Part 2 of 2—Fourth District Divisions Are Split on the Issue.
In Part 1 of 2 of our discussion on minor’s compromise (see August 10, 2008 post), we explored the statutory grant in Probate Code section 3601 regarding approval of attorney’s fees in minor’s compromise proceedings, augmented by a look at certain superior court local rules and unpublished appellate decisions construing some of the local rules. Now, we explore the second topic flagged in our August 10, 2008 post.
Frequently in minor’s compromise cases, there are successive or multiple attorneys involved depending on the progress of reaching a resolution or the difficulty of the personal injury issues. Once a settlement is reached, there can be disagreements between the attorneys and minor’s guardian ad litem about what percentage of fees should be recovered by each attorney. Can these disputes be resolved in the Probate Code section 3601 proceeding or must an independent action be commenced to break the impasse? We explore the jurisprudence on this particular question, although the reality is that there is a split of appellate thinking on the answer to the inquiry.
In Goldberg v. Superior Court, 23 Cal.App.4th 1378, 1382 (1994), the Fourth District, Division One issued mandate vacating a lower court’s determination about the reasonable value of a chiropractor’s fees in a minor’s compromise case in a section 3601 proceeding. Division One interpreted section 3601 as allowing the trial court to determine and authorize payment of reasonable expenses to the chiropractor, but that the court did not have jurisdiction to determine the reasonable value of the practitioner’s services—this had to be determined in a separate action.
Goldberg was followed one year later in Law Offices of Stanley J. Bell v. Shine, Browne & Diamond, 36 Cal.App.4th 1011, 1020-1021 (1995). Bell did involve a dispute between successive attorneys and client over how their respective fees would be divided from the ultimate settlement fund. The Court of Appeal found that a probate court in a section 3601 proceeding did not have jurisdiction over any fee dispute between two attorneys quarreling over the division of the fee or over any dispute between guardian ad litem and an attorney about what fees were reasonably awarded.
The Fourth District, Division Two, in Curtis v. Fagan, 82 Cal.App.4th 270, 276-280 (2000), parted company from the approach adopted in Goldberg and Bell. In a comprehensive survey of section 3601 and earlier decisions, Acting Presiding Justice Hollenhorst (on behalf of a 3-0 panel) determined the earlier decisions had ignored the unambiguous language of section 3601, a provision that allowed expressly for the determination of competing liens for reimbursement of expenses, costs or fees. “When presented with claims by more than one attorney in [a section 3601] action, each contending that he or she provided services at the direction of the minor’s guardian, the trial court must decide the validity of each claim. In doing so, it may consider the evidence presented and determine a reasonable amount to be paid to each attorney. The attorneys are not required to file an independent action against the minor’s guardian in order to obtain such determination. To require the filing of such independent action misinterprets the language in section 3601, subdivision (a), and leads to an absurd result. That is precisely what Goldberg and Bell did, and why we decline to follow those opinions.” (Id. at 279.)
The Fourth District, Division Three weighed in on this appellate split, a little more than a year later, in Padilla v. McClellan, 93 Cal.App.4th 1100 (2001). There, a second attorney who helped consummate the settlement in a minor’s compromise proceeding was disappointed when the trial court awarded second attorney 30% of the fees versus 70% of the fees to the first attorney saddled with a substantial amount of early work and discovery in the litigation that eventually produced the settlement. Second attorney appealed as an objector, arguing the lower court lacked jurisdiction under section 3601 to make the rulings that it did. Confronting the split in thinking on the issue between Curtis and the Goldberg/Bell line of cases, Justice Rylaarsdam—the author for a 3-0 panel of Division 3—concurred with the holding in Curtis, “finding it well-reasoned and more persuasive thanBell and its antecedents. For that reason, we decline to follow those earlier decisions. The court had jurisdiction to determine the allocation of fees between claimant [first attorney] and objector [second attorney].” (Id. at 1106.) The trial court in Padilla had conducted an evidentiary hearing, and Division 3 found it was unnecessary to conduct a full-blown trial given that lower courts determine the reasonableness of fees every day by ruling on motions. “On the other hand, filing a separate action potentially engages the minor and the guardian in another lawsuit, delays resolution of the issue, and wastes everyone’s resources.” (Id. at 1107.)
BLOG BONUS COVERAGE—The Curtis court, however, did reverse the fee award because the claiming attorney did not apportion his work between a fellow car passenger and the injured minor. The appellate court remanded for an apportionment of the joint work to each client. (Curtis, supra, 82 Cal.App.4th at 280.) This result is in harmony with Fresno County Superior Court Local Rule 2.8.4.D, which requires that injured parents claiming reimbursement of medical and other expenses must pay their proportionate share of attorney’s fees (separate from the minor) except in cases of hardship.