Extraordinary Circumstances Justified Noncompliance With Deadlines, And Client/Attorney Agreement On How To Divide Statutory Fee Awards Did Not Violate Any Ethical Prohibitions.
Blythe v. County of Riverside, Case No. E055186 (4th Dist., Div. 2 July 16, 2014) (unpublished) is a wild FEHA fee/costs award case encompassing deadline, standing, and retainer agreement divisions of a diverse nature.
Briefly told (and we will try), prevailing FEHA plaintiffs—one getting a $65,760.54 compensatory award and another getting another $100,680.73 in damages--sought fees and costs against County after a prior client attorney abandoned the case and required a new firm to investigate as well as file the fee motion almost two years down the line (way after the CRC 3.1702(b)(1) general appeal-geared deadlines). All kinds of issues were raised in opposition, but the lower court eventually awarded plaintiffs $542,142.50 in FEHA fees and $10,642.50 in “fees on fees” (fees to present the fees motion).
This result was affirmed on appeal, with one small modification of $10,642.50 to prevent a “double dip.”
County was miffed that the fee motion was filed almost two years later, but the record showed extraordinary circumstances justifying CCP § 473 relief—sealed documents showed that the prime attorney originally representing the plaintiffs abandoned the case post judgment, admitting positive misconduct, and that a new law firm had to do a lot of investigation to get at the bottom of things/file the fee petition.
Good enough under unusual circumstances to get beyond the timeliness objection.
However, beyond the contingency arrangement between clients and attorney in the retainer agreement as far as judgment proceeds, a certain percentage division allocation was reached as to what percentage went to client and what percentage went to attorneys should a statutory fee award occur, resulting in more challenges on appeal by County.
Given this contingency arrangement, plaintiffs had standing to recoup their share of fees despite abandonment by the attorneys. The majority found that reasonable FEHA fees could always be sought by clients notwithstanding what was said in the retention agreement. A concurring justice found both parties and counsel under a fee allocation arrangement had standing to seek recovery of fees.
County’s argument that the attorney abandonment worked a divestiture of fees was soundly rejected; after all, why should the client be penalized for attorney conduct beyond client’s control.
That left the challenge that the statutory fee division in the retainer agreement between client and attorney somehow violated ethical prohibitions. Nope, because this is unlike referral or fee splitting agreements—this one was actually between the clients
and attorneys. (Los Angeles County Bar Association Prof. Responsibility & Ethics Comm. Ethics Opn. No. 523 (Dec. 2009).) Just as clients can divide judgment proceeds splits as far as contingency fees and can offset fees against contingency awards (or not do so), nothing prevented a client-attorney division of statutory fee awards.