Aff. ¶ 58 (emphasis in original).) Rossabi also

believed that disclosing the existence of the Contingency Agreement to the City would

have a negative impact on settlement negotiations; therefore, Rossabi and Scarfone

agreed to not inform the City that the parties entered into the Contingency

Agreement. (Rossabi Aff. ¶¶ 58, 60.)

26. Defendants and the City reached a settlement worth approximately one

million dollars in the Cone Denim Action. (Rossabi Aff. ¶ 63.)

27. On 24 April 2018, Defendants and the City entered into a finalized

settlement agreement (the “Settlement Agreement”). (Scarfone Aff. Ex. 8

[“Settlement Agreement”].) Paragraph 19 of the Settlement Agreement provides

that:

The City agrees to pay attorney’s fees of N Club and GGEG in the total
amount of $85,000 (not including payments already made by the City
pursuant to the [PSA], dated October 24, 2017), payable to Rossabi Law
Partners within seven (7) business days of the full execution of this
[Settlement] Agreement, which execution shall take place by April 24,
2018. As to all other costs and attorney’s fees, the parties will bear their
own costs and attorney’s fees.

(Settlement Agreement ¶ 19.)
28. Plaintiff received $85,000 pursuant to the terms of the Settlement

Agreement. (Rossabi Aff. ¶ 64.) Plaintiff contends that it is entitled to $333,000

pursuant to the terms of the Contingency Agreement. (Rossabi Aff. ¶ 63.)

29. On the other hand, Defendants believe and contend that Plaintiff would be

paid in full for all of its legal work in the Cone Denim Action with Plaintiff receiving

$85,000 of the settlement proceeds, specifically identified by the Settlement

Agreement as payment for Defendants’ attorneys’ fees. (Scarfone Aff. ¶¶ 28–34.)

Scarfone represents that the City made two payments totaling $118,655 to Plaintiff,

on Defendants’ behalf, as payment of Plaintiff’s legal fees. (Scarfone Aff. ¶ 35.) It is

Defendants’ position that the total payments by the City of $118,655 represent

payment in full to Plaintiff for the hours Plaintiff worked on and billed for the Cone

Denim Action. (Scarfone Aff. ¶ 35.)

30. After Defendants and the City entered into the Settlement Agreement,

Scarfone informed Rossabi that Furr would not agree to pay Plaintiff pursuant to the

terms of the Contingency Agreement. (Rossabi Aff. ¶ 61.)

31. On 26 April 2018, Rossabi emailed Scarfone and indicated that Rossabi had

given Scarfone and Furr the Contingency Agreement; however, Rossabi had not yet

received it back signed by Scarfone. (Scarfone Aff. Ex. 10.)

32. Defendants contend that neither Scarfone nor Furr approved the

Contingency Agreement with Plaintiff. (Scarfone Aff. ¶ 36.) Scarfone contends that

execution of the Contingency Agreement would require the approval of both Scarfone

and Furr and that Scarfone alone could not have agreed to the Contingency
Agreement pursuant to the terms of GGEG’s Operating Agreement. (Scarfone Aff. ¶

36.)

33. Scarfone represents that he never signed the Contingency Agreement.

(Scarfone Aff. ¶ 45.) Furr also represents that he never signed the Contingency

Agreement. (Furr Aff. ¶ 30.)

III. PROCEDURAL BACKGROUND

34. The Court sets forth here only those portions of the procedural history

relevant to its determination of the Motion.

35. Plaintiff initiated this action with the filing of its Complaint on 5 December

2018.

36. On 8 March 2019, before this case was designated as a mandatory complex

business case and assigned to the undersigned, Defendants filed Defendants’ Motion

to Dismiss and Motion to Strike pursuant to Rule 12 (the “Motion to Dismiss”). (ECF

No. 6.) On 27 June 2019, Superior Court Judge David L. Hall (“Judge Hall”) entered

an order denying the Motion to Dismiss. (ECF No. 7.)

37. Defendants filed Defendants’ Answer to Complaint and Greater Greensboro

Entertainment Group, LLC’s Third-Party Complaint on 29 July 2019. (ECF No. 4.)

The Third-Party Complaint caused Rossabi to be joined as a third-party defendant.

38. On 30 July 2019, this matter was designated as a mandatory complex

business case, (ECF No. 1), and assigned to the undersigned, (ECF No. 2).

39. On 21 November 2019, Defendants filed Defendants’ Motion for Judgment

Upon the Pleadings pursuant to Rule 12(c). (ECF No. 32.) On 8 May 2020, the Court
entered the Order and Opinion on Defendants’ Motion for Judgment Upon the

Pleadings denying the Rule 12(c) motion. (ECF No. 53.)

40. On 21 August 2020, Defendants filed their Motion and Brief in Support of

Defendants’ Motion for Summary Judgment. (Br. Supp. Defs.’ Mot. Summ. J., ECF

No. 58 [“Br. Supp.”].) Plaintiff filed Plaintiff’s Brief in Opposition to Defendants’

Improper Motion for Summary Judgment on 23 October 2020. (Pl.’s Br. Opp. Defs.’

Improper Mot. Summ. J., ECF No. 64 [“Resp. Br.”].)

41. The Court held a hearing on the Motion on 9 December 2020. (See ECF No.

66.) The Motion is ripe for resolution.

IV. LEGAL STANDARD

42. Summary judgment is appropriate “if the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that any party is entitled

to a judgment as a matter of law.” N.C.G.S. § 1A-1, Rule 56(c). “A ‘genuine issue’ is

one that can be maintained by substantial evidence.” Dobson v. Harris, 352 N.C. 77,

83 (2000).

43. The moving party bears the burden of showing that there is no genuine

issue of material fact and that the movant is entitled to judgment as a matter of law.

Hensley v. Nat’l Freight Transp., Inc., 193 N.C. App. 561, 563 (2008). The movant

may make the required showing by proving that “an essential element of the opposing

party’s claim does not exist, cannot be proven at trial, or would be barred by an

affirmative defense, or by showing through discovery that the opposing party cannot
produce evidence to support an essential element of her claim.” Dobson, 352 N.C. at

83 (citations omitted).

44. “Once the party seeking summary judgment makes the required showing,

the burden shifts to the nonmoving party to produce a forecast of evidence

demonstrating specific facts, as opposed to allegations, showing that he can at least

establish a prima facie case at trial.” Gaunt v. Pittaway, 139 N.C. App. 778, 784−85

(2000). The Court must view the evidence in the light most favorable to the

nonmovant. Dobson, 352 N.C. at 83. However, the nonmovant “may not rest upon

the mere allegations or denials of its pleading, but its response, by affidavits or as

otherwise provided in this rule, must set forth specific facts showing that there is a

genuine issue for trial. If [the nonmovant] does not so respond, summary judgment,

if appropriate, shall be entered against [the nonmovant].” N.C.G.S. § 1A-1, Rule

56(e).

V. ANALYSIS

45. As an initial matter, the Court addresses Plaintiff’s argument that the

Court may not rule on the merits of the Motion as a reconsideration of Judge Hall’s

order on the Motion to Dismiss. Concluding that the Court may rule on the merits of

the Motion for the reasons stated herein, the Court will address Plaintiff’s claims for

breach of contract and quantum meruit in turn.
A. The Order on the Rule 12 Motion to Dismiss Does Not Foreclose the

Rule 56 Motion

46. Plaintiff argues that the Motion is improper because this Court is unable to

reconsider issues determined by Judge Hall’s ruling on the Motion to Dismiss. (Resp.

Br. 1–3.) Plaintiff contends that “Defendants have now–once again—sought

judgment on the exact same legal issues that have already been decided in this case.”

(Resp. Br. 3. (emphasis in original).)

47. “It is well established that, ordinarily, ‘no appeal lies from one Superior

Court judge to another; that one Superior Court judge may not correct another’s

errors of law; and that ordinarily one judge may not modify, overrule, or change the

judgment of another Superior Court judge previously made in the same action.’” Fox

v. Johnson, 243 N.C. App. 274, 282 (2015) (quoting Calloway v. Ford Motor Co., 281

N.C. 496, 501 (1972)). “The only exception occurs when three conditions are met: (1)

the subsequent order was rendered at a different stage of the proceeding, (2) the

materials considered by the second judge were not the same, and (3) the first motion

did not present the same question as that raised by the later motion.” Fox, 243 N.C.

App. at 282 (cleaned up).

48. Plaintiff’s argument fails for three reasons. First, the Motion occurs after

the completion of discovery, which is at a different stage of proceeding than the

Motion to Dismiss, which was filed at the beginning of this litigation. See Wake Cty.

v. Hotels.com, L.P., 235 N.C. App. 633, 650–51 (2014). Next, the Court now considers

different materials, including affidavits, email communications, and other
documents, than those that were before Judge Hall. See Durand v. Krispy Kreme

Doughnuts, Inc., 2011 N.C. App. LEXIS 1360, at *16–18 (2011) (concluding a second

trial court judge could rule on a Rule 56 motion after the initial trial court judge ruled

on a Rule 12 motion in part because the second judge reviewed evidence not available

to the first judge). Lastly, the Motion presents a different question than the questions

ruled on in Judge Hall’s order on the Motion to Dismiss. See Adkins v. Stanly Cty.

Bd. of Educ., 203 N.C. App. 642, 692 (2010) (“The trial court’s standards for a Rule

12(b)(6) motion to dismiss and a motion for summary judgment are different and

present separate legal questions.”).

B. The Breach of Contract Claim Survives Summary Judgment

49. Plaintiff’s breach of contract claim is based on Defendants alleged breach of

the Contingency Agreement for Defendants’ failure to pay Plaintiff for sums owed

pursuant to its terms. (Compl. ¶¶ 69–75.) Plaintiff contends that it is entitled to

recover 1/3 of one million dollars, the alleged value of the Settlement Agreement, less

the $85,000 already paid by the City to Plaintiff pursuant to the terms of the

Settlement Agreement. (Compl. ¶¶ 62–63.) Defendants, on the other hand, contend

that Plaintiff may not pursue a claim based on alleged breach of a contingent fee

agreement because the North Carolina Rules of Professional Conduct (the “RPC(s)”)

require there to be a written agreement signed by Defendants and none exists. (Br.

Supp. 9–11.)

50. “An essential element of claim for breach of contract is the existence of a

valid contract between two or more parties.” Kerry Bodenhamer Farms, LLC v.
Nature’s Pearl Corp., 2017 NCBC LEXIS 27, at *10 (N.C. Super. Ct. Mar. 27, 2017)

(internal quotation marks and citation omitted). RPC 1.5(c) provides that “[a]

contingent fee agreement shall be in writing signed by the client[.]” N.C.R. PROF’L

CONDUCT r. 1.5(c). Failure to comply with RPC 1.5 may render a contingent fee

agreement unenforceable. Dunn v. Dart, 2011 NCBC LEXIS 24, at *26–27 (N.C.

Super. Ct. July 14, 2011) (concluding that any agreement between the parties was

not enforceable absent compliance with RPC 1.5(e)); see also Law Offices of Juliano,

P.C. v. Jensen, 2015 U.S. Dist. LEXIS 190905, at *2–3 (M.D.N.C. 2015) (providing

that “it would be highly unlikely for the North Carolina courts to enforce” a contingent

fee agreement unrelated to the actual work performed and not in compliance with the

RPCs).

51. Defendants contend that it “is undisputed that there is no written

contingent fee agreement signed by either Defendant[;]” therefore, Defendants are

entitled to summary judgment on Plaintiff’s breach of contract claim. (Br. Supp. 10–

11.) However, Defendants’ position that it is “undisputed” that the Contingency

Agreement was not signed is erroneous.

52. Rossabi testified that Scarfone requested that Plaintiff represent

Defendants on a contingency fee basis. (Rossabi Aff. ¶ 39.) On 25 January 2018,

Rossabi, on behalf of Plaintiff, drafted the Contingency Agreement. (Rossabi Aff. Ex.

J; Rossabi Aff. ¶ 49.) Rossabi represents, by way of his sworn affidavit, that Scarfone

received the Contingency Agreement and that Scarfone represented to Rossabi on
several occasions that Scarfone signed the Contingency Agreement, thereby agreeing

to its terms on behalf of Defendants. (Rossabi Aff. ¶¶ 51, 53, 60.)

53. Defendants contend that Furr, as Vice President of GGEG, was required to

agree to the terms of the Contingency Agreement and he did not. (Reply Br. Supp.

Defs.’ Mot. Summ. J. 4, ECF No. 65 [“Reply”].) The Court interprets Defendants’

argument to be that even if Scarfone signed the Contingency Agreement, Defendants

would not be bound by its terms. (See Reply 4.) Despite Defendants’ position to the

contrary, Section 3.3 of GGEG’s Operating Agreement granted Scarfone the

authority, as the owner of a Majority in Interest of the Members, to execute the

Contingency Agreement without Furr’s approval. (See Operating Agreement § 3.3;

Rossabi Aff. ¶ 69.)

54. While Scarfone denies signing the Contingency Agreement, he does not

dispute the factual contention set forth in Rossabi’s affidavit that Scarfone

represented to Rossabi that Scarfone signed the Contingency Agreement. (See

Scarfone Aff. ¶¶ 45–56.)

55. Whether the Contingency Agreement was ultimately signed by Scarfone is

a genuine issue of material fact that the Court is unable to resolve without

considering the credibility of Rossabi and Scarfone, which is inappropriate at this

stage of the proceeding. See Anders v. Hyundai Motor Am. Corp., 104 N.C. App. 61,

67 (1991) (“On summary judgment the court does not weigh the credibility of the

evidence.”); see also Vernon, Vernon, Wooten, Brown & Andrews, P.A. v. Miller, 73

N.C. App. 295, 298–99 (1985) (reversing entry of summary judgment and concluding
that the parties’ conflicting affidavits raised issues of credibility sufficient to defeat

the plaintiff’s summary judgment motion).

56. Defendants contend that “Plaintiff’s entire claim for breach of a contingent

fee agreement rests upon Rossabi’s claim that Scarfone said he signed a contingent

fee agreement.” (Br. Supp. 10.) The Court does not dispute Defendants’ contention.

However, Rossabi’s sworn statement that Scarfone represented to him on numerous

occasions that Scarfone signed the Contingency Agreement, Scarfone’s failure to

dispute that he represented that he signed the Contingency Agreement, and the

submission of the draft Contingency Agreement is sufficient, albeit minimally

sufficient, to create a genuine issue of material fact sufficient for the breach of

contract claim to survive the Motion. While Plaintiff has not come forward at this

stage of the proceeding with a signed copy of the Contingency Agreement, that is not

a requirement at summary judgment, and it will ultimately be Plaintiff’s burden at

trial to establish the execution and validity of the Contingency Agreement. 3

57. Therefore, the Court DENIES the Motion to the extent it requests that the

Court grant Defendants summary judgment on Plaintiff’s breach of contract claim.

C. The Alternative Quantum Meruit Claim Survives Summary

Judgment

58. As an alternative claim of relief to Plaintiff’s breach of contract claim,

Plaintiff asserts a claim based on quantum meruit. (Compl. 11.) In sum, Plaintiff

3 Defendants, without citation to any applicable North Carolina law, contend that
“[c]ontingent fee agreements are subject to a statute of frauds.” (Br. Supp. 11.) However, the
Court does not find any support for Defendants’ position and declines to apply the statute of
frauds to the Contingency Agreement. See generally N.C.G.S. § 22-1 et seq.
contends that, even if a valid and enforceable contract did not exist between the

parties, Plaintiff is entitled to recover the reasonable value of the services rendered

by it to Defendants. (Compl. ¶¶ 78–85.) Defendants contend that the hourly fee

agreement between Plaintiff and Defendants, pursuant to which Plaintiff was paid

in full, precludes Plaintiff from bringing its quantum meruit claim. (Br. Supp. 13–

15.)

59. “Quantum meruit is a measure of recovery for the reasonable value of

services rendered in order to prevent unjust enrichment.” Paul L. Whitfield, P.A., v.

Gilchrist, 348 N.C. 39, 42 (1998). “To recover in quantum meruit, plaintiff must show:

(1) services were rendered to defendants; (2) the services were knowingly and

voluntarily accepted; and (3) the services were not given gratuitously.” Envtl.

Landscape Design Specialist v. Shields, 75 N.C. App. 304, 306 (1985).

60. As noted above, it is Defendants’ position that an hourly fee agreement

governs the payment of Plaintiff’s legal fees and the City paid Defendants’ legal fees

in full. (Br. Supp. 13–15.) The plain reading of the Settlement Agreement runs

contrary to Defendants’ position. The Settlement Agreement clearly limits the City’s

payment of Defendants’ attorney’s fees to $85,000 but in no way indicates that the

$85,000 represented all of Plaintiff’s legal fees. (Settlement Agreement ¶ 19.) The

Settlement Agreement leaves open the possibility that Plaintiff may be entitled to

more compensation for its legal services and expressly provides that “[a]s to all other
costs and attorney’s fees [exceeding the $85,000 payment], the parties will bear their

own costs and attorney’s fees.” (Settlement Agreement ¶ 19.)

61. Furthermore, as the Court has already concluded herein, it is unable to

resolve issues of material fact at this stage of the proceeding, including whether the

Contingency Agreement was signed or whether an hourly fee agreement governed

the parties’ relationship through resolution of the Cone Denim Action or expired on

19 December 2017. (See Rossabi Aff. ¶¶ 36, 41; Scarfone Aff. ¶¶ 12, 35, 45.)

62. Defendants also contend that North Carolina law does not permit Plaintiff

to recover in quantum meruit based on an “unsigned contingent fee letter[.]” (Br.

Supp. 15.) Contrary to Defendants’ position that an unsigned contingent fee

agreement precludes Plaintiff from proceeding with its quantum meruit claim, North

Carolina courts have held that while a contingency fee agreement may ultimately be

unenforceable, this fact alone does not bar a quantum meruit claim. Robertson v.

Steris Corp., 234 N.C. App. 525, 537 (2014) (“[T]he fact that an agreement for legal

representation was determined to be in violation of the Rules of Professional Conduct

and unenforceable is of no consequence where an attorney’s right of recovery arises

in quantum meruit, because the trial court’s award of fees is based upon the

reasonable value of the attorney’s services and not upon the failed agreement.”)

(cleaned up); In re Krispy Kreme Doughnuts, Inc., 2018 NCBC LEXIS 61, at *23–24

(N.C. Super. Ct. June 20, 2018) (“North Carolina appellate courts have held that an

underlying RPC 1.5(c) violation does not necessarily bar any and all recovery of
attorneys’ fees and expenses if there is a valid basis for recovery beyond the contract

between the attorney and client, such as quantum meruit.”).

63. Comment 12 to RPC 1.5 provides that this Court’s determination of the

merits of Plaintiff’s claims for its legal fees should be reached by “an application of

law to fact and not application of this Rule.” N.C.R. PROF’L CONDUCT r. 1.5(c) cmt.

12. As provided in Robertson, the North Carolina Supreme Court has made clear that

an attorney, absent a contract, is “entitled to recover the amount that is reasonable

and customary for work of like kind, performed under like conditions and

circumstances.” Robertson, 234 N.C. App. at 537 (quoting Forester v. Betts, 179 N.C.

681, 682 (1920)); see also Jamerson v. Logan, 228 N.C. 540, 544–45 (1948) (“Where

the plaintiff alleged a contract to pay for services performed, and upon the trial, failed

to prove a special contract, but did prove the performance of the services and their

value: Held, that he was entitled to recover upon quantum meruit[.]”) Accordingly,

should Plaintiff’s breach of contract claim fail at a trial on the merits, Plaintiff is

permitted to proceed on its alternative claim for quantum meruit consistent with

North Carolina law.

64. Therefore, the Court DENIES the Motion to the extent Defendants request

that the Court award summary judgment to Defendants on Plaintiff’s quantum

meruit claim.

VI. CONCLUSION

65. For the foregoing reasons, the Court hereby DENIES the Motion and

Plaintiff’s breach of contract claim and quantum meruit claim will proceed to trial.
66. The Court shall set this matter for trial by separate order after consultation

with counsel for the parties, consistent with the Guilford County Jury Trial

Resumption Plan as implemented in the North Carolina Business Court.

SO ORDERED, this the 5th day of May, 2021.

/s/ Michael L. Robinson
Michael L. Robinson
Special Superior Court Judge
for Complex Business Cases