Third District Finds No Remedy Available Against Other Attorney and Applies Litigation Privilege in Sustaining Defense Judgment.
In a decision just recently certified for publication, the Third District affirmed a defense judgment in a case involving a dispute between two attorneys over the division of fees in a personal injury action that settled. The decision is Olsen v. Harbison, Case No. C058943 (3d Dist. Dec. 28, 2010) (certified for publication) and has an interesting discussion of the remedies available to a discharged attorney under a fee sharing agreement consented to by the client.
Client hired plaintiff as her attorney, and plaintiff in turn associated in defendant as counsel. The attorneys reached a fee division agreement, which was approved by client pursuant to California Rules of Professional Conduct rule 2-200. Client soon fired defendant, and her personal injury case settled for $775,000. Plaintiff did not receive any fees, suing defendant attorney for quantum meruit, breach of contract, fraud, intentional interference, breach of fiduciary duty, declaratory relief, and constructive trust/unjust enrichment. After plaintiff abandoned some theories and following a series of rulings in the litigation, the trial court entered judgment in favor of defendant, which led to plaintiff’s appeal. Here is how it panned out:
The judgment was affirmed across the board.
Quantum Meruit. Because client’s consent to the fee division was obtained, there was no basis to obtain quantum meruit recovery against the other attorney. Had the client not consented, plaintiff could have sued defendant, but that was not the case. The quantum meruit recovery had to be obtained through a suit against the client.
Fraud/Intentional Interference. The litigation privilege of Civil Code section 47 barred these claims because the predicate statements were made while attempting to bring in experienced counsel--”[r]emarks made in a setting like this can only be deemed connected to the litigation and subject to the litigation privilege.”
Breach of Contract. This one failed because the fee-sharing agreement was extinguished upon plaintiff’s discharge by the client. Once the plaintiff-client contract ceased to exist, the fee-sharing agreement between plaintiff-defendant also ceased to exist. “As the trial court and we have reiterated, the only remedy available to plaintiff was to seek quantum meruit recovery against [client].”
Unjust Enrichment/Constructive Trust. Because these were really remedies, the failure of the prior substantive claims was fatal given that no claims were reinstated so that the remedies could attach to something.
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