Alderman v. Hamilton

• Decision Date: 08 November 1988
• Court: California Court of Appeals Court of Appeals
• Parties: Robert E. ALDERMAN, Jr., Plaintiff, Cross-Defendant, and Appellant, v. Riley and Gladys HAMILTON, Defendants, Cross-Complainants, and Appellants. Civ. B022203.

Page 845

252 Cal.Rptr. 845

205 Cal.App.3d 1033

Robert E. ALDERMAN, Jr., Plaintiff, Cross-Defendant, and Appellant, v. Riley and Gladys HAMILTON, Defendants, Cross-Complainants, and Appellants.

Civ. B022203.

Court of Appeal, Second District, Division 5, California.

Nov. 8, 1988.

Certified for Partial Publication ^*

Tony L. Cogliandro, Torrance, for plaintiff, cross-defendant and appellant

Sheila Donahue Miller, San Pedro, for defendants, cross-complainants, and appellants.

ASHBY, Associate Justice.

Appellant, Robert E. Alderman (Alderman), attorney at law, filed suit against appellants Riley Hamilton and Gladys Hamilton (the Hamiltons) alleging the Hamiltons breached an attorney fee agreement. The Hamiltons acknowledged owing Alderman monies for services performed with regard to a will contest but denied owing additional sums. The trial court's decision was consistent with the Hamiltons' position. We affirm.

STATEMENT OF CASE

Alderman filed a civil suit against the Hamiltons alleging that the Hamiltons breached an attorney fee agreement when the Hamiltons refused to pay a contingency fee purportedly owed to Alderman. Alderman maintained he was hired to protect the Hamiltons' interests under the will of Leone L. Hunter in an anticipated will contest and also to perform services regarding ownership rights in property the Hamiltons held in joint tenancy with Hunter. Asserting numerous defenses, the Hamiltons claimed the fee agreement was unenforceable and denied owing the sums claimed by Alderman. The Hamiltons filed a cross-complaint alleging intentional infliction of emotional distress and abuse of process. The Hamiltons acknowledged Alderman performed services in resolving the will contest and thus he would be entitled to a contingency fee based on the value of the assets they expected to receive from Hunter's estate. However, the Hamiltons denied owing Alderman any moneys from the sale of the joint tenancy property.

After a court trial, the following judgment was entered: "[T]hat [Alderman] takes nothing under his complaint except that upon the distribution of assets to [the Hamiltons] from the Estate of Leone L. Hunter, [the Hamiltons] shall pay to [Alderman] the sum of ... $11,361.20." It was also adjudged that the Hamiltons were the prevailing parties and thus entitled to reasonable attorney fees and costs. The Hamiltons were to take nothing under their cross-complaint.

Both parties appeal from the judgment. We affirm.

In the unpublished portions of this opinion we discuss the Hamiltons' tort claims and the prevailing party issue.

FACTS

The Hamiltons, ages 79 and 83 at the time of the incidents involved herein, were the principal and residuary beneficiaries under the will of Leone L. Hunter. Roger Moore, Hunter's cousin, and Hunter's conservator prior to her death, was contesting the will. Prior to Hunter's death, Attorney Roger Minor had prepared Hunter's will and also had prepared a deed of trust which transferred Hunter's home to the Hamiltons and to Hunter in joint tenancy.

Not being a litigator, assuming he was a potential witness in the will contest, and expecting to receive a 10 percent referral fee, Attorney Minor referred the Hamiltons to Alderman to handle the will contest.

Attorney Minor was present when Alderman first consulted with the Hamiltons on September 14, 1984. At this meeting, the parties discussed the will contest in which they anticipated Moore to allege Hunter lacked the mental capacity to properly execute the will and to allege undue influence because Attorney Minor prepared the document at the Hamiltons' direction having not met Hunter prior to its execution. The parties were also aware of the potential that Moore would take legal action to set aside the joint tenancy deed, but knew such action probably could be prevented.

It was agreed that Alderman would handle the will contest and Attorney Minor would deal with the joint tenancy property. During the initial meeting, the parties discussed Alderman's fee for services. The fee agreement, executed at that time, described the services to be performed by Alderman as "possible defense of will contest by distant relatives and/or challenge to joint tenancy deed." In Alderman's handwriting, below the parties' signatures, the agreement showed that Alderman was to receive 75 percent of his standard $140 hourly rate plus 25 percent of any settlement or judgment, to a maximum fee of 40 percent of the funds received.

With the assistance of Attorney Minor, the Hamiltons filed a Notice of Death of Joint Tenant with regard to the joint tenancy property. On November 1, 1984, the property was sold for the net sum of $110,000. The sale was a straightforward transaction without complications. The only work Alderman did with regard to this transaction was a brief discussion with the Hamiltons' real estate broker prior to sale and a review of title and escrow documents, expending three-fourths of an hour.

On March 1, 1985, Alderman resolved the will contest through settlement. Five days later, Alderman submitted a bill to the Hamiltons requesting payment in the sum of $27,750, representing 25 percent of the net proceeds the Hamiltons received upon the sale of the joint tenancy property. Through Attorney Richard Chenoweth, the Hamiltons objected to this bill. Thereafter, Hamilton filed suit for fees asserting he was retained to handle the joint tenancy property as well as the will contest. The Hamiltons acknowledged that fees were owing for work Alderman performed in resolving the will contest, but objected to paying a percentage of the joint tenancy proceeds.

DISCUSSION

I. BUSINESS AND PROFESSIONS CODE SECTION 6147

Alderman contends he was entitled to a percentage of the proceeds received upon the sale of joint tenancy property. This contention lacks merit.

In determining that Alderman was not entitled to a percentage of the joint tenancy funds, the court based its decision on alternative legal theories including: (1) the Hamiltons did not hire Alderman to handle problems dealing with the joint tenancy property; (2) an agreement for a percentage of the joint tenancy property was unconscionable; (3) the fee agreement violated Civil Code section 2235; (4) Alderman violated Rule of Professional Conduct 2-107; and (5) the fee agreement violated Business and Professions Code section 6147. Because we affirm on the ground that the fee agreement did not meet stringent statutory requirements (Bus. & Prof.Code, § 6147), we need not discuss alternative grounds. We assume, as Alderman suggests, he was hired to perform services regarding the joint tenancy property as well as the will contest. However, even if there was such an agreement, the Hamiltons were not held to the contract. The fee agreement did not follow the requirements of Business and Professions Code section 6147, and thus was voidable at the Hamiltons' option.

Attorney fee agreements are evaluated at the time of their making (Houge v. Ford (1955) 44 Cal.2d 706, 713, 285 P.2d 257) and must be fair, reasonable and fully explained to the client. (Rule of Professional Conduct 2-107; cf. Hawk v State Bar (1988) 45 Cal.3d 589, 601, mod. 45 Cal.3d 743a, 247 Cal.Rptr. 599, 754 P.2d 1096.) Such contracts are strictly construed against the attorney. (Bennett v. Potter (1919) 180 Cal. 736, 740, 183 P. 156; Lane v. Wilkins (1964) 229 Cal.App.2d 315, 323, 40 Cal.Rptr. 309.) In order to protect clients and to assure fee agreements are fair and understood by clients, the Legislature...