Siciliano v. Fireman's Fund Ins. Co.

• Decision Date: 17 September 1976
• Citation: 133 Cal.Rptr. 376,62 Cal.App.3d 745
• Court: California Court of Appeals Court of Appeals
• Parties: John H. SICILIANO, Plaintiff and Appellant, v. FIREMAN'S FUND INSURANCE COMPANY, a corporation, Fireman's Fund American Insurance Companies, a corporation, Defendants and Respondents. Civ. 48216.

Page 376

133 Cal.Rptr. 376

62 Cal.App.3d 745

John H. SICILIANO, Plaintiff and Appellant, v. FIREMAN'S FUND INSURANCE COMPANY, a corporation, Fireman's Fund American Insurance Companies, a corporation, Defendants and Respondents.

Civ. 48216.

Court of Appeal, Second District, Division 1, California.

Sept. 17, 1976.

Michael Korn, Sherman Oaks, for plaintiff and appellant.

Haight, Dickson, Brown, Bonesteel & Rigg, Roy G. Weatherup, Los Angeles, and Robert P. Khoury, San Francisco, for defendant and respondent Fireman's Fund Ins. Co.

No appearance for defendant and respondent Fireman's Fund American Ins. Companies.

LILLIE, Associate Justice.

The first three causes of action of plaintiff's first amended complaint were against only Edward Lyons who apparently remains a party defendant to the lawsuit; the fourth, fifth and sixth causes of action are against Fireman's Fund Insurance Company (hereinafter referred to as Insurer) alone. Insurer's demurrer on the ground the pleading 'fails to state a cause of action against' it, was sustained without leave to amend. An order of 'partial' dismissal was entered from which plaintiff appeals. ¹

Common to each of the three causes of action against Insurer are the following allegations: about October 1, 1971, defendant Lyons retained plaintiff attorney to represent him in connection with a claim for personal injuries arising out of an accident involving Merle Karbeling on September 15, 1971. The retainer agreement was in writing (copy attached to amended complaint) and provided for a contingent fee plus express creation of a lien in favor of plaintiff counsel on any moneys collected arising out of Lyon's claim from said accident. Plaintiff performed all conditions required under the written agreement except as his performance has been rendered futile and impossible by Lyons' actions. About December 1, 1972, Lyons discharged plaintiff as his attorney without cause and proceeded In propria persona in the action on the claim entitled Lyons v. Karbeling, No. WE C 26422, which plaintiff filed in the Los Angeles Superior Court. (The files in that case contained a substitution of counsel filed December 26, 1972, substituting Edward Lyons 'in pro per' as attorney of record in place and stead of John Siciliano.) About December 19, 1972, plaintiff Siciliano notified Insurer (Karbeling's insurance carrier) of the lien which he had under the retainer contract. On information and belief, plaintiff alleged that in August of 1974 Insurer, with knowledge of plaintiff's lien, paid to Edward Lyons the sum of $10,000 in settlement of Lyons' claim arising out of the accident of September 15, 1971, involving Merle Karbeling, Insurer's insured.

The fourth cause of action then alleges that an actual controversy has arisen between plaintiff and defendants concerning their respective rights and duties pursuant to the retainer agreement and the lien conferred by Lyons in plaintiff's favor--plaintiff contends that pursuant to the retainer agreement, he had a lien on a cause of action of Lyons and upon settlement and payment of Lyons' claim by Insurer it became obligated to pay plaintiff the sum of $4,000 pursuant to said agreement and lien; defendants deny the foregoing and particularly Insurer denies that any lien was conferred upon plaintiff by virtue of the execution of the retainer agreement.

The fifth cause of action, following incorporation of the common allegations, alleges plaintiff's demand that defendants pay 'the amount set forth in the notice of lien,' and defendants' refusal.

The sixth cause of action following incorporation of the common allegations, alleges: 'By reason thereof, Defendant FIREMAN'S FUND is an involuntary trustee holding the sum of $4,000 in constructive trust for Plaintiff with the duty to pay Plaintiff the amount of said lien.'

'The subject matter of an action and the issues involved are determinable from the facts alleged rather than from the title of the pleading or the character of damage recovery suggested in connection with the prayer for relief. (Citations.)' (Buxbom v. Smith, 23 Cal.2d 535, 542, 145 P.2d 305, 308.) 'It is unnecessary therefore that we determine whether the (pleading) alleges facts sufficient for the declaration of a trust or the imposition of damages. A general demurrer challenges the sufficiency of the pleading to state Any cause of action, and must not be sustained if the pleading states facts from which any liability results, although not for some or all of the relief sought to be obtained. (Citation.) If the pleading states grounds for relief, either legal or equitable, it will stand the test of a general demurrer. (Citation.) It is sufficient if the pleading contains the allegations essential to the statement of any one cause of action, even though an abortive attempt is made to state facts calling for other and different relief.' (Emphasis by Supreme Court.) (California Trust Co. v. Cohn, 214 Cal. 619, 628, 7 P.2d 297, 300; see also Baker Aircraft Sales, Inc. v. Cassel, 200 Cal.App.2d 563, 569, 19 Cal.Rptr. 581; Warren v. Atchison, T. & S.F. Ry. Co., 19 Cal.App.3d 24, 29, 96 Cal.Rptr. 317; 3 Witkin, Cal.Proc.2d ed. (1971), § 20, pp. 1705--1706.) Thus, if the first amended complaint states any right to relief, legal or equitable, it was error to sustain the demurrer of Insurer without leave to amend even if the pleading seeks wrong relief rather than that which would be obtainable under the facts.

Insurer's assertion that none of the three causes of action allege performance of any service by plaintiff attorney, is erroneous. The retainer agreement was made October 1, 1971, and it was not until December 1, 1972, over a year later, that counsel was discharged. The agreement employed plaintiff to prosecute the action or claim for damages by reason of the accident; that in fact such action (Lyons v. Karbeling) was filed appears on the face of the amended complaint. In paragraph 12 of the fourth cause of action (incorporated by reference in the fifth and sixth) plaintiff alleges he 'has performed all conditions required of him under said written Retainer Agreement except as his performance has been rendered futile and impossible by the actions of said Defendant.' No special demurrer was interposed. The allegations are sufficient to allege performance as against a general demurrer.

In Fracasse v. Brent, 6 Cal.3d 784, 100 Cal.Rptr. 385, 494 P.2d 9, the Supreme Court held that an attorney, employed under a contingent fee contract and discharged by the client before occurrence of the contingency, is entitled on occurrence thereof to the reasonable value of his services rendered to the time of his discharge. Holdings in prior decisions that an attorney discharged without cause becomes entitled to the full amount agreed to in the contract, instead of the reasonable value of services rendered, have been overruled. But Fracasse did not abrogate other principles such as expressed in Salopek v Schoemann, 20 Cal.2d 150, 156, 124 P.2d 21, to the effect that an attorney who has been discharged is entitled to enforce his lien to the extent of the reasonable value of services rendered to the date of discharge. (Weiss v. Marcus, 51 Cal.App.3d 590, 598, 124 Cal.Rptr. 297.)

While a contingent fee contract with creation of a lien in favor of counsel does not operate to transfer to counsel any part of the client's cause of action (Fifield Manor v. Finston, 54 Cal.2d 632, 641, 7 Cal.Rptr. 377, 354 P.2d 1073), it does give him a lien upon the recovery (Ibid., p. 641, 7 Cal.Rptr. 377, 354 P.2d 1073), and the attorney is regarded as an equitable assignee of the judgment or settlement to the extent of fees and costs which are due him for services. (Isrin v. Superior Court, 63 Cal.2d 153, 158--159, 45 Cal.Rptr. 320, 324, 403 P.2d 728, 732; see also Tracy v. Ringole, 87 Cal.App. 549, 551, 262 P. 73, quoted in Isrin and referred to as 'one of the leading cases on the subject.')

In Herron v. State Farm Mutual Ins. Co., 56 Cal.2d 202, 14 Cal.Rptr. 294, 363 P.2d 310, a judgment entered on order sustaining demurrer to the complaint without leave to amend was reversed. In a personal injury matter plaintiff attorneys were employed under a contingent contract by Mr. and Mrs. Halverson; defendant insurance company and defendant attorney intentionally induced plaintiffs' clients to discharge plaintiffs as their counsel. The court held that this constituted an intentional interference with plaintiffs' contingent fee contract for which defendant insurer and defendant attorney would be liable in tort. In the case at bench, it is not alleged that Insurer induced Lyons to discharge plaintiff as his counsel. The first amended complaint does allege that shortly after the discharge, plaintiff notified Insurer of his attorney's lien; that later the Insurer, 'with knowledge of Plaintiff's lien,' paid to Lyons $10,000 in settlement of Lyons' personal injury claim against Karbeling, its insured. As against a general demurrer the actual notification given by plaintiff to Insurer of the existence of the lien, and the payment to Lyons by Insurer with knowledge of the attorney's lien sufficiently show a deliberate and intentional interference on Insurer's part with plaintiff's lien and rights under the agreement--an intentional interference with plaintiff's 'prospective economic advantage' under all the circumstances. The tort of interference with contract is held to be 'merely as species of the broader tort of interference with prospective economic advantage.' (Buckaloo v. Johnson, 14 Cal.3d 815, 823, 122 Cal.Rptr. 745, 749, 537 P.2d 865, 869.) Although not a model of pleading, the amended complaint sufficiently alleges an intentional interference by Insurer with the contract lien or the economic advantage therefrom which plaintiff would have gained.

In the fourth cause of action, plaintiff prayed for declaratory relief. Insurer contends that an action for declaratory...