A recent Law 360 story by Madeline Lyskawa, “Atty Trashed Time Records, Spa Says in $1.15 Fee Fight,” reports that an Atlanta-based airport travel spa operator urged a Georgia appellate court to unravel an attorney's $1.15 million jury award covering nearly 2,000 hours of work he said he performed without pay, arguing that he intentionally destroyed his time records and that the award is excessive. Cordial Endeavor Concessions of Atlanta Inc., which operates an airport travel spa in Hartsfield-Jackson Atlanta International Airport, maintained in a brief that the Georgia Court of Appeals should reverse a Georgia State-wide Business Court's judgment confirming a jury's $1.15 million verdict and send the case back for a new trial, saying the jury should have awarded damages at the lower range of a reasonable fee because the spa hadn't signed a fee agreement with attorney Carl Gebo and his law firm, Gebo Law, before the work was complete.
"A lawyer who fails to secure an engagement agreement, fails to communicate his hourly rate to the client, and then discards his contemporaneous time records when fee litigation is likely does not get to recover unpaid fees at the upper range of what might be considered a reasonable hourly rate," the spa operator said. The jury verdict challenged by Cordial Endeavor on appeal was rendered in mid-December, following a five-day trial that took place in Cobb County before Georgia State-wide Business Court Judge William "Bill" Grady Hamrick III. After deliberations, the jury ordered Cordial Endeavor to pay Gebo $1.15 million in quantum meruit damages for nearly 2,000 hours of work he said he performed without pay between April 2015 to May 2020.
But, according to Cordial Endeavor, the jury's verdict represents an hourly rate of roughly $630 for the 1,829 hours of unpaid legal services Gebo says he provided, which the company said represents the "uppermost range of a reasonable fee." Moreover, it is unrepresentative of the rate Gebo said he would charge and said was reasonable in his complaint, Cordial Endeavor said.
Instead, Gebo began representing Cordial Endeavor at a rate of $300 per hour, and then failed to inform the company of his rate increase to $425 per hour once he began representing the company in New York state trial court, Cordial Endeavor said. Additionally, in his complaint, Gebo alleged that a $425 per hour rate reflected a reasonable value for his services, the company said. Even so, at trial, Gebo's expert called for a $600 per hour rate, which the company said is higher than it would have been prepared to pay had Gebo "properly communicated" his fees to Cordial Endeavor.
As for Gebo's alleged destruction of scrap notes and time records detailing his work for the company, Cordial Endeavor accused the business court of improperly denying its motion for sanctions against Gebo, arguing that Gebo should have been required to keep his time records in order to prove the amount he was entitled to, especially given that he failed to secure an engagement agreement with the company. As a result, the jury should have been given a spoliation instruction, Cordial Endeavor said, without which it was seriously prejudiced. Furthermore, Cordial Endeavor also accused the business court of having faltered by excluding evidence of Gebo's alleged indifference to rules of professional conduct requiring him to secure a written fee agreement with clients.
"Without evidence of Gebo's disregard for Rule 1.5(b), the jury did not understand that Gebo disregarded an important rule of professional responsibility and thus did not understand Gebo should be awarded recovery at the lower range of what otherwise would be a reasonable negotiated fee," Cordial Endeavor said.