Attorney Was Liable For Substantial Elder Abuse Fees To Prevailing Elderly Client Based On Failing To Properly Offset And Return Money To Client.
Koehler v. Prinz, Case No. C095229 (3d Dist. Sept. 25, 2023) (unpublished) is a case which shows that attorneys need to be careful when they receive a fee award which belongs to them, discussing the fee award with the client and then agreeing on an offset for contingency fees already received.
In this one, attorney represented an elderly client and later her son in an HOA water intrusion case, receiving a compensatory settlement from HOA/property manager from which he took an agreed contingency fee of $109,374. Attorney successfully defeated HOA’s cross-complaint which resulted in a Davis-Stirling Act fee/costs award of $412,075.94, which he retained and used to pay personal expenses. That brought a dispute between attorney and clients on who owned the fee award and whether a credit should have been made for the $109,374 contingency fee previously received by attorney. The lower court agreed that the fee award belonged to the attorney, but clients were entitled to an offset for the prior contingency received by attorney. Elderly client won her financial elder abuse claim against attorney based on these facts, with the lower court awarding her about $167,500 in fees and costs under the financial elder abuse fee-shifting provision.
The Third District affirmed. Based on the retainer fee language and conduct of the parties, the appellate court concluded the HOA fee award did belong to the attorney, citing analogous cases in the FEHA, private attorney general, Labor Code, and trade secrets areas. However, it also agreed that attorney had to make a reimbursement of the prior contingency fee award already paid—which was not done, constituting an ethical violation and financial elder abuse given work on the complaint and cross-complaint were inextricably intertwined. The wrongful retention of the entire fee award supported the financial elder abuse fee award.
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