Trope v. Katz, S043227

CourtUnited States State Supreme Court (California)
Citation902 P.2d 259,11 Cal.4th 274,45 Cal.Rptr.2d 241
Decision Date02 October 1995
Docket NumberNo. S043227,S043227
Parties, 902 P.2d 259, 95 Cal. Daily Op. Serv. 7738, 95 Daily Journal D.A.R. 13,193 Sorrell TROPE et al., Plaintiffs and Appellants, v. Bertram Bernard KATZ, Defendant and Respondent.

Trope & Trope and Thomas Paine Dunlap, Los Angeles, for plaintiffs and appellants.

Lorraine C. Gollub, Culver City, Gordon Law Offices, Frieda Gordon, Beverly Hills, Hill, Farrer & Burrill, and Steven W. Bacon, Los Angeles, as amici curiae on behalf of plaintiffs and appellants.

Hart & Watters and Thomas L. Watters, Los Angeles, for defendant and respondent.

Adrian Van Rijs, Tarzana, as amicus curiae on behalf of defendant and respondent.

MOSK, Justice.

In this appeal we consider whether an attorney who chooses to litigate in propria persona rather than retain another attorney to represent him in an action to enforce a contract containing an attorney fee provision can nevertheless recover "reasonable attorney's fees" under Civil Code section 1717 (hereafter section 1717) as compensation for the time and effort expended and the professional business opportunities lost as a result. We shall conclude that such an attorney litigant cannot recover such fees under section 1717, and hence that the judgment of the Court of Appeal so holding must be affirmed. Were we to construe the statute otherwise, we would in effect create two separate classes of pro se litigants--those who are attorneys and those who are not--and grant different rights and remedies to each. We find no support for such disparate treatment either in the language of section 1717, in the legislative policy underlying it, or in fairness and logic.


In November 1985 defendant Bertram Bernard Katz retained the law firm of Trope & Trope to represent him in a marital dissolution proceeding. Their written agreement provided that "In the event it becomes necessary to file an action to recover the fees and costs set forth in this agreement, the Court may award reasonable attorneys' fees for the recovery of said fees and costs." When Trope & Trope withdrew as counsel in February 1989 it carried an account receivable for services and advances in the amount of some $163,000 that Katz refused to pay. In December 1989 Trope & Trope, representing itself, sued Katz for breach of contract to recover the unpaid fees. Katz answered that the fees were excessive and filed a cross-complaint for damages for legal malpractice. A jury returned a verdict for $163,000 in favor of Trope & Trope on the complaint, but also found in favor of Katz on the cross-complaint and awarded him $118,500 in damages.

Following entry of judgment Trope & Trope moved for an award of attorney fees in the amount of some $223,000 under the attorney fee provision of the contract. Katz opposed the motion on the ground, inter alia, that Trope & Trope could not recover attorney fees because it had represented itself throughout the litigation. The court referred the motion to a referee, who concluded that although Trope & Trope would have been entitled to attorney fees under the 1985 agreement if it had retained an attorney, it was barred from recovering such fees because it had represented itself. The referee also recommended that prejudgment interest be calculated on the basis of the net judgment in Trope & Trope's favor. The trial court adopted the referee's recommendations in their entirety over Trope & Trope's objection.

Trope & Trope contended on appeal that the denial of its motion for attorney fees and the limitation on the award of prejudgment interest were error. The Court of Appeal rejected both contentions and affirmed. Trope & Trope sought review of both issues, but in granting its petition we limited review to whether an attorney who successfully represents himself in litigation may recover attorney fees when such fees are provided for by contract or statute.


California follows what is commonly referred to as the American rule, which provides that each party to a lawsuit must ordinarily pay his own attorney fees. (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504, 198 Cal.Rptr. 551, 674 P.2d 253; United Services Auto. Assn. v. Dalrymple (1991) 232 Cal.App.3d 182, 187, 283 Cal.Rptr. 330. The Legislature codified the American rule in 1872 when it enacted Code of Civil Procedure section 1021, which states in pertinent part that "Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; ..." (See, e.g., Bruno v. Bell (1979) 91 Cal.App.3d 776, 781, 154 Cal.Rptr. 435 [American rule codified by Code Civ.Proc., § 1021].) The Legislature has since enacted several statutory exceptions to the American rule, and we have relied on our "inherent equitable authority" to develop three additional exceptions--the common fund, substantial benefit, and private attorney general theories of recovery. (See Gray v. Don Miller & Associates, Inc., supra, 35 Cal.3d 498, 505, 198 Cal.Rptr. 551, 674 P.2d 253; Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 906, 160 Cal.Rptr. 124, 603 P.2d 41 (Consumers Lobby ); Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303; see generally Cal.Attorney Fee Awards (Cont.Ed.Bar 2d ed. 1994) ch. 7.)

Here, however, we are not concerned either with a statutory exception to the American rule or with an equitable theory of recovery. Rather, we address the third scenario in which the American rule does not apply--i.e., when there is an "agreement, express or implied, of the parties" that allocates attorney fees. Although Code of Civil Procedure section 1021 gives individuals a rather broad right to "contract out" of the American rule by executing such an agreement, these arrangements are subject to the restrictions and conditions of section 1717 in cases to which that provision applies. (See Palmer v. Shawback (1993) 17 Cal.App.4th 296, 299-300, 21 Cal.Rptr.2d 575; Lerner v. Ward (1993) 13 Cal.App.4th 155, 159-161, 16 Cal.Rptr.2d 486; Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1341-1342, 5 Cal.Rptr.2d 154; see also Hsu v. Abbara (1995) 9 Cal.4th 863, 868, fn. 3, 39 Cal.Rptr.2d 824, 891 P.2d 804; see generally Cal. Attorney Fee Awards, op. cit. supra, ch. 6.) It is undisputed that section 1717 governs the case now before us.

Section 1717, subdivision (a), provides in pertinent part that "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." The issue presented by this case is whether an attorney who chooses to represent himself--and therefore does not pay or become liable to pay any sum out of pocket for such representation--can nevertheless recover "reasonable attorney's fees" under section 1717 as compensation for the time and effort expended and the professional business opportunities lost as a result.

Our resolution of this issue turns on how we construe section 1717, and particularly on how we define the words "reasonable attorney's fees" in subdivision (a) of that statute. We begin as always "with the fundamental premise that the objective of statutory interpretation is to ascertain and effectuate legislative intent." (Burden v. Snowden (1992) 2 Cal.4th 556, 562, 7 Cal.Rptr.2d 531, 828 P.2d 672.) To discover that intent we first look to the words of the statute, giving them their usual and ordinary meaning. (Granberry v. Islay Investments (1995) 9 Cal.4th 738, 744, 38 Cal.Rptr.2d 650, 889 P.2d 970; DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 601, 7 Cal.Rptr.2d 238, 828 P.2d 140.) "Where the words of the statute are clear, we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history." (Burden v. Snowden, supra, 2 Cal.4th 556, 562, 7 Cal.Rptr.2d 531, 828 P.2d 672.)

First, by its terms section 1717 applies only to contracts specifically providing that attorney fees "which are incurred to enforce that contract" shall be awarded to one of the parties or to the prevailing party. (Italics added.) To "incur" a fee, of course, is to "become liable" for it (Webster's New Internat.Dict. (3d ed. 1961) p. 1146), i.e., to become obligated to pay it. It follows that an attorney litigating in propria persona cannot be said to "incur" compensation for his time and his lost business opportunities.

Second, Black's Law Dictionary defines the word "fee" generally as "A recompense for an official or professional service or a charge or emolument or compensation for a particular act or service. A fixed charge or perquisite charged as recompense for labor reward, compensation, or wage given to a person for performance of services or something done or to be done." (Black's Law Dict. (6th ed. 1990) p. 614.) It goes on to define the phrase "attorney fees" as a "Charge to client for services performed (e.g. hourly fee, flat fee, contingency fee)." (Ibid.) Similarly, Webster's defines the word "fee" as "compensation often in the form of a fixed charge for professional service or for special and requested exercise of talent or of skill." (Webster's New Internat.Dict., supra, p. 833; see also 5 Oxford English Dict. (2d ed. 1989) p. 797 ["fee" denotes "a payment," such as the "remuneration paid or due to a lawyer, a physician, or (in recent use) any professional man, a director of a public company, etc. for an occasional service"].) Accordingly, the usual and ordinary meaning of the words "attorney's...

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