Law Offices of Stanley J. Bell v. Shine, Browne & Diamond

• Decision Date: 14 July 1995
• Docket Number: No. A065291,A065291
• Court: California Court of Appeals Court of Appeals
• Parties: , 95 Cal. Daily Op. Serv. 5552 LAW OFFICES OF STANLEY J. BELL, Plaintiff and Appellant, v. SHINE, BROWNE & DIAMOND, et al., Defendants and Respondents.

Page 717

43 Cal.Rptr.2d 717

36 Cal.App.4th 1011, 95 Cal. Daily Op. Serv. 5552

LAW OFFICES OF STANLEY J. BELL, Plaintiff and Appellant, v. SHINE, BROWNE & DIAMOND, et al., Defendants and Respondents.

No. A065291.

Court of Appeal, First District, Division 2, California.

July 14, 1995.

Review Denied Oct. 4, 1995.

Stanley J. Bell, Law Offices of Stanley J. Bell, San Francisco, Edward J. Niland, Jr., Saratoga, for appellant Law Offices of Stanley J. Bell.

Craig A. Diamond, Shine, Browne & Diamond, Grass Valley, for respondents Shine, Browne & Diamond and Craig A. Diamond.

Joseph J. Appel, Law Offices of Joseph J. Appel, San Francisco, for respondent Joseph J. Appel.

HAERLE, Associate Judge.

I. INTRODUCTION

This is an appeal from a judgment of the San Francisco Superior Court entered after respondents' demurrer to the appellant's complaint was sustained without leave to amend. The case presents the issue of whether a 1993 order of the Nevada County Superior Court, entered in a minor's personal injury action, and purporting to deny appellant's quantum meruit lien claim for attorneys' fees in that action, bars a subsequent declaratory relief action with respect to entitlement to those fees. On the facts before us, we hold that it does and hence affirm the judgment.

II. FACTUAL AND PROCEDURAL BACKGROUND

The history of this attorneys' fee dispute starts on January 24, 1992, when Korie Rekers, a minor, was injured in a head-on automobile collision in Nevada County. A guardian ad litem was appointed for her and, in March of 1992, he retained the Nevada City firm of Shine, Browne & Diamond (Shine firm), one of the respondents herein, to represent her in an action for damages for personal injuries. This agreement was approved by the Nevada County Superior Court on April 9, 1992. ¹

Also in April of 1992, the Shine firm entered into a contract with appellant here, the Law Offices of Stanley J. Bell, a Professional Corporation, of San Francisco (Bell). Bell was, by this agreement, associated in the representation of the minor and was apparently to receive two-thirds of the attorneys' fees with the Shine firm receiving the remaining one-third. ² Bell never had a fee agreement directly with the guardian ad litem.

Throughout the remainder of 1992 Bell apparently performed certain services in the Rekers action; it is conceded by both parties that Bell expended slightly under $17,000 in litigation expenses during that period of time. Respondent Joseph J. Appel (Appel), one of Bell's employees, worked on the action during this period. However, on December 31, 1992, Appel left Bell's employ and opened his own practice in San Francisco. Shortly thereafter, he was substituted in place of Bell as associate counsel in the Rekers action, a substitution which Bell approved. Within days thereafter, however, on January 25, 1993, Bell filed a document entitled "Lien for Attorneys Fees and Costs and Request for Special Notice" in the Rekers case in the Nevada County Superior Court. By it, he claimed a "first lien for legal costs, attorneys fees quantum meruit and for any other compensation that may be claimed to be determined at the time of the settlement, other disposition, or any other appropriate time in the [Rekers] case...."

After the filing of this document, the two sets of attorneys proceeded to exchange correspondence on the subject of Bell's purported lien claim. ³ The correspondence apparently commenced with three letters in May and June of 1993 from the Shine firm to Bell requesting various information with respect to the quantum meruit fees claimed by the latter. Bell apparently answered only the last of these letters via a letter of June 14. ⁴ In it Bell asserted, inter alia, that it was "premature" to discuss his claim for fees and, for that and various additional reasons, he declined to respond with the specifics requested.

Apparently two other letters were sent by the Shine firm to Bell, both in June and both allegedly reiterating the request for detailed information with respect to the attorneys' fees claim and advising that the Shine firm would petition the court to have the attorneys' fees claim "denied in its entirety" unless the information was received by a certain date. The final letter allegedly stated that the Shine firm "would proceed under the assumption that the Law Offices of Stanley J. Bell was waiving its claim for any attorneys fees in this action."

True to their word, on September 17 respondents, on behalf of the guardian ad litem, filed and served upon Bell a petition under Code of Civil Procedure section 372 for a court order authorizing the compromise of the Rekers claim. Paragraph 12 of the petition set forth, in seven sub-paragraphs, the history of the fee dispute with Bell (or at least that history from respondents' viewpoint). This portion of the petition concluded: "Based upon the failure to provide the requested information by the Law Offices of Stanley J. Bell, and further based upon Petitioner's expressed assumption that the Law Offices of Stanley J. Bell would be waiving its asserted attorney fee quantum meruit lien claim, the asserted attorney fee quantum meruit lien claim of the Law Offices of Stanley J. Bell is respectfully requested to be denied in its entirety." The petition recited a hearing date of October 4. ⁵

Clearly by way of a defensive response, on September 28 Bell filed two documents, a "Memorandum of Points and Authorities Re Petition under CCP § 372 for Order Approving Compromise of Minor's Claim" and a supporting declaration in the Nevada County action. In the former document, after briefly outlining the basis of the dispute, Bell cited two cases ⁶ and then stated: "The above cases make it very clear that the Court in this action has no jurisdiction to deny the Law Offices of Stanley J. Bell its quantum meruit attorney fee as that is an issue that must be determined in a separate, independent action." In the second document, and obviously intending to deflect the "waiver" claim in the September 17 petition, Bell recited that he had read that petition and then stated: "At no time has the Law Offices of Stanley J. Bell either expressly or impliedly waived its right to its quantum meruit attorney fee in this action." To this declaration was attached yet another copy of his January 25 "lien."

On October 1, Bell filed the present action in San Francisco Superior Court seeking declaratory relief as to his claim for the reasonable value of his efforts in the Rekers case. ⁷

The dispute then shifted from the pleading front to the courtroom. On October 4, the Nevada County Superior Court convened a hearing on respondents' petition to compromise the Rekers claim. Bell was represented by counsel who appeared (generally, not specially) "for the lien claimant."

The court initially indicated that it anticipated reaching the issue of the lien claim, whereupon Bell's counsel asserted, "as the Points and Authorities set forth ... this court has [no] jurisdiction to make an order with respect to the attorney fees." Counsel expanded on this argument by noting that there was nothing in the petition indicating what the division should be between the two law offices then representing the tort plaintiff and, similarly, "there should not be included within this order that the former attorney's law offices of Stanley J. Bell should be denied their fee. That has to be decided in a separate action."

The court expressed some concern that, if it deferred a hearing on the Bell attorneys' fees issue, such a defense might delay action on the entire petition to the detriment of the minor. Bell's counsel responded that Bell understood that his "recourse is against the attorneys." The following interchange then took place:

"THE COURT: So then he is not claiming that he has any recourse against the funds distributed to the trust on behalf of the minor; is that correct?

"[Bell's Counsel]: Our recourse is against the attorneys.

"THE COURT: Then your lien claim is restricted to that portion of the funds that are awarded as attorney fees?

"[Bell's Counsel]: Correct."

After this interchange, Appel argued (as had his petition for the guardian ad litem) that there had been numerous unanswered requests of Bell with respect to the specifics of his quantum meruit attorneys' fees claim and that it would be "prejudicial" to the guardian to leave this issue unresolved.

Soon afterward Bell's counsel ceased using the term "lien claim" to describe the relief her client was seeking. She argued instead: "Technically a lien claim is somewhat of a misnomer.... The claim of Stanley Bell is technically not a lien claim. They are entitled to quantum meruit attorney fees. It has to be determined in a separate action, what each attorney who has done work on the case has done." Still later, she said: "We would have no objection to your approving the settlement today and taking under submission the issue of [sic] lien claim."

Two days after the October 4 hearing, the Nevada County Superior Court entered its "Order Authorizing and/or Approving Petition Under Code of Civil Procedure § 372 for Compromise of Minor's Claim." That order, which the court directed to be prepared by respondents, ⁸ included one long paragraph ( [p] 11) which essentially repeated the factual recitations contained in paragraph 12 of the September 17 petition. The order then stated: "The lien claim for quantum meruit attorney fees submitted by lien claimant be and hereby is DENIED with prejudice. This court has sole jurisdiction over the issue of attorney fees awarded in connection with the claim of a minor, such as plaintiff herein. [Citations.] The lien claimant knowingly, deliberately and voluntarily submitted to this Court a lien for quantum meruit attorney fees. The lien claimant knowingly and deliberately acknowledged in writing this Court's jurisdiction to determine the extent of attorney fees to be awarded by this court by way...