The Trial Court Properly Awarded The Fees Pursuant to Civil Code Section 1717 Based On Provisions In The Escrow Agreement Drafted By Attorney/Law Firm Even Though That Agreement Was Determined By The Trial Court To Be Invalid.
The 2/8 DCA described this next case as being “prompted by a sordid chain of events,” and we couldn’t agree more.
Plaintiff in Revell v. Burlison Law Group, Case No. B289582 (2d Dist., Div. 8 March 13, 2020) (unpublished) is a vulnerable and impoverished paraplegic who is confined to a wheel chair due to a previous car accident. Her mother and uncle were the primary beneficiaries, in equal shares, to her late grandmother’s trust – which included a Buena Park property. Plaintiff was unaware of the existence of her grandmother’s trust, but knew that her mother had some interest in the Buena Park property.
When Plaintiff’s mother passed away, she – as sole heir to her mother’s estate – sought assistance in locating any assets in her mother’s name and in preparing documents to claim death benefits from her mother’s pension plan, and ended up signing a power of attorney with Free-Lance “Paralegal,” Bret Lovett to act on her behalf. Lovett had a working relationship with attorney Robert C. Burlison, Jr. and his law firm Burlison Law Group, and also shared office space with the attorney/law firm.
About a month after signing the POA, Plaintiff notified Lovett by phone that she was revoking the POA. She then obtained the benefits she sought from her mother’s pension plan by contacting the plan directly. Meanwhile, Lovett had learned of the Buena Park property, and – through misleading and forged letters – caused Plaintiff’s uncle to sell the property and deliver the $114,646.01 in proceeds to one of Lovett’s companies. Lovett then got Burlison to create an escrow account to hold the funds. The escrow agreement drafted by Burlison was signed by Burlison and Lovett – using the revoked POA. After the $114,646.01 was transferred to the escrow account, Burlison disbursed $96,474.32 to Lovett and $1,146.46 to the Burlison Law Firm. These disbursements were not authorized by Plaintiff, and left a balance of only $17,025.23 of Plaintiff’s inheritance funds in the so-called escrow account.
When Plaintiff learned from her uncle that proceeds meant for her had been sent to Lovett, she demanded an accounting and disbursement of her funds. Burlison/Burlison Law Group refused to disburse the remaining funds to Plaintiff unless she signed a release for the prior distributions – forcing her to sue to recoup her inheritance.
The trial court found that Lovett and Burlison/Burlison Law Group had acted in concert to convert Plaintiff’s inheritance funds for the sole benefit of Lovett, and had each breached their fiduciary duty to Plaintiff. Plaintiff was awarded $114,646.01 in compensatory damages, $229,292.02 in double damages, and $172,885 in section 1717 contractual attorneys’ fees – jointly and severally against Lovett, Burlison and Burlison Law Group – although the trial court had also determined the escrow agreement to be invalid. Burlison and Burlison Law Group appealed.
The 2/8 DCA affirmed the trial court’s ruling, but found the Statement of Decision and Judgment ambiguous as to whether the trial court found that Burlison and Burlison Law Group acted in bad faith for the purposes of determining liability for double damages under Probate Code section 4231.5. The case was remanded as to this issue only – to allow the trial court to supplement its statement of decision as to whether Burlison/Burlison Law Group acted in bad faith.
In finding the trial court had properly issued attorneys’ fees pursuant to section 1717, based on the attorney fee provision contained in the escrow agreement, and despite its finding that the escrow agreement was invalid, the 2/8 DCA cited PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094-1095 [no. 1 on our list of leading cases], which provides the factors to be considered in setting a reasonable award to a prevailing party – even if the prevailing party is successful in proving that the underlying contract is inapplicable, invalid, unenforceable or nonexistent. Santisas v. Goodin (1998) 17 Cal.4th 599, 611 [no. 6 on our list of leading cases].
BLOG NOTE: For those of you who are curious to know more about the paralegal and attorney defendants in this case, the L.A. Times published an article on November 2, 2017 stating both had been arrested for involvement in a $1.2 million fraud scheme. Also, according to the California State Bar website, Burlison was disbarred as of August 10, 2019.
Thank you for sharing! Great article.
Posted by: Yesi Merino | April 02, 2020 at 10:42 AM