Jackson v. LegalMatch.com

• Decision Date: 26 November 2019
• Docket Number: A152442
• Citation: 42 Cal.App.5th 760,255 Cal.Rptr.3d 741
• Court: California Court of Appeals Court of Appeals
• Parties: Dorian L. JACKSON, Cross-complainant and Appellant, v. LEGALMATCH.COM, Cross-defendant and Respondent.

42 Cal.App.5th 760

255 Cal.Rptr.3d 741

Dorian L. JACKSON, Cross-complainant and Appellant,

v.LEGALMATCH.COM, Cross-defendant and Respondent.

A152442

Court of Appeal, First District, Division 4, California.

Filed November 26, 2019

As Modified on Denial of Rehearing December 17, 2019

Lohr Ripamonti & Segarich, Alec L. Segarich, Jason S. Lohr, for Cross-complainant and Appellant.

Litigation Law Group, Gordon Fauth ; Kenneth LaMance, for Cross-defendant and Respondent.

BROWN, J.

OVERVIEW

LegalMatch.com (LegalMatch) is an online service company that connects individuals seeking legal assistance to lawyers who have purchased a LegalMatch subscription. LegalMatch sued Dorian Jackson, a lawyer, when he allegedly failed to pay for his LegalMatch subscription. Jackson cross-claimed on the basis that LegalMatch is operating an uncertified lawyer referral service in violation of Business and Professions Code ¹ section 6155, rendering the subscription contract illegal and unenforceable. After a bench trial, the court rejected Jackson’s argument, finding that LegalMatch does not engage in referral activity within the meaning of section 6155. We disagree and therefore reverse and remand.

BACKGROUND

I. LegalMatch’s Services

LegalMatch operates an online website, www.legalmatch.com, that connects individuals to lawyers. Individuals who utilize the service are invited to fill out an intake form with information about their legal issue. Users must select their specific geographic location and the legal category that relates to their issue, such as business litigation, family law, criminal defense, or intellectual property. Depending on the legal category selected, LegalMatch requests additional information from potential clients about issues "prospective attorneys would like to hear." However, responding to the requests for additional information is not mandatory, and the potential clients’ answers can be "gibberish." Potential clients may also write a "summary of [their] case," but they are not required to do so. LegalMatch’s website represents that this process is designed to mimic a "lawyer ... during an initial consultation." Finally, individuals may require a lawyer with a minimum number of years of experience and designate a preferred method of payment.

Potential clients are required to accept LegalMatch’s terms and conditions before the intake process is completed. In its terms and conditions, LegalMatch represents that it "does not screen or vouch for any of its users." Additionally, LegalMatch includes a disclaimer that it "[p]rovid[es] a service where potential clients and legal professionals can meet. [It d]oes not imply an endorsement of any subscribing attorney or service provider. LegalMatch makes no representation concerning an attorney’s qualifications, except the attorney was licensed to practice in at least one state at the time of registration nor does it sanction statements that an attorney may post on the system. LegalMatch makes no representations concerning the qualifications of non-attorney legal service providers. [A client’s] case will not be reviewed by non-attorney legal service providers by consent. LegalMatch does not screen individual cases or otherwise channel potential clients to select attorneys."

Once individuals have completed the intake process and accepted the terms and conditions, LegalMatch communicates the information collected during the intake process to lawyers who have subscribed to LegalMatch’s service. Only subscribing lawyers associated with the geographic location and legal category selected by the potential client receive the information. LegalMatch sends information to lawyers based solely on the client’s selection of geographic location and area of expertise. After the lawyers receive this information, each lawyer has the opportunity to affirmatively reach out to the individual. The lawyer must first utilize LegalMatch’s platform to initiate contact with the potential client. Depending on the client’s preferences, the potential client may choose to send contact information to the lawyer so that they may continue their discussion outside of the platform. Lawyers and clients negotiate between themselves to determine the parameters of their attorney-client relationship.

LegalMatch’s business model relies on yearly or multi-year subscriptions that lawyers may purchase to receive LegalMatch’s intake information. Each lawyer who purchases a subscription is slotted into a geographic location and category of legal expertise. The number of lawyers in a geographic location and category of legal expertise is limited by an algorithm (allocation system) that maintains LegalMatch’s profitability by balancing the number of clients and lawyers available. For example, LegalMatch placed Jackson on a waiting list before he was accepted to the panel of subscribing lawyers for the category of wills, trusts, and estates.

Potential clients may use the site for free, and LegalMatch receives no fee for the successful formation of an attorney-client relationship.

II. Procedural History

Dorian Jackson purchased a subscription with LegalMatch, initially in the field of business litigation and then, after he was accepted, in the category of wills, trusts, and estates. When LegalMatch sued Jackson to recover unpaid subscription fees, Jackson cross-claimed, asserting that LegalMatch was an uncertified lawyer referral service that was operating in violation of section 6155.²

The parties attempted to resolve the issue of whether LegalMatch operated as a lawyer referral service through cross-motions for summary adjudication. Because the trial court was unable to decide the issues on summary adjudication, the parties proceeded to a bench trial to present evidence on the issue of whether LegalMatch’s system constituted a lawyer referral service.

After hearing evidence, the trial court issued a statement of decision in which it found that LegalMatch was not a lawyer referral service governed by section 6155. The court and parties agreed that determining whether LegalMatch operated a lawyer referral service depended on the resolution of two questions, apparently gleaned from the language of section 6155 : "Does LegalMatch.com engage in referral activity? If so, does it operate for the direct or indirect purpose of engaging in referral activity?" The court found that "[t]he answer to both questions is ‘no.’ " In reaching this conclusion, the trial court reasoned that LegalMatch "[did] not in fact exercise any judgment on any legal issue ... [and did] not evaluate the consumer’s input in order to generate a conclusion that a legal issue [was] presented."

This appeal followed.

DISCUSSION

Jackson asserts that the trial court erred when it found that LegalMatch did not engage in referral activity because it did not exercise judgment on a client’s legal issues. Based on our interpretation of the statute and the plain meaning of the term "referral," we agree. Under section 6155, it does not matter whether LegalMatch exercises judgment on an individual’s legal issues before communicating that information to a lawyer. Rather, a referral occurs when an entity directs or sends a potential client to an attorney.

I. Standard of Review

While reviewing a judgment based upon a statement of decision following a bench trial, the appellate court reviews the trial court’s findings of fact under a substantial evidence standard. ( Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981, 212 Cal.Rptr.3d 158.) In applying the substantial evidence standard, an appellate court defers to a trial court’s findings of fact by "liberally constru[ing] [them] to support the judgment." ( Ibid. ) The court considers the evidence in the light most favorable to the prevailing party and draws all reasonable inferences in support of the findings. ( Ibid. ) However, questions of law—such as the interpretation of a statute—are reviewed de novo. ( Ibid. ; see Smith v. Superior Court (2006) 39 Cal.4th 77, 82–83, 45 Cal.Rptr.3d 394, 137 P.3d 218.) Jackson does not dispute the trial court’s factual findings regarding LegalMatch’s operations. Instead, he argues that he is entitled to reversal under a de novo interpretation of section 6155 in light of the undisputed facts. We agree and review the trial court’s interpretation of section 6155 de novo. (See Community Youth Athletic Center v. City of National City (2013) 220 Cal.App.4th 1385, 1407, 164 Cal.Rptr.3d 644 [applying de novo review to questions of statutory interpretation arising from a judgment based on a statement of decision].)

II. Governing Legal Principles

In interpreting a statute, this court’s "fundamental task ... is to determine the Legislature’s intent so as to effectuate the law’s purpose." ( Meza v. Portfolio Recovery Associates, LLC (2019) 6 Cal.5th 844, 856, 243 Cal.Rptr.3d 569, 434 P.3d 564 ( Meza ).) The court first examines the statutory text, giving it a "plain and commonsense" meaning. ( Ibid. ) If the language is clear, the court must follow the text’s plain and commonsense meaning unless a literal interpretation would result in absurd consequences the Legislature did not intend. ( Ibid. ; City of San Jose v. Superior Court (2017) 2 Cal.5th 608, 616, 214 Cal.Rptr.3d 274, 389 P.3d 848.) The plain and commonsense meaning governs "unless the statute specifically defines the words to give them a special meaning." ( MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1082–1083, 36 Cal.Rptr.3d 650 ( MacIsaac ).) The statutory language is not examined in isolation but is reviewed in the context of the statutory framework while giving effect to the apparent purpose of the statute. ( Ibid. ; Meza , at pp. 856–857, 243 Cal.Rptr.3d 569, 434 P.3d 564.) If the statutory language is ambiguous and allows for more than one reasonable interpretation, we turn to maxims of construction and the legislative history to inform our interpretation of the statute. ( Meza , at p. 856, 243...