Isrin v. Superior Court of Los Angeles County

• Decision Date: 07 July 1965
• Court: California Supreme Court
• Parties: , 403 P.2d 728 Shirley ISRIN, Petitioner, v. The SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; COUNTY OF LOS ANGELES, Real Party in Interest. L. A. 28322.

Page 320

45 Cal.Rptr. 320

63 Cal.2d 153, 403 P.2d 728

Shirley ISRIN, Petitioner, v. The SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent COUNTY OF LOS ANGELES, Real Party in Interest.

L. A. 28322.

Supreme Court of California, In Bank.

July 7, 1965.

Lillian Finan, Beverly Hills, for petitioner.

Irmas & Rutter and William A. Rutter, Beverly Hills, as amici curiae on behalf of petitioner.

Harold W. Kennedy, County Counsel, and Donald K. Byrne, Deputy County Counsel, for respondent and real party in interest.

MOSK, Justice.

This matter is before us on a petition for writ of mandamus to compel the respondent court to make an order allowing petitioner to prosecute a pending civil action without prepayment of jury fees. The choice of remedy is proper. (Martin v. Superior Court (1917) 176 Cal. 289, 168 P. 135, L.R.A.1918B, 313.)

The issue presented is whether an indigent plaintiff should be denied the right to proceed in forma pauperis on the sole ground that his or her attorney, who is presumably solvent, is acting under a contingent fee contract. The question is one of first impression in this court, but the District Court of Appeal has held in Gomez v. Superior Court (1933) 134 Cal.App. 19, 24 P.2d 856, that the attorney's contingent interest in the litigation is sufficient to bar his client from suing in forma pauperis. As will appear, we have concluded that the Gomez rule is supported neither by sound reasoning nor by authority, and hence should be disapproved and a contrary rule declared.

The County of Los Angeles, as real party in interest, entered a general demurrer to the petition for mandate; for our purposes, therefore, the facts alleged by petitioner are deemed to be true. (Kleiner v. Garrison (1947) 82 Cal.App.2d 442, 445, 187 P.2d 57.) Those facts may be summarized as follows: petitioner filed the present action for personal injuries and property damage arising out of an automobile accident allegedly caused by the negligence of defendant Sylvia Bixby. At pretrial conference petitioner demanded a jury trial, and thereafter noticed a motion for waiver of prepayment of jury fees on the ground of indigency. In support of the motion petitioner filed a declaration averring that she 'is unable to pay jury fees or any other legal fees. There is no way that declarant can raise the funds with which to prosecute her action, as she is having difficulty raising funds for food and other necessaries. Declarant has been incapacitated for work of any kind since October 25, 1962, the date upon which she received the injuries sued upon in the instant case.' Petitioner's attorney also filed a declaration stating that in her opinion 'the plaintiff's (petitioner's) best interests will be served by having a jury trial in the above-entitled matter'; that she has a contingent fee contract with petitioner entitling her to one-third of any amount recovered in the action and providing that petitioner 'shall advance all costs of suit'; and that she (the attorney) 'is unwilling to loan to plaintiff (petitioner) the $500.00 to $750.00 it may take for jury fees to prosecute this case.'

Prior to the hearing petitioner agreed to give the county a lien for jury fees against any award or settlement made in the action, and the county thereupon agreed not to oppose petitioner's motion for waiver of such fees. The court nevertheless denied the motion, apparently under the compulsion of Gomez v. Superior Court (1933) supra, 134 Cal.App. 19, 24 P.2d 856.

The facts in Gomez were similar to the case now before us; there, an indigent plaintiff applied for permission to prosecute his action without prepayment of jury and reporter's fees, and the trial court denied his application for the sole reason that his attorney was retained on a contingency basis. In denying a petition for writ of mandate, the District Court of Appeal relied on the general rule that an indigent litigant should not be allowed to proceed in forma pauperis 'where the right sought to be enforced, or to be protected, is one in which some person who is presumably financially responsible is either equally or partially interested with the litigant, as by a joint, a common, or a community interest in the subject-matter of the existing or proposed litigation.' (134 Cal.App. at p. 21, 24 P.2d at p. 856.)

Properly circumscribed, there can be no quarrel with this rule of law. It serves to prevent abuses of the right to proceed in forma pauperis when suit is filed in the name of an indigent but merely representative plaintiff for the use or benefit of a nonindigent person who is in fact the real party in interest. Thus the rule has been invoked in suits or appeals by an executor or administrator on behalf of an estate (Boggan v. Provident Life & Accident Ins. Co. (5th Cir. 1935) 79 F.2d 721), by a trustee on behalf of beneficiaries (Scott v. Turpin (1866) 30 Ga. 964), and by a guardian on behalf of his ward (Roberts v. Carmichael (1942) 68 Ga.App. 595, 23 S.E.2d 272; in general, see cases collected in Note 11 A.L.R.2d 609-617). The question to be resolved here is whether, as held in Gomez, the same rule should apply to bar proceeding in forma pauperis in a suit by an indigent plaintiff whose attorney is acting under a contingent fee arrangement.

The Gomez decision was predicated on a process of conceiving extreme hypotheses and drawing a fortiori conclusions therefrom, and the assertedly favorable weight of authority on this point in other jurisdictions. Upon closer examination, however, neither ground is tenable.

A sounder approach than that of Gomez will be found in an analysis of the precise nature of an attorney's interest in litigation conducted under a contingent fee contract. While that interest has been considered in a variety of contexts (see, e. g., Herron v. State Farm Mutual Ins. Co. (1961) 56 Cal.2d 202, 205-206, 14 Cal.Rptr. 294, 363 P.2d 310 (attorney's interest protected against tort of intentional interference with contractual relationship)), it has most frequently been the subject of judicial scrutiny in proceedings to enforce a claimed attorney's lien, to compel substitution of attorneys, and to settle a dispute over attorney's fees by intervention in the client's action.

In this state attorney's liens are provided by legislation in certain limited instances (e. g., Code Civ.Proc. § 763; Lab.Code, § 4903; City of Los Angeles v. Knapp (1936) 7 Cal.2d 168, 173-174, 60 P.2d 127), and may be created by express provision of the retainer contract between the attorney and his client (Haupt v. Charlie's Kosher Market (1941) 17 Cal.2d 843, 845, 112 P.2d 627). Beyond this point, however, the law of attorney's liens in California today is much less clear. On the one hand, it has been said in a line of decisions stretching from Ex parte Kyle (1850) 1 Cal.332, to Jones v. Martin (1953) 41 Cal.2d 23, 27, 256 P.2d 905, that our courts do not recognize the common-law charging lien of an attorney for his fee. (See cases collected in 6 Cal.Jur.2d, Attorneys at Law, p. 412, fn. 18.) On the other hand, the Kyle rule has been increasingly disregarded in practice. ¹

As contingent fee contracts are subject to the normal rules of construction of fiduciary agreements (Tracy v. Ringole (1927) 87 Cal.App. 549, 551, 262 P. 73), a charging lien will be imposed if the parties have manifested an intention that the attorney shall look to the judgment as security for his fee even though the word 'lien' has not been used (Wagner v. Sariotti (1943) 56 Cal.App.2d 693, 697, 133 P.2d 430 (client executed 'assignment' to attorney of one-third interest in recovery, if any); see generally Note 143 A.L.R. 204); and in some cases the evidence held to demonstrate such an intent has been slight indeed (compare Bartlett v. Pacific Nat. Bank (1952) 110 Cal.App.2d 683, 689-691, 244 P.2d 91, with Morrison v. Havens (1938) 24 Cal.App.2d 504, 75 P.2d 515). Another line of decisions, while not speaking in terms of a 'lien,' holds that the mere execution of a contingent fee contract transfers ipso facto to the attorney a 'vested equitable interest' in his proportionate share of the proceeds. (See cases collected in 6 Cal.Jur.2d, Attorneys at Law, § 192.) As Professor Radin has remarked (28 Cal.L.Rev. at p. 597, fn. 26), 'How these cases are to be reconciled to the doctrine that there is no lien for the attorney in California is not quite clear.' An answer may lie in the fact that typically these were suits to establish an interest in real property, and the plaintiff had agreed by contract to convey to his attorney, as compensation for the latter's services in conducting the litigation, a certain percentage of whatever land might be recovered. Analogizing to the settled rule of equity in suits on a contract for the sale of land, the courts held that upon execution of the contingent fee contract the attorney, like a vendee, immediately acquired equitable title to his share of the land and that such interest would be protected, if necessary, by the imposition of a constructive trust. (See, e. g., Hoffman v. Vallejo (1873) 45 Cal. 564, 572; Luco v. De Toro (1891) 91 Cal. 405, 417-418, 18 P. 866, 27 P. 1082; cf. Howell v. Budd (1891) 91 Cal. 342, 350-352, 27 P. 747.) While the analogy is not free from doubt, the holdings of these early land cases have been extended in more recent times to personal injury actions, with little apparent concern for niceties of definition. (Jones v. Martin (1953) supra, 41 Cal.2d 23, 27, 256 P.2d 905; Gostin v. State Farm Ins. Co. (1964) 224 Cal.App.2d 319, 324, 36 Cal.Rptr. 596.) In these circumstances it is problematical whether much vitality remains in the Kyle rule.

For our present purposes, however, we need not attempt resolution of such conflicts in the law of attorney's liens. It will be enough to observe that in whatever terms one characterizes an attorney's lien under a contingent fee contract, it is no more than a security interest in the proceeds of...