Hoiles v. Alioto

Timothy Hoiles (plaintiff), a Colorado resident, traveled to California to hire Joseph Alioto (defendant), an attorney licensed in California. Hoiles wanted to sell his stock in a family-owned media company, and he needed Alioto’s help. Hoiles and Alioto expected that Alioto might have to file a lawsuit against the company’s shareholders to force the purchase of Hoiles’s stock. Hoiles and Alioto negotiated a contingent-fee agreement during their California meeting, and Hoiles executed the agreement when he was back in Colorado. The agreement called for Alioto to be paid certain percentages of any recovery by Hoiles or, in some specified circumstances, at an hourly rate. The agreement did not contain a choice-of-law provision. Alioto proceeded to perform his legal services in California, including determining legal strategy, drafting pleadings, and preparing for a suit in California state court. Subsequently, the media company was recapitalized, which allowed Hoiles to exchange his shares for cash. Hoiles believed that Alioto was not entitled to a contingent fee based on the transaction sales price. After various procedural machinations, Hoiles asserted claims against Alioto in Colorado district court, and Alioto counterclaimed for breach of the fee agreement. The district court dismissed Alioto’s breach-of-contract claim based on finding that the fee agreement did not comply with Colorado law governing contingent-fee agreements. Alioto appealed, arguing the court erred in not applying California law.