Sayble v. Feinman

• Decision Date: 04 January 1978
• Citation: 76 Cal.App.3d 509,142 Cal.Rptr. 895
• Court: California Court of Appeals Court of Appeals
• Parties: Hill SAYBLE and Sayble and Raphael, a Professional Corporation, Plaintiffs and Appellants, v. Frances FEINMAN, Defendant and Respondent. Civ. 50732.

Page 895

142 Cal.Rptr. 895

76 Cal.App.3d 509

Hill SAYBLE and Sayble and Raphael, a Professional Corporation, Plaintiffs and Appellants, v. Frances FEINMAN, Defendant and Respondent.

Civ. 50732.

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

Jan. 4, 1978.

Hearing Denied March 2, 1978.

Memel, Jacobs, Pierno & Gersh, by Stanley K. Jacobs, Los Angeles, for plaintiffs and appellants.

Tannenbaum, Neiman & Billet by Paul L. Stanton, Los Angeles, for defendant and respondent.

BEACH, Associate Justice.

Hill Sayble and Sayble and Raphael, a professional corporation, appeal from a judgment in favor of Frances Feinman construing the terms of payment in a contingent fee retainer agreement between appellant attorneys and respondent client.

FACTS :

Respondent Frances Feinman retained appellant attorneys to represent her claims arising out of the wrongful death of her husband. The parties entered into an attorney retainer agreement drafted by appellants. The contract provides in relevant part: "Attorney(s) shall be paid 281/3% of any money recovered in this matter . . .." (Emphasis added.)

Appellants and respondent agree that at the time of the making of the contract, neither party contemplated a settlement other than a lump sum of cash. Appellants achieved an out-of-court settlement for respondent with a cash payment of $200,000, plus an annuity of $2,500 per month for her lifetime. Respondent's life expectancy at the time of settlement was 46.7 years.

Prior to the acceptance of the settlement in the wrongful death action, a dispute arose between the parties as to the amount and method of payment of attorneys' fees. Appellants contend that they were entitled immediately to their entire fee as a lump sum of 281/3 percent of the $200,000 paid to respondent in cash plus 281/3 percent of the present cash value of the annuity portion of the settlement. Respondent agreed that appellants were entitled to 281/3 percent of the $200,000; but she maintained they were entitled to 281/3 percent of the annuity only as she received the funds in each monthly installment.

Pursuant to respondent's authorization and direction, the settlement of the original action was consummated without the resolution of the dispute. The parties were subsequently unable to resolve their dispute, and appellants commenced a declaratory relief action seeking the court's interpretation of the retainer contract and a declaration of the rights and duties of the parties under that agreement. The trial was bifurcated to permit the court to construe the retainer agreement as a matter of law without the presentation of evidence. The matter was submitted on the facts admitted by the pleadings and the stipulation of facts.

The court entered judgment in favor of respondent's interpretation of the contract and concluded as a matter of law that appellants were entitled to be paid 281/3 percent of the settlement funds received to date by respondent, plus 281/3 percent of each monthly payment of the life annuity portion of the settlement, as and when received by her and not before. This appeal followed.

CONTENTIONS ON APPEAL :

1. The trial court's findings and decision are not binding on the question of law presented.

2. The trial court misconstrued how the contingent fee retainer contract is to be applied to the annuity portion of the wrongful death settlement. Appellants contend that they have earned all their fees and are now entitled to receive 281/3 percent of the present cash value of the annuity portion of the settlement in addition to the 281/3 percent of all funds received to date.

DISCUSSION :

1. The findings of the lower court are not binding on the question of law presented.

The construction of a written contract is essentially a judicial function to be exercised according to generally accepted canons of interpretation. A reviewing court is free to adopt its own construction of a contractual clause on attorneys' fees resolving any uncertainties in favor of a fair and reasonable interpretation. (Ecco-Phoenix Electric Corp. v. Howard J. White, Inc., 1 Cal.3d 266, 272, 81 Cal.Rptr. 849, 461 P.2d 33.) But an appellate court must determine that the trial court's interpretation of a written contract is erroneous before it may properly reverse a judgment. (Parsons v. Bristol Development Co., 62 Cal.2d 861, 866, 44 Cal.Rptr. 767, 402 P.2d 839.)

2. The court below properly interpreted the phrase "any money recovered" as it applies to respondent's life annuity.

Here we are called upon to construe a provision of an attorney's contingent fee employment contract. The parties stipulated that when the contract was made, neither one considered a settlement other than by a lump sum of cash. Neither party contends that the contract is ambiguous or that it has been modified.

Nevertheless, appellants contend that unforeseen contingencies, such as the life annuity portion of respondent's settlement, are to be handled in light of the purpose of the contract and the mutual intentions of the parties at the time the contract was made. Appellants argue that their expectations resulting from such a "mutual intention" entitled them to receive immediately 281/3 percent of the discounted present cash value of respondent's life annuity once the settlement became final. They argue that the trial court's interpretation of the retainer agreement was clearly erroneous and contrary to basic contract law in holding that they are entitled only to 281/3 percent of the monthly payments as and when paid to respondent and not before. For the reasons that follow, we disagree with appellants and affirm the trial court's judgment.

The general rules pertaining to the interpretation of contracts have been succinctly summarized elsewhere (see Moss Dev. Co. v. Geary, 41 Cal.App.3d 1, 9, 115 Cal.Rptr. 736) and need not be repeated here. Whether the meaning of the phrase "281/3% of any money recovered" is clear and precise or is ambiguous and uncertain does not alter the result in the case at bench. If the meaning is clear, the language of the contract will be followed. (Civ.Code, § 1638.) Moreover, where one construction would make a contract unusual and extraordinary and another construction, equally consistent with the language employed, would make it reasonable, fair, and just, the latter construction must prevail. (Rost v. Bryson, 118 Cal.App.2d 489, 258 P.2d 72.)

We look to the contract itself and interpret it so as to give effect to the intent of the parties. (Civ.Code, §§ 1639, 1643; Advance Medical Diagnostic Laboratories v. County of Los Angeles, 58 Cal.App.3d 263, 269, 129 Cal.Rptr. 723.) But the parties herein stipulated that when the contract was made, they contemplated only a lump sum settlement. Consequently, it is uncertain what would have been the reasonable intentions of the parties had they anticipated that part of the settlement would be a life annuity. In such circumstances, the words of the contract are to be understood in their ordinary and popular sense, rather than in their strict legal meaning unless there is evidence the parties intended to use them in a technical sense or to give them a special meaning. (Civ.Code, § 1644; Berman v. Dean Witter & Co., Inc., 44 Cal.App.3d 999, 119 Cal.Rptr. 130.)

"Money," in the ordinary and popular sense, means something generally accepted as a circulating medium of exchange issued under governmental authority. ¹ Appellants' stipulation...