Opinion Has An Interesting Discussion Of Whether A Suspended Or Disbarred Attorney Can Obtain Assignment Of A Judgment, With The Attorney Structuring The Assignment Correctly.
In Children Solution, LLC v. Altman (Mastroianni), Case No. B317816 (2d Dist., Div. 1 Oct. 31, 2023) (unpublished), plaintiffs lost to defendants in a bench trial, with the defense receiving a $500,000 prevailing party fee award against the non-victorious plaintiffs. Plaintiffs then sued their trial counsel for malpractice, reaching a $250,000 settlement which was approved by the lower court. The defense subsequently assigned $345,000 of their $500k fee award to their counsel (who was suspended and disbarred, ultimately), and that counsel filed a notice of judgment lien in the malpractice action. In approving the settlement, the lower court agreed that plaintiffs’ counsel in the malpractice case should be paid $113,500 of the $250,000 pursuant to a contractual attorney’s lien, but it denied paying the remaining balance to defense counsel holding an assignment of the partial prevailing party fee award.
The 2/1 DCA found the lower court properly approved the settlement and allocated money to plaintiffs’ malpractice counsel. It did, however, reverse denying payment of the remaining malpractice settlement monies to the suspended/disbarred attorney representing defendants in the first action.
Before turning to the merits, the 2/1 DCA had to confront whether suspended/disbarred attorney could pursue the appeal in the face of the prohibition in Business and Professions Code section 6130, which provides: “No person, who has been an attorney shall while a judgment of disbarment or suspension is in force appear on his own behalf as plaintiff in the prosecution of any action where the subject of the action has been assigned to him subsequent to the entry of the judgment or disbarment or suspension and solely for purpose of collection.” Attorney could pursue the appeal because the partial fee award was an absolute ownership assignment, not just for collection only, so that it shows this assignment was structured correctly.
Because an attorney’s contractual charging lien has priority over a judgment creditor’s lien, there was nothing wrong about that component of the lower court’s settlement approval/allocation order. Nevertheless, the remaining $136,500 of the malpractice action settlement was ordered to be paid to the disbarred attorney: no equities demonstrated that payment should have been withheld. (Code Civ. Proc., § 708.440(b) [authorizing approval of a settlement agreement on “such terms and conditions as the court deems necessary”].)
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