Facts

Quinn, Emanuel, Urquhart & Sullivan, LLP, filed suit against Michael Berguin based on breach of written contract for the guaranty of its legal fees in a separate case. Quinn Emanuel's suit asked for $1.5 million in legal fees, $500,000 in interest, and an unspecified amount of its legal fees.

PLAINTIFF'S CONTENTIONS:
Quinn Emanuel contended that this case was a basic breach of written contract agreement. However, in prospective defense of the affirmative defense of release, Quinn Emanuel claimed that Berguin had not satisfied the oral terms of an agreement to release Berguin from the guaranty.

Quinn Emanuel claimed that in addition to paying it $441,980 and getting the clients to sign a new and more onerous engagement agreement, Berguin also had to provide a pretrial retainer of $250,000, 60 days before trial, and ensure that all of its bills were paid within 10 days of receipt.

Quinn Emanuel further claimed that, if it did release Berguin from his guaranty, the release was fraudulently induced. Quinn Emanuel adopted the position that Richard Schirtzer, head of Quinn Emanuel's complex litigation committee, whose clients include IBM, Charles Schwab, General Motors and Toyota, who boasted of a billion dollar settlement in one of his cases, who supervises the Quinn Emanuel accounting department, handles higher level banking issues, approves company bonuses, reviews company financial information before it is sent to the partners, who is comfortable reviewing complex financial statements for public companies, and has done financial litigation for 25 years, was duped by Berguin, a concrete contractor from Arizona, into believing that Berguin would remain responsible for their legal fees even after Schirtzer released him from his guaranty.

DEFENDANT'S CONTENTIONS:
Berguin contended that he was released from his guaranty after paying Quinn $441,980 and getting the client to sign the new engagement agreement. That agreement was documented in a letter from Schirtzer. The other two conditions were never discussed nor documented by Quinn nor was the position supported in the deposition testimony of the two Quinn attorneys, other than Schirtzer, who were alleged to have been present during the discussion to release Berguin. Those attorneys no longer work for Quinn.

Berguin also contended that Quinn Emanuel failed to comply with the statute of limitations by filing this action more than four years after a judge denied its Motion for Leave to Withdraw as Counsel for the client in the underlying litigation.

Settlement Discussions

Quinn Emanuel demanded $1.5 million, then $1 million, then $900,000, then $250,000 the week before trial, and settled for $0.00

Result

Defense.

Other Information

SETTLEMENT OFFICERS: Hon. Louis M. Meisinger; Hon. John P. Shook, retired. FILING DATE: Jan. 28, 2011.