Contract — Bench Trial – Sufficient Findings – Attorneys – Paralegal – Unauthorized Practice of Law – Unclean Hands Defense

The defendant-law firm contended that it was not required to pay plaintiff—a disbarred attorney acting as a paralegal—under the parties’ contract because plaintiff breached that contract by engaging in the unauthorized practice of law. Despite the firm’s claim that the trial court failed to make sufficient findings after a bench trial, the trial court made several findings on this issue, including its finding that “Plaintiff did not breach said contract.”

We affirm judgment for plaintiff but deny plaintiff’s motion for sanctions.

Background

After plaintiff was disbarred, he worked as a contract paralegal for the defendant-law firm. The firm represented plaintiff’s friend, Elise Siharath in a civil suit. After three years of litigation, the case was settled for a substantial sum.

A dispute arose over the payment of attorney fees. Unbeknownst to the firm, plaintiff had directly billed Siharath $55,285.50 for his services because she was concerned about the amount billed by the firm.

Siharath retained independent counsel, who filed grievances with the State Bar.  The State Bar censured the firm’s principal, concluding that he had aided plaintiff in the unauthorized practice of law. The State Bar also sent plaintiff a letter of caution, finding probable cause that his activities violated the unauthorized practice of law statutes.

After learning about the grievances, the firm refused to pay plaintiff under the parties’ contract. Plaintiff filed this breach of contract action, and the firm raised the defense of unclean hands. The trial court awarded plaintiff damages of $15,878.

Findings of Fact

The firm argues that the trial court violated N.C. R. Civ. P. 52(a)(1) by failing to make sufficient findings of fact as to the defense of unclean hands based on three of the firm’s allegations: (1) plaintiff engaged in an adulterous affair with Siharath without informing the firm; (2) plaintiff engaged in the unauthorized practice of law and therefore failed to abide by the terms of the parties’ contract; and (3) the trial court failed to apportion plaintiff’s billing between legitimate paralegal services and billing for services which constituted the unauthorized practice of law.

First, the trial court found that plaintiff and Siharath had never engaged in a romantic relationship.

Second, the trial court made findings regarding the State Bar’s rulings, including that “the letter of caution has no legal implication and no formal criminal charges were filed against plaintiff,” and that “Plaintiff did not breach [the parties’] contract.”

Third, the trial court found that the firm did not contest plaintiff’s timesheets. So the trial court was not required to, sua sponte, delineate between paralegal services rendered and billings that constitute the unauthorized practice of law.

As a final matter, we deny plaintiff’s motion for sanctions under N.C. R. App. P. 34(a)(1) because the firm put forth a good faith argument that plaintiff’s unclean hands precluded his claim for monetary damages.

Affirmed.

Rodgers v. Law Office of Kenneth T. Davies, P.C. (Lawyers Weekly No. 012-230-12, 12 pp.) (April Wood, J.) Appealed from Mecklenburg County Superior Court (Donald Cureton, J.) Neal Rodgers, pro se; Kenneth Davies for defendant. 2021-NCCOA-374