ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, December 23, 2004

Cases—Legal fees—Contract with corporation doesn’t obligate principals

California_flag_1 A lawyer who made the mistake of having an attorney fee agreement with a closely held corporation instead of the principals found himself out of luck, in a recent unpublished decision by the California Court of Appeals.

Lawyer Craig Scott got the appropriate fee agreement in writing from his client, California Employer Services, Inc., but the agreement did not extend to any of CES’s principals.  After Scott failed to collect some $48,000 in legal fees, he sued.

Too bad, said the court. The contract was with the corporation, not with any of the individuals.  Scott would nevertheless would have have had a claim for quantum meruit against the individuals if his work had benefited them—but he missed the two-year statute of limitations.  Scott argued that since he had a written contract, the four-year statute should apply, but the court held that since the written contract was not with the principals, the two year limit was appropriate.  Scott v. Assured Personnel Servs., 2004 Cal. App. Unpub. LEXIS 11048 (Fourth Dist. Dec. 7, 2004).

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