Chambers v. Kay
| Decision Date | 30 April 2001 |
| Docket Number | No. A091362.,A091362. |
| Citation | 106 Cal.Rptr.2d 702,88 Cal.App.4th 903 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Arthur CHAMBERS, Plaintiff and Appellant, v. Philip KAY, Defendant and Respondent. |
Werchick & Werchick, Arne Werchick, Truckee, Bornstein & Bornstein Jonathan H. Bornstein, San Francisco, Law Offices of Joel D. Adler, Joel Adler, San Francisco, for plaintiff and appellant.
Sedgwick, Detert, Moran & Arnold, Steven D. Wasserman, Thomas F. Kopshever, San Francisco, Law Offices of Philip Edward Kay, Philip Edward Kay, San Francisco, Lawrence Anthony Organ, for defendant and respondent.
The issues now before us arise from a dispute between two attorneys over fees generated from the successful prosecution of a case previously before us. (See Weeks v. Baker & McKenzie (1998) 63 Cal. App.4th 1128, 74 Cal.Rptr.2d 510.) The trial court entered judgment against appellant in his action for breach of an agreement with respondent for division of attorney fees. The trial court found that the agreement violated rule 2-200 of the Rules of Professional Conduct, and appellant's action for quantum meruit barred by the lapse of the two-year statute of limitations. We conclude that appellant cannot recover a portion of the contingent fee under the agreement, but is entitled to proceed with his claim for quantum meruit.
Appellant and respondent were attorneys with separate law practices in San Francisco. They had individual office letterheads, and respondent listed his professional address as his home law office on 43rd Avenue. Respondent also maintained a separate professional liability insurance policy for his practice. Appellant and respondent did not list each other as employees or partners in any official documents they filed.
However, in accordance with an "arrangement" between appellant and respondent, they shared office space in 1992 and 1993. Respondent rented a conference room in appellant's office building on Sutter Street for $200 per month, to meet with clients and conduct depositions. Although apparently not part of the formal arrangement, respondent also customarily used appellant's office telephone service, law library, postage, fax and copy machines, maintained files and a computer in the office, rented a monthly parking space in the building parking lot, and was listed as a "co-tenant" on the building directory. Appellant "assisted" respondent with his work on a few cases. In addition, appellant's staff "regularly" provided assistance to respondent with "case-related documents."
During 1993, at respondent's request appellant became "co-counsel" in a sexual harassment action previously filed by respondent on behalf of his clients, Rena Weeks and Mary Rossman, against the law firm of Baker & McKenzie and attorney Martin Greenstein (hereafter the Weeks case). The oral "contractual arrangement" between appellant and respondent provided for appellant to receive "1/6 of the attorney's fee" received in the Weeks case. Appellant's role in the litigation was to "maintain the files," conduct discovery assigned to him by respondent, confer with Weeks in the office, and appear "as co-counsel on her behalf at pretrial hearings. Appellant continued to work on other cases he had at the time. In pleadings filed in the Weeks case, appellant and respondent were both listed as counsel for plaintiffs, at the Sutter Street office address. Appellant also advanced costs and expenses in the case in the amount of $3,356.32.
During discovery in the Weeks case, a dispute arose between appellant and respondent over disclosure to the defendants of confidential records of psychiatric evaluations and treatment of Weeks at the Devereux Foundation "following severe injuries she suffered in an automobile accident as a child," and appellant's perceived efforts to persuade Weeks to settle the case. On September 29, 1993, respondent sent notification by letter to appellant that he had been removed effective immediately "from the Weeks and Rossman cases," with the approval of the clients. In the letter, respondent complained of appellant's "differing approach to these cases" and "failure to consult me on a variety of matters." The letter also confirmed that appellant would "receive the compensation agreed upon" between them earlier: in the event of settlement of the case before depositions, "16.5% of the attorney's fees called for under my agreement with my clients, which is 40% of the monies recovered;" thereafter, an "increase to 28%" of the fees specified under the agreement with the clients; and, reimbursement of the costs advanced by appellant to date.1 Respondent sent a copy of the letter to Weeks, but did not obtain the client's written consent to appellant's removal from the case or the proposed compensation to be paid to him.
By return letter appellant accepted the compensation in the Weeks case offered by respondent. On September 30, 1993, respondent filed a "Notice of Association and Disassociation of Counsel" in the Weeks case, which stated that Alan B. Exelrod had been "associated as counsel of record" in place of appellant.
By letter dated November 1, 1993, respondent further complained of appellant's "malfeasance" and violation of fiduciary duties to the clients in the Weeks case. Respondent reiterated that appellant would receive the "payment as originally agreed upon of one-sixth of the attorney's fees of forty-percent (40%)" recovered in the Weeks case upon submission of his "time records," but would not receive payment in the "Rossman case." This letter, unlike the letter of September 29, did not show a copy to the clients.
The Weeks case proceeded to jury trial in July of 1994, and resulted in a large award of compensatory and punitive damages for plaintiff Weeks, along with a significant award of attorney fees under Government Code section 12965, subdivision (b). Counsel for respondent and Exelrod informed appellant in a letter sent to him on October 28, 1994, that his "failure to perform legal services" in the Weeks case, the "wholly improper accounting" he provided in his attorney fees billing statement, and unforeseen "changed circumstances," all served "as a basis for abrogation of any agreement" between them as to a division of fees. This letter contained an offer to compensate appellant for his services in the Weeks case in the amount of "$200 per hour for the total number of hours" specified in his prior billing statement. Appellant declined respondent's offer, and suggested mediation of the fee dispute between them.
The judgment in favor of Weeks, including the attorney fee award, was ultimately affirmed on appeal by this court in Weeks v. Baker & McKenzie, supra, 63 Cal. App.4th 1128, 74 Cal.Rptr.2d 510. After the judgment in the Weeks case was satisfied and respondent obtained his attorney fees in September of 1998, the present action for breach of contract and common counts was filed by appellant on May 28, 1999. This appeal is from summary judgment granted in favor of respondent on grounds that the "alleged agreement" between the parties for division of fees is unenforceable as violative of rule 2-200 of the Rules of Professional Conduct, and the common count action for quantum meruit is barred by the governing statutes of limitations (Code Civ. Proc., §§ 337, 339).2
Appellant argues that the trial court erred by finding the agreement between the parties for the division of attorney fees in the Weeks case "unenforceable as against public policy" for lack of compliance with rule 2-200, which prohibits any division of "a fee for legal services with a lawyer who is not a partner of, associate of, or shareholder" with the attorney "unless: [¶] (1) The client has consented in writing thereto after a full disclosure has been made in writing that a division of fees will be made and the terms of such division."3 Appellant claims that his agreement with respondent does not fall within the scope of rule 2-200, and even if it does the violation or illegality does not render the contract invalid.
Our task in reviewing the entry of summary judgment in respondent's favor is to determine whether a triable issue of material fact remains to be adjudicated and not to decide the merits of the issues raised. (Flowmaster, Inc. v. Superior Court (1993) 16 Cal.App.4th 1019, 1025, 20 Cal.Rptr.2d 666.) "A motion for summary judgment is properly granted if the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Jackson v. Ryder Truck Rental, Inc. (1993) 16 Cal.App.4th 1830, 1836, 20 Cal.Rptr.2d 913.) "`" ...'"' (Flowmaster, Inc. v. Superior Court, supra, at pp. 1025-1026, 20 Cal.Rptr.2d 666.) We conduct a de novo examination of the evidence and independently review the trial court's determination of questions of law. (Campanano v. California Medical Center (1995) 38 Cal. App.4th 1322, 1327, 45 Cal.Rptr.2d 606; Romero v. American President Lines, Ltd. (1995) 38 Cal.App.4th 1199, 1203, 45 Cal. Rptr.2d 421.)
In our review of the trial court's finding that the agreement was illegal and unenforceable, we first confront appellant's contention that rule 2-200 "is inapplicable" to an agreement between attorneys for division of...
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