Fee-Sharing Agreement: Defendant Clients Not Entitled To Attorney's Fees Where No Fee Entitlement in Fee-Sharing Agreement

Fourth District, Division 3 Finds Fees Clause in Contingency Agreement Was Inconsequential.

     Earlier, in our September 21, 2008 post, we reported on Strong v. Beydoun, 166 Cal.App.4^th 1398 (2008), where defendant clients owed no unjust enrichment recovery to an attorney who failed to obtain clients' signatures to a fee-sharing agreement with clients' other counsel. The fee-sharing agreement was unenforceable because clients did not sign it and suing attorney was barred from recovering any form of compensation from them.

     We now have the follow-up proceedings. After having won, prevailing defendants moved for attorney's fees, claiming they were prevailing parties under the contingent fee agreement containing a fees clause. The request was denied by the trial court. Clients appealed, and fared no better.

     The Fourth District, Division 3 in Strong v. Beydoun, Case No. G040238 (4^th Dist., Div. 3 Apr. 22, 2009) (unpublished) affirmed the fee denial. Presiding Justice Sills, on behalf of a 3-0 panel, found there was no fee clause, implied or otherwise, in the fee-shifting agreement that would give defendants a basis for fee recovery. The contingency fee agreement was immaterial, because losing attorney had sued under an unjust enrichment theory instead. The reciprocity principle of Civil Code section 1717 did not kick in because attorney would have been entitled to fee recovery in any event.