Kallen v. Delug
| Decision Date | 28 June 1984 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Norman H. KALLEN, Plaintiff and Respondent, v. Samuel P. DELUG, individually; Samuel P. Delug, a Professional Law Corporation; Delug & Matyas, a Professional Law Corporation; Delug & Matyas, a law partnership, Defendants and Appellants. Civ. 68793. |
Horvitz & Greines, Horvitz & Levy, and Gordon D. Soladar, Alan G. Martin, David M. Axelrad and Barry R. Levy, Encino, for defendants and appellants.
Katz, Friedman & Scott, and Martin Z.N. Katz, Los Angeles, for plaintiff and respondent.
Defendant Samuel P. Delug 1 appeals from a summary judgment entered in favor of plaintiff Norman H. Kallen on the first and second causes of action of plaintiff's second amended complaint, alleging respectively the breach of an oral contract and the breach of a written contract.
In January 1979, plaintiff filed a complaint against defendant and others, alleging nine separate causes of action on various theories, including breach of contract, fraud and quantum meruit. Following assorted procedural rulings, defendant answered plaintiff's second amended complaint and the parties undertook discovery proceedings. Ultimately, the matter was set for trial on June 28, 1982.
On May 22, 1982, defendant moved for an order determining certain issues to be without substantial controversy (formerly a As a consequence, defendant once again moved for partial summary judgment, the motion to be heard on August 3, 1982. The trial court granted defendant's motion as to all causes of action except quantum meruit, but plaintiff moved to set aside the order granting defendant's motion on the ground of lack of notice. Consequently, the court vacated its ruling, stayed the motion and set it for reargument on August 31. Plaintiff moved for the partial adjudication of issues, the motion also to be heard on August 31. Each of these motions was based on declarations and particular documentary evidence attached thereto, as well as all records, pleadings and other papers on file in the instant action. After hearing the respective motions, the trial court granted plaintiff's motion and denied defendant's. Subsequently, on October 5, 1982, plaintiff moved for summary judgment on the first and second causes of action. The trial court granted the motion, after which judgment was entered accordingly. Plaintiff dismissed the remaining causes of action without prejudice.
motion for partial summary judgment), the motion to be heard on June 1. After plaintiff interposed an objection on the ground the motion had been made less than 45 days before the commencement of trial, the court continued the matter to June 28, 1982, determining that it should be heard at time of trial. Thereafter, due to court congestion, the trial was continued until January 1983.
The evidentiary papers on file in the underlying motions at issue herein include the declaration of defendant, the declaration of defendant's attorneys Laurence Strick and Gordon D. Soladar, plaintiff's declaration, authenticated copies of retainer agreements and a substitution of attorney signed by Marna Balin, the transcript of defendant's deposition testimony and a letter addressed to defendant and dated December 6, 1974, bearing plaintiff's signature and defendant's written acknowledgement. From these materials we glean the following pertinent facts.
In late 1974, defendant met with Marna Balin (Balin), who told him the circumstances of two automobile accidents she had suffered in 1972 and indicated she wished to discharge the attorney presently handling the matters; that attorney was plaintiff. Balin requested that defendant "immediately obtain the files for her case" from plaintiff. As a consequence, defendant wrote to plaintiff at least twice, requesting that he execute a substitution of attorney at the request of his client, Balin, and transmit all of Balin's files to defendant's office. Balin had signed a substitution of attorney form on November 27, 1979.
When plaintiff failed to respond to defendant's correspondence, defendant telephoned him. Plaintiff stated to defendant that
Defendant told plaintiff that Balin was pressing him to obtain her files from plaintiff. He also expressed to plaintiff his view of plaintiff's ethical responsibilities
On December 6, 1979, plaintiff wrote to defendant, memorializing his understanding of an acceptable fee arrangement. The letter states: "This letter is being written to confirm my understanding with respect to executing Substitution of Attorney forms concerning the [Balin] matters. I have agreed to execute the Substitution of Attorney forms under the following conditions:
Defendant's client, Balin, "was extremely anxious for me to begin working on her case and I did not feel it fair on [plaintiff's] part to compel me to seek an order of court directing him to execute a substitution of attorneys (sic) and/or deliver [Balin's] files to my office." Consequently, defendant felt he had no choice but to acknowledge the terms of the letter agreement. Defendant signed the letter in acknowledgement of its terms in the space provided on December 9, 1979 and returned it to plaintiff. On December 12, plaintiff executed the substitution of attorney and surrendered Balin's case files to defendant.
In contraposition to defendant's version of events, plaintiff simply stated: "I at all times negotiated openly and freely with [defendant], never in any way attempted to, or in fact intimidated, threatened, or otherwise deprived [defendant] of his willing capacity to negotiate with me; at all times during my discussion with him, we engaged in free and open dialogue and always there was a healthy give-and-take ...; at all times during those discussions, [defendant] left me with the unmistakeable impression ... that he did not perceive himself to be victimized by me ...."
After receiving Balin's case files from plaintiff, defendant discovered that a great deal of work remained to be done to bring the cases into a state of trial readiness. Significant gaps in the record required further conferences with Balin to clarify the factual circumstances of the cases. Defendant also became concerned about what he perceived as a conflict of interest in plaintiff's joint representation of Balin and another party. In view of the scope of the remaining preparation necessary on Balin's cases, defendant eventually associated another attorney with himself in Balin's representation. This attorney, Steven Gorman, thereafter undertook primary responsibility for preparing the cases for trial. Plaintiff repeatedly had urged Balin to settle the cases for $25,000; the cases ultimately were settled for $810,000.
Pursuant to defendant's contingency fee agreement with Balin, the total attorney's fee amounted to $324,000. In accordance with defendant's subsidiary fee-sharing agreement with Attorney Gorman, defendant's professional corporation received 50% of that amount, while the remainder went to Attorney Gorman. Following the settlements, plaintiff demanded 40% of the resulting $324,000 fee. Defendant took the position that the letter agreement was unenforceable on the ground it was contrary to public policy and refused to honor plaintiff's demand. Instead, defendant offered plaintiff a sum which defendant believed represented the reasonable value of plaintiff's services prior to his discharge. Plaintiff rejected the offer, after which he initiated the instant action.
Defendant contends the trial court erroneously granted summary judgment, in that defendant's evidence establishes the fee-splitting agreement is illegal and contrary to public policy and, hence, unenforceable.
Defendant further contends the trial court erroneously granted summary judgment, in that defendant's evidence establishes the fee-splitting agreement was not supported by valid consideration, but was obtained by duress.
Finally, defendant asserts the trial court erroneously...
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