Trope Prohibition Not in Play Because Suing Attorneys Used Independent Contractors, Not Associates, to Prosecute Case.
The opinion in Rothman v. Deshay, Case No. B245075 (2d Dist., Div. 4 May 13, 2014) (unpublished) gives guidance on how attorneys prosecuting or defending themselves in litigation can use other attorneys and avoid the Trope prohibition (namely, that suing attorneys representing themselves or using attorneys with an interest in recovery cannot collect section 1717 fees).
In this one, former attorney sued a real estate-oriented business client, winning a Mandatory Fee Arbitration Act (MFAA) arbitration which resulted in an award of $82,500. Losing client then failed to properly reject the award in time, which led to the superior court confirming the award and then awarding winning former attorney fees of $45,000 (out of a requested $61,406.25) under Business and Professions Code section 6203(c) [a fee entitlement statute for confirming an MFAA award] and $11,350 (out of a requested $18,937.50) under Civil Code section 1717 [based on a fees clause in the retainer agreement].
Losing client did not gain any relief on appeal. Fee entitlement was clear, and client could not surmount the deferential abuse of discretion standard relating to the amount of the fee award.
However, client did argue that former attorney was disqualified from obtaining fees under Trope because he used associates in his firm to handle various aspects of the litigation. The appellate court rejected this argument, indicating the issue comes down to whether employees/associates of former attorney or independent contractors having no interest in the former attorney’s recovery were utilized. Here, the proof showed independent contractors were used, so no Trope prohibition was involved. (Mix v. Tumanjan Development Corp., 102 Cal.App.4th 1318, 1325 (2002).)
For further discussion of the arbitration “takeaways” in the opinion, see the March 14, 2014 blawg post on California Mediation and Arbitration.
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