Who's Responsible for the Bill?

By Pete Wacht, CAE

For obvious reasons, getting paid is an issue close to the heart of most reporters. And, in fact, it continues to appear in the JCR as new rules or favorable case law emerges to support the argument that the attorney can be held liable for the reporter's fees.

To gain a better perspective on where things stand, JCR asked the affiliated state associations the following question: Does your state have any laws, court rules or case law on who bears responsibility for paying the court reporter's fees? The sidebar shows how each state replied. Keep in mind this article is based on the responses we received in the survey. We did not check each state's regulations. If you believe our information is incorrect, please let us know.

Thirty-four states have rules, regulations or case law on charging reasonable fees for the transcript. Much of the time, state rules or regulations follow the Federal Rules of Civil Procedure. Rule 30 (f )(2) reads in part "Upon payment of reasonable charges therefor, the officer shall furnish a copy of the transcript or other recording of the deposition to any party or to the deponent." But it doesn't say specifically who is responsible for payment.

Generally, on the state level, the noticing party is responsible, with no mention of the attorney. For example, California CCP 2025(p) states, "The party noticing the deposition shall bear the cost of that transcription, unless the court, on motion and for good cause shown, orders that the cost be borne or shared by another party."

However, Michigan, New Jersey and New Mexico report that the attorney is clearly responsible for reporters' fees, and in Illinois, under the state's CSR Act, attorneys are held responsible for the payment of services. The strongest voice on this issue comes from Texas. Section 52.059 of the state's Government Code holds the attorneys liable for reporter fees:

          (a) Except as provided by Subsection (c), an attorney who takes a deposition and the attorney's firm are jointly and severally liable for a shorthand reporter's charges for:
          (1) the shorthand reporting of the deposition;
          (2) transcribing the deposition; and
          (3) each copy of the deposition transcript requested by the attorney.
          (b) Except as provided by Subsection (c), an attorney who appears at a deposition and the attorney's firm are jointly and severally liable for a shorthand reporter's charges for each copy of the deposition transcript requested by the attorney.
          (c) Prior to the taking of any deposition, a determination of the person who will pay for the deposition costs will be made on the record, if an attorney is unwilling to be bound by the provisions of Subsection (a) or (b).

Greater support for the argument that attorneys, and not their clients, should be held responsible for the transcript bill comes from case law. As Tim Averill noted in "Legal and Ethical Issues Affecting Reporters" in the July 1996 JCR, the case law in this area focuses on the agency-principal relationship. Traditionally, courts have held that the attorney is an agent and is not personally liable for contracts made on behalf of a principal unless there is an express agreement to the contrary. However, in recent years, courts have been following a modified view of this maxim. If the attorney does not disclaim responsibility, he or she is viewed as the principal because the attorney controls the litigation.

Citing from an "Attorney's Personal Liability for Expenses Incurred in Relation to Services for a Client," 66 ALR 4th 256, 262 (1988), Averill writes, "[J]urisdictions consider 'the agency relationship between the attorney and client to be a modified one, since the attorney has full control of the litigation.' In these jurisdictions, 'courts have ruled that an attorney ordering goods or services in connection with litigation is ordinarily to be treated as a principal, even where he or she is known to be an attorney acting for a particular client, in the absence of an express disclaimer of such responsibility.' Pursuant to this second agency theory, an attorney would be liable for unpaid transcript fees unless the attorney expressly disclaimed responsibility."

In addition to the primary argument of a modified agency theory, custom and usage have also been mentioned in various court rulings that favor reporters. Following below are excerpts from several well-known rulings or opinions that reporters have used to support their claims that attorneys should be held responsible for the bill. Some of these have appeared in previous editions of the JCR, but their relevance offers a strong precedent for the future. Case law citations are included where available.

Williams v. North Alabama Court Reporting Service, No. 2991382, 2001 Ala. Civ. App. LEXIS 579. In this most recent decision, the Alabama Court of Civil Appeals affirmed a jury verdict in favor of the court reporting firm, stating that the attorney, and not the client, was responsible for the reporter's fees. The attorney argued that he acted as a simple agent for a disclosed principal, citing Petrando v. Barry, 4 Ill. App. 2d 319, 124 N.E.2d 85 (1955), for the proposition that he should not be held liable on a contract that he made "for his client," where he made no express pledge of personal responsibility. Upon review of the authorities in this area, the court determined that Petrando did not represent the unanimous view of modern American law on this point. The court noted that the "attorney as simple agent" approach of Petrando has undergone considerable criticism, pointing to the Supreme Judicial Court of Massachusetts's ruling in Burt v. Gahan. Burt acknowledged Petrando as representing "a contrary view of the question," but deemed it to be "less persuasive," noting that "there is no hardship in the rule we adopt, as it would be a simple matter for the attorney to exclude himself from liability by a statement to that effect." Further, the court believed that the approach outlined in these authorities comports with long-standing Alabama law regarding the relationship between attorneys and their clients:

    The power of an attorney is not co-equal, co-extensive, or the equivalent of that of the client. He is, as has been said in numerous decisions of this court, a special agent, limited in duty and authority to the vigilant prosecution or defense of the rights of the client. He can enter into no bargains or contracts, though he may make agreements in writing touching the course of proceedings in pending suits, or the issue or return of executions on judgments he may have obtained, which will bind the client, unless he has specially authorized, or subsequently ratified them.

The court concluded that there is no evidence that the client specifically authorized or ratified the attorney's conduct in requesting a transcript, while there was evidence from which the jury could have concluded that the attorney, before or at the time he indicated to the court reporting service that he wanted the transcript, did not advise the court-reporting service that it was not to look to him for payment. Accordingly, the appeals court concluded that the trial court properly denied the attorney's motions before, during, and after trial directed to this issue.

Jones v. Boesch. In this 1999 decision, the Indiana Court of Appeals upheld the trial court's decision to hold attorneys responsible for the payment of court reporter fees when ordering deposition services. The attorney had argued that as an agent for his client, he is not personally liable on the contracts made on behalf of the client. The Court of Appeals rejected the attorney's argument:

    Essentially, an attorney is more than a mere agent of the client, he is the sole manager of the business committed to his care. ... Courts in other jurisdictions have considered the agency relationship of the attorney and client a modified one, treating the attorney as a principal because his education, experience and professionalism render him in charge of the litigation. In those jurisdictions, the attorney ordering goods or services for the client will also be personally liable for those expenses, in the absence of an express disclaimer of such responsibility. Thus, under this line of reasoning, the burden is on the attorney to expressly disclaim responsibility rather than upon the service provider to obtain the attorney's personal promise to pay. ... The trial court followed the view that the attorney should be responsible to a service provider in the absence of a disclaimer, and held Boesch liable for the costs of Jones' court reporting. Further, the court found Boesch to be "more than a mere agent, rather in accordance with his professional duties he is indeed the strategist and is thus empowered to perform the minutiae details of litigation." We agree. We think it only fair that an attorney with superior legal knowledge who actively seeks another's services in connection with litigation bear the burden of clarifying his intent regarding payment.

Judd & Detweiler v. Gittings, 43 App. DC 304 (1915). Several courts have cited this decision when ruling because of its reliance on the modified agency theory. This 1915 case, heard by the Court of Appeals for the District of Columbia, states in pertinent part:

    While it is true that an attorney is the agent of his client, the relation between them, we think, is such that it calls for some modification of the general rule which the law recognizes as existing between principal and agent. ... The attorney has complete charge of the litigation, is so recognized by the court, and, as such, dominates in all matters pertaining to the conduct of the litigation. ... "In most cases of agency the principal is what the name imports - the leading person in the transaction. The agent is, as the term implies, a mere subordinate, important only as the representative of the principal; often representing only one principal. An attorney at law, on the other hand, occupies a position of recognized importance in itself, not infrequently of great prominence before the public, in which he often has a large number of clients, his relations to whom are full of detail, and who are little noticed by the public." Heath v. Bates, 49 Conn. 342, 44 Am. Rep. 234. The attorney usually determines what steps are to be taken in his client's interest, and the acts of the attorney in the conduct of litigation are binding upon the client. We therefore deem the just and equitable rule of law thus established to be that, in the absence of express notice to the contrary, court officials and persons connected, either directly or indirectly, with the progress of the litigation, may safely regard themselves as dealing with the attorney, instead of with the client.

Theuerkauf v. Sutton, 102 Wis. 2d 176 (1981). Though this case concentrates on services provided by expert witnesses, it does offer some relevance for reporters. "The case of Theuerkauf v. Sutton stands for the proposition an attorney who hires someone for a service in furtherance of litigation is responsible for the fees of the person hired," explains Ed Johnson, RPR, CRR, from Port Washington, Wis. "Although not directly on point, certainly the inference can be drawn a court reporter's fees are the responsibility of the attorney, rather than forcing the reporter to seek payment from the client. I have Shepardized the case, and it has been cited favorably several times and not been overturned."

When making its ruling, the Wisconsin Supreme Court cited the 1911 decision in Wojahn v. National Union Bank, 144 Wis. 646, 129 N.W. 1068, noting that "The general rule is that if a person performs valuable services for another at the other's request, the law implies, as matter of fact, the making of a promise by the latter and acceptance thereof by the former to pay the one performing the service the reasonable value thereof." The court also noted, "With the custom in this state that in the absence of notice to the contrary, experts who perform services in aid of litigation look to the attorneys for payment and rely solely on the attorneys' credit rather than the particular client's. ..." The court ruled:

    We find the rationale underlying the disclaimer rule expressed in Judd & Detweiler, supra, compelling and accordingly, we hold that when an attorney engages experts such as but not limited to accountants, economists, engineers, architects, and doctors, etc., to perform services in aid of the conduct of litigation for a named client, the law will consider the attorney as principal and will imply a promise on the part of the attorney to pay the reasonable cost and expenses of the expert in the absence of an express disclaimer of liability.

Urban Court Reporting Inc. v. Davis, 551 N.Y.S. 2d 253, 158 A.D.2d 401 (1990). Mary Beth Wheeler first mentioned this case in her 1992 JCR article "Is the Attorney Responsible for Your Bill?" The District Court initially followed the standard reading of the agency-principal relationship, but because there was no clear disclaimer by the attorney, the Court of Appeal ruled:

    It seems to us to be more equitable to hold the attorney liable in the absence of his express indication to the contrary, since the attorney may avoid liability by the simple expedient of indicating to the reporting service or other provider of services that the client and not the attorney is liable for the obligations incurred. This view takes into account modern litigation practices, under which the attorney orchestrates and manages the litigation and the reporting service looks to the attorney for direction as well as payment.

Copp v. Breskin, 56 Wash. App. 229, 782 P.2d 1104 (1989). Wheeler also mentioned Copp v. Breskin, which is similar to Theuerkauf v. Sutton in that it deals with fees owed to experts, yet it also touches on the additional issue of custom and usage. The Washington Court of Appeals stated:

    When a litigation service provider contracts with an attorney based on the attorney's credit, and the attorney is aware, or should be aware of this, it should not matter that the client's identity is known. The service provider reasonably expects that the attorney will be responsible as surety or guarantor of the client's performance ... and any contrary expectation of the attorney is unreasonable, if not fraudulent. ... Custom is determinative of the parties' intent where both parties are aware of it and neither knows or should know that the other party has an intention contrary to it.

McCullough v. Johnson, 816 S.W.2d 886 (Ark. 1991). Tim Averill first covered this ruling in the July 1996 JCR, as the Arkansas Supreme Court affirmed a trial court judgment based on the modified agency line of reasoning. The Supreme Court explained, "The trial court followed the view that the attorney should be responsible to a service provider in the absence of a disclaimer. ... This approach allows court reporters to confidently regard themselves as dealing with the attorney, not the client, and the attorney may avoid liability by informing the provider that the client, not the attorney, is responsible for any obligations incurred."

Cahn v. Fisher, 805 P.2d 1040 (Ariz. App. 1990). Averill also discussed Cahn v. Fisher. The trial court granted a summary judgment for the reporters, who bolstered their case by offering an affidavit from a disinterested court reporter as to the custom and usage of court reporters to bill and extend credit to attorneys, not their clients. The appellate court affirmed the trial court's decision:

    In this case, the court reporters attempted to show that "custom and usage" between court reporters and lawyers is that the lawyers are directly liable for the reporters' fees. Court reporters might also be able to establish such liability by proof of a course of dealing between the parties. ...

    There is no doubt that a contract was entered into between the lawyers and the reporters. The only question is the identity of the persons whom the parties intended to be the payor. ... The dispositive point is that the evidence of custom and usage was admissible to prove the identity of the persons making the promise to pay.

The evidence of custom and usage was uncontroverted. It showed that the parties' understanding was that the lawyers would be responsible for paying the reporters. This evidence fully sustains the superior court's entry of summary judgment against the lawyers.

Molezzo Reporters v. Patt, 579 P.2d 1243 (1978). This case last appeared in the March 1993 JCR. Initially, the District Court ruled according to the standard interpretation of agency. However, the reporters appealed, contending that attorneys who do not disclaim liability are responsible for payment. The issue of whether an attorney can bear the costs of litigation also came up. In its reversal, the Nevada Supreme Court stated:

    The attorney decides whether the services of a certified reporter are needed for depositions or for court transcription of testimony. Because of his control of the litigation process, he should be treated as a principal, severally and jointly liable with his client for reporting services rendered. As noted in Burt v. Gahan, supra, there is no hardship in this rule, as it is a simple matter for the attorney to exclude himself from liability by a timely statement to that effect.

Supreme Court Rule 183 reads in part: "A lawyer may not properly agree with a client that the lawyer shall pay or bear the expenses of litigation; he may temporarily and in good faith advance expenses as a matter of convenience, but subject to reimbursement."

The rule specifically allows the attorney to advance expenses. The only restriction is that the client remain liable to the attorney for reimbursement. Such reimbursement is to be accommodated within the attorney-client relationship, and does not touch the right of the reporter to collect for his services from the attorney who ordered them without disclaiming liability therefor.

Philip H. Burt, et al. v. James Gahan Jr., 220 NE 2d 817 (Mass. 1966), 15 ALR 3d 527. In this instance, which first appeared in the December 1984 JCR, the Massachusetts Supreme Judicial Court ruled on the agency argument, again focusing on the control of the litigation:

    The relationship of attorney and client is paramount, and is subject to established professional standards. In short, the attorney, and not his client, is in charge of litigation, and is so recognized by the court. As was said in Judd & Detweiler Inc. v. Gittings, 43 App DC 304, 310-311, which concerned the printing of briefs on appeal: "The attorney usually determines what steps are to be taken in his client's interest, and the acts of the attorney in the conduct of litigation are binding upon the client. We therefore deem the just and equitable rule of law thus established to be that, in the absence of express notice to the contrary, court officials and persons connected, either directly or indirectly, with the progress of the litigation may safely regard themselves as dealing with the attorney, instead of with the client."

Rudolph Browd v. Fierman Reporting Service Inc., 3 Fla. Supp. 2d 124. This reference also appeared in the December 1984 JCR, in which the reporting firm sued the attorney for payment for transcript and exhibit copies. The 11th Judicial Circuit of Florida, Appellate Division, ruled on the agency and custom and usage arguments, affirming the decision of the trial court:

    [I]n Bakst v. Stephens, 21 Fla. Supp. 47 (Fla., 11th Cir. Ct. 1963), the Court, sitting in its appellate capacity, held "... when an attorney orders transcripts from a court reporter, whether he engaged the reporter initially or not, the attorney is liable to the reporter for the transcripts unless he makes it expressly known that he is ordering the transcripts as agent for his client." ...

    The minority rule followed in other jurisdictions is that an attorney dealing with a third party is to be treated as a principal and held personally liable for expenses incurred in the client's behalf unless the attorney makes it expressly known that he is not ordering such services on his own credit.

    We adopt [this] rule as the Rule to be applied in this case for the following reasons. The Court recognizes that in Dade County, court reporters are customarily engaged by the attorney and that the reporter looks to the attorney for payment of their services. ...

    In the instant case, Browd engaged the services of the court reporter when he requested copies of the deposition transcripts and exhibits. The materials were then delivered to the attorney ordering them and he was billed.

    It is doubtful whether court reporters would advance their services if they had to look to clients for payment. As was recognized in Roberts, Walsh and Co. v. Trugman, 109 NJ Super 594, 264 A 2d 237 (1970), which held the attorney primarily liable to a court reporter for the cost of depositions, credit is extended to the attorney, not the client. If the client is known to the court reporter prior to taking the deposition, it is at most only as a name. The attorney, as a member of the bar, is prima facie worthy of credit.

    To resolve this issue under strict agency principles would not take into consideration the special nature of the attorney-client relationship. It is the attorney who is responsible for handling depositions and who deals with the court reporter. It is for this reason that the attorney-client relationship is felt to call for some modification of the general rule regarding principal and agency. Judd & Detweiler v. Gittings, 43 App DC 304 (1915). ...

    The relationship which we seek to recognize in our opinion stated herein is the exact relationship in this community between attorneys and court reporters. The rule adopted by this Court will avoid disruption of established business practice without the imposition of any undue hardship. It is but a simple matter for the attorney to exclude himself from liability by making a statement to that effect.Burt v. Gahan, 351 Mass. 340, 220 NE 2d 817 (Mass. 1966).

Roberts, Walsh v. Trugman, 109 NJ Super 594, 264 A 2d 237 (1970). In this case, the attorney argued that he was simply acting as the agent for his client, the disclosed principal, and thus wasn't liable for the bill. The court disagreed:

    Here I cannot avoid concluding that the credit was extended to the attorney, not the client. Mrs. Loeb, if known to plaintiff prior to the taking of the deposition, was at most only a name; Trugman was a member of the bar and therefore prima facie worthy of credit. Plaintiff came at his request, not his client's. Trugman did not tell plaintiff to bill the client, and it was Trugman who was billed. In fact, plaintiff testified that he would not deal with nonlawyers. Plaintiff's position is reinforced by his uncontradicted testimony that it is the practice and custom in court reporter-attorney dealings that the attorney, not the client, be responsible for payment for depositions.

Dennis Jr. v. Florida Court Reporting. In this appeal, heard in Florida's Circuit Court of the 15th Judicial District, the court found for the reporting agency, citing Browd v. Fierman Reporting Service. In addition to accepting the argument that it was customary in the industry for the reporter to charge the attorney for services unless the attorney notified the reporter that the client was responsible, the court noted:

    An attorney is always representing a client. However, a private attorney is also a businessman. Consequently, an attorney often incurs charges in the operation of his business. Merely because a specific client for whom the attorney is then working can be identified, the attorney is not converted from a principal representing himself in the operation of his business to an agent for his client. The attorney is the client's agent in his legal representation of his client. He acts for himself in ancillary contracts made on his own behalf, outside the scope of the direct attorney-client relationship, which nonetheless enable him to run his business and represent his clients. In those dealings, he is a principal acting on his own account.

About the Author

Pete Wacht, CAE, is NCRA's Senior Director, Communications and Public Affairs.