Background
Veritext, a court-reporting services company, sued Newman Law Group, a Dayton law firm, for unpaid invoices totaling approximately $50,748.73 for court-reporting services provided between March 2020 and January 2022. Newman raised multiple defenses, including that its former clients had agreed to pay the court-reporting fees directly, and filed counterclaims alleging violations of the Fair Debt Collection Practices Act and Consumer Sales Practices Act.
Cross-motions for summary judgment were filed. The trial court granted partial summary judgment to Veritext on its claim for money due on account, denied Newman’s motion, and awarded Veritext $50,748.73 in damages after a bench trial. Newman appealed, raising four assignments of error.
The Court’s Holding
The Second District affirmed the trial court’s judgment on all four assignments of error. The court rejected Newman’s argument that its former clients were the primary obligors for the court-reporting fees, finding that Veritext’s agreement was solely with Newman, not with Newman’s clients. Even though some clients voluntarily paid Veritext directly, this did not establish a contractual relationship between Veritext and those clients.
On the mitigation of damages defense, the court found it unreasonable to require Veritext to pursue collection from Newman’s clients, who were third parties with no legal obligation to Veritext. The court held that Veritext was entitled to focus its collection efforts on the directly responsible party, Newman.
Key Takeaways
- A law firm that engages a court-reporting service remains liable for payment even if the firm’s clients agreed separately to cover those costs.
- A plaintiff is not required to mitigate damages by pursuing collection from third parties who have no legal obligation to pay.
- Voluntary payments by third parties do not establish a contractual relationship or shift the primary obligation from the contracting party.
Why It Matters
This case is a cautionary tale for law firms regarding vendor relationships. Ohio practitioners should be aware that when they engage court reporters, process servers, or other litigation vendors, the firm remains primarily liable for payment regardless of any separate arrangement with clients. Firms seeking to shift payment responsibility should formalize those arrangements with clear written agreements between the vendor and the client.