McCall v. Morris Polich & Purdy
| Decision Date | 30 October 2012 |
| Docket Number | B239142 |
| Court | California Court of Appeals Court of Appeals |
| Parties | BRANDON MCCALL, Plaintiff and Respondent, v. MORRIS POLICH & PURDY et al., Defendants and Respondents; THE QUISENBERRY LAW FIRM, Objector and Appellant. |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County
APPEAL from a judgment of the Superior Court of Los Angeles County, Michelle R. Rosenblatt, Judge. Affirmed.
The Quisenberry Law Firm and John N. Quisenberry; Esner, Chang & Boyer and Stuart B. Esner, for Objector and Appellant.
Shenoi Koes LLP and Allan A. Shenoi, for Defendant and Respondent Shenoi Koes LLP.
Morris Polich & Purdy LLP, Richard H. Nakamura, Jr., and David J. Vendler, for Defendant and Respondent Morris Polich & Purdy LLP.
No appearance on behalf of Plaintiff and Respondent.
This appeal involves a dispute over class action attorney fees. Two law firms, Morris Polich & Purdy LLP and Shenoi Koes LLP, were named as defendants in an arbitration proceeding. Brandon McCall, Barry Selbst, Kelly-Slate Diaz and Dani Reagan are the named plaintiffs of the salaried managers' subclass in the class action. They are likewise the plaintiffs in the arbitration proceeding. The parties refer to the salaried managers' subclass as the McCall subclass. Defendants had represented the entire class during part of the wage and hour class action. Opposing defendants in the attorney fee dispute is the Quisenberry Law Firm, which appeared through its principal, John N. Quisenberry. Mr. Quisenberry represented the McCall subclass during a portion of the class action. Mr. Quisenberry negotiated a settlement on the McCall subclass's behalf. For clarity's purpose, we will refer to Morris Polich & Purdy LLP and Shenoi Koes LLP as defendants and the Quisenberry Law Firm as Mr. Quisenberry.
The arbitrator ruled defendants were entitled to 65 percent of the $380,000 attorney's fees award. However, Mr. Quisenberry is not a party to any arbitration agreement relevant to this case. And although defendants were ordered to arbitrate with their former clients, Mr. Quisenberry was not. When defendants attempted to compel Mr. Quisenberry to participate in the arbitration, he successfully resisted their efforts. Mr. Quisenberry was not a party during the arbitration. Despite the fact that he was not a party to the arbitration, the arbitrator ruled Mr. Quisenberry was entitled to 35 percent of the $380,000 attorney fee award.
In post-arbitration confirmation proceedings, Judge Michelle R. Rosenblatt confirmed the 65 percent award in favor of defendants. Judge Rosenblatt entered judgment in defendants' favor for $270,000 which is 65 percent of the $380,000 attorney's fees. But Judge Rosenblatt corrected the arbitrator's award by deleting the 35 percent allocation to Mr. Quisenberry. We affirm because the arbitrator had no power to allocate fees in Mr. Quisenberry's favor. And Judge Rosenblatt had the authority to correct the award because the issue of Mr. Quisenberry's rights to fees was not part of the"controversy submitted" to the arbitrator. (Code Civ. Proc.,1 § 1286.2, subd. (a)(4); Jones v. Humanscale Corp. (2005) 130 Cal.App.4th 401, 405, 411-412; Ikerd v. Warren T. Merrill & Sons (1992) 9 Cal.App.4th 1833, 1837, 1842-1846.)
A wage and hour dispute arose with employees of Labor Ready, Inc. In August 2004, the employees rejected the employer's $3.7 million settlement offer. On February 6, 2003, defendants filed a wage and hour class action on behalf of all of the employer's managers and salaried employees. (Romer v. Labor Ready, Inc. (Super. Ct. L.A. County, Feb. 6, 2003, No. BC289925.) On October 26, 2005, defendant substituted out of the case following a tentative ruling it had a conflict of interest. The conflict of interest arose because defendants were representing both the salaried managers and hourly workers. (We express no opinion as to whether any conflict of interest existed.) Mr. Quisenberry substituted in as counsel for the McCall subclass; the salaried managers. The hourly workers had separate counsel. On December 17, 2007, after a one-day mediation, Mr. Quisenberry successfully negotiated a settlement on behalf of the McCall subclass. Under the settlement, the employer agreed to pay attorney fees, exclusive of costs in an amount not exceeding 25 percent of the settlement amount.
On December 19, 2007, defendants filed a notice of lien in the wage and hour class action. The lien notice states in part,
On September 15, 2008, Judge Anthony J. Mohr held a hearing. The purpose of the hearing is unclear. We wish to emphasize that what follows is a summary of what the attorneys said. No under oath showing was made at the September 15, 2008 hearing. During the hearing, defendants argued they were entitled to $525,000 in attorney fees based on their representation of their clients during the initial period of the lawsuit. As noted, defendant had substituted out of the wage and hour action on October 26, 2005. The employer's counsel explained that his client had initially made a $3.5 million settlement offer plus attorney fees. The employer's counsel argued that: during the time defendant was representing plaintiffs, the matter had been pursued on a nationwide basis; if the attorney fee issue was not resolved, then class member payments might be withheld; and this was because it did not want to become liable if the class member settlement amounts were subject to defendant's lien notice. Judge Mohr indicated that the settlement might not be approved because of defendants' lien notice. Defendants agreed they would not "claim any portion of the amount paid to the class" as attorney's fees. Defendants further agreed not to pursue the employer for any amount above the court awarded fees.
Judge Mohr then ruled that he would determine the amount of the total attorney fee award. But Judge Mohr declined to allocate the fees between defendants and Mr. Quisenberry. Judge Mohr indicated that the fee allocation issue could be argued between defendants and Mr. Quisenberry in a different forum. Judge Mohr awarded attorney fees in the amount of $380,000.
On October 17, 2008, Judge Mohr entered an order approving the class action settlement and disbursement of funds. The October 17, 2008 order awarded attorney fees as follows: Judgment on cost issues was reserved for further briefing.
On December 11, 2008, Judge Mohr issued an order awarding costs of $12,000 to Mr. Quisenberry. As part of the order, Judge Mohr rejected defendants' argument they were entitled to a cost award of $165,000. Judge Mohr noted that paragraph 8 of the stipulated settlement provided that the employer would not dispute payment of costs not exceeding 25 percent of the settlement amount. Paragraph 8 also provided that the term "class counsel" was defined in the stipulated settlement to mean Mr. Quisenberry. Judge Mohr wrote, "In other words, to the extent that the Joint Stipulation addresses the issue of costs, it only addresses costs to be paid to [Mr. Quisenberry], not [defendants]." Judge Mohr stated that defendants had not cited to any authority which allowed a cost award in their favor. However, in Judge Mohr's view, Mr. Quisenberry's entitlement to costs was based on the settlement agreement.
In November 2008, Mr. Quisenberry filed a motion entitled, "Motion for an order that [defendants'] conflict in interest precludes their right to recover costs and attorney fees." On January 27, 2009, Judge Mohr denied Mr. Quisenberry's motion to prevent defendants from receiving any attorney fees based on the previously mentioned conflict of interest. During the hearing, the parties discussed the issue of how to resolve their attorney fee dispute. Judge Mohr ordered a petition to arbitrate be filed within 30 days. However, Judge Mohr stated he was making the arbitration order on the assumption that he had jurisdiction to do so.
In July 2009, some of defendants' former clients, the McCall class, declined to arbitrate the matter by State Bar arbitration through the Los Angeles County Bar's Dispute Resolution Services. On August 25, 2009, Judge Mohr entered what he termed a "final order" regarding attorney fees. Judge Mohr's August 25, 2009 order states: the October 17, 2008 order awarded $380,000 in attorney fees; the October 17, 2008 order provides the defendants in the class action, Labor Rate, Inc. and Labor Ready Southwest, Inc., were not required to pay any additional attorney fees for the McCall subclass; the October 17, 2008 "Final Order" for the McCall subclass did not resolve the attorney feeclaims for defendants; the December 11, 2008 order awarded Mr. Quisenberry $12,000 in costs; and the December 11, 2008 order denied any cost award to defendants. The defendants in the...
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