Malpractice/Ethical Claims Subject Of Separate Suit Did Not Impede Fee Recovery To Interpleading Attorneys.
In Feldsott & Lee v. Jones, Case No. B262710 (2d Dist., Div. 8 Sept. 6, 2016) (unpublished), attorneys won an HOA arbitration for two homeowner clients, and then reached a settlement to decide the attorney’s fees and costs to be paid by HOA to prevailing clients. However, one of the homeowners disputed the amount of the settlement proceeds to be released to the winning attorneys. The attorneys interpled the disputed funds, and the one homeowner tried to cross-claim but dismissed the cross-complaint after the trial court sustained a demurrer. Homeowner then filed a separate suit alleging malpractice/ethical violations by the attorneys. The lower court in the interpleader case granted attorneys fees/costs $9,655 under CCP § 386.6 after granting a discharge order.
The fee award was affirmed on appeal. Attorneys properly followed interpleader procedures given the settlement proceeds fee dispute; with that, fees and costs were authorized under section 386.6. Although homeowner argued no fees can be awarded where there are egregious ethical violations, the reviewing court observed it was not proper to adjudge these torts in the interpleader such that homeowner preserved her rights to challenge on that basis in the ongoing separate suit.
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