Huskinson & Brown v. Wolf

119 Cal. Rptr. 2d 479, 98 Cal. App. 4th 113
CourtCalifornia Court of Appeal
DecidedJuly 26, 2002
DocketB147298
StatusPublished

This text of 119 Cal. Rptr. 2d 479 (Huskinson & Brown v. Wolf) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Huskinson & Brown v. Wolf, 119 Cal. Rptr. 2d 479, 98 Cal. App. 4th 113 (Cal. Ct. App. 2002).

Opinion

119 Cal.Rptr.2d 479 (2002)
98 Cal.App.4th 113

HUSKINSON & BROWN, LLP, Plaintiff and Respondent,
v.
Mervyn H. WOLF et al., Defendants and Appellants.

No. B147298.

Court of Appeal, Second District, Division Four.

May 2, 2002.
Review Granted July 26, 2002.

*481 Law Offices of Marc Appell and Marc J. Appell, Los Angeles, for Defendants and Appellants.

Huskinson & Brown and Clark McCutchen for Plaintiff and Respondent.

*480 EPSTEIN, J.

Mervyn H. Wolf and the law firm Appell & Wolf (collectively, Wolf) appeal from a judgment in favor of another law firm, Huskinson & Brown, Limited Liability Partnership (Huskinson & Brown). Huskinson & Brown sued Wolf to recover a referral fee from a lawsuit which Huskinson & Brown referred to Wolf. The referral fee was calculated as a portion of Wolfs fees from the referred suit. Although the client in the referred suit did not consent in writing to the fee sharing agreement, as required by Rules of Professional Conduct, rule 2-200 (rule 2-200), the trial court found that Wolf would be unjustly enriched if permitted to keep the portion of the fee it had agreed to pay to Huskinson & Brown. The trial court alternatively allowed recovery of the cost of services rendered and expenses paid by Huskinson & Brown under quantum meruit and a common count for monies owed. Wolf argues that it was error to allow recovery under unjust enrichment or quantum meruit because the client did not consent in writing. We agree and reduce the judgment to the expenses actually paid by Huskinson & Brown.

FACTUAL AND PROCEDURAL SUMMARY

We treat this case as an appeal on the judgment roll, since it reaches us based only on the clerk's transcript. (Rubin v. Los Angeles Fed. Sav. & Loan Assn. (1984) 159 Cal.App.3d 292, 296, 205 Cal.Rptr. 455.) Because the case is presented in that posture, we presume that the trial court's findings of fact are supported by substantial evidence, and its conclusions of law are binding upon us unless error appears on the face of the record. (Bond v. Pulsar Video Productions (1996) 50 Cal.App.4th 918, 924, 57 Cal.Rptr.2d 917.) Except where otherwise indicated, the following facts are taken from the trial court's findings of fact.

Huskinson & Brown states that it is a law firm specializing in defense of health care providers. A client, Beverly Sanchez,[1] approached the firm with a potential medical malpractice case against a health care provider. Rather than undertake the representation of this client in court, with the attendant risk of conflict of interest, the firm referred the matter to Wolf. The two firms entered an oral agreement by which Wolf would pay Huskinson & Brown, as a referral fee, 25 percent of any attorney's fees Wolf received from its work on the referred matter.

Rule 2-200 conditions a fee splitting agreement among counsel from different law firms upon written consent from the client. Ms. Sanchez never consented in writing to the referral fee agreement. (There was evidence that Ms. Sanchez was informed of the arrangement before the case was referred to Wolf, but no evidence *482 that her consent to fee splitting was sought or given.) Huskinson & Brown alleges that Wolf agreed to obtain her written consent.

Wolf brought a suit on behalf of Ms. Sanchez. That action ended with a judgment in Ms. Sanchez's favor for $250,000. (We refer to this litigation as the Sanchez lawsuit.) Huskinson & Brown alleges that Wolf received attorney's fees of $73,991.66 from the proceeds of the judgment.

At some point before the case was referred to Wolf, Huskinson & Brown paid $800 to Dr. Rex Greene, a medical expert involved in the Sanchez lawsuit. Huskinson & Brown spent approximately 20 hours performing legal services in furtherance of the Sanchez lawsuit, which the trial court valued at $250 per hour. Huskinson & Brown did not produce any records or invoices for these hours.

After the judgment was satisfied in the Sanchez lawsuit, Huskinson & Brown wrote twice to Wolf asking for its 25 percent share of the attorney's fees and reimbursement of the $800 in expenses. After receiving the second letter, Wolf responded with a letter that acknowledged the debt but asked for time to pay it due to financial hardship. The trial court found that, at the time Wolf received its attorney's fees in the Sanchez lawsuit, it had no intention of honoring its agreement to pay the referral fee.

After waiting seven months for payment, Huskinson & Brown sued Wolf to recover the referral fee. The second amended complaint, which is the operative pleading, sought recovery under the following causes of action: (1) breach of contract, (2) breach of partnership, (3) breach of fiduciary duty, (4) conversion, (5) fraud, (6) unfair business practices, (7) monies owed, (8) unjust enrichment, and (9) quantum meruit. Wolf demurred. The record does not contain the ruling on the demurrer, but we infer that it was overruled.

The matter was tried to the court. The court disallowed recovery for breach of contract because written consent had not been obtained from Ms. Sanchez. The court did not allow recovery from fraud due to insufficiency of evidence, and it made no statement as to the third, fourth and sixth causes of action. The court awarded Huskinson & Brown $18,497.81 under the unjust enrichment cause of action.[2] In the alternative, the court awarded Huskinson & Brown $5,800 plus interest for monies owed and quantum meruit, including $5,000 in attorney's fees for the 20 hours Huskinson & Brown expended.

The judgment also awarded Huskinson & Brown $2,772.88 in prejudgment interest and $1,073.00 in costs and disbursements. A nunc pro tunc correction to the judgment four months later eliminated the prejudgment interest award and reduced the costs and disbursements to $377.00.

Wolf filed a timely appeal from the judgment.[3]

*483 DISCUSSION

I

Except between associates, partners, or fellow shareholders, an attorney may not divide a fee for legal services with another attorney unless a full disclosure of the arrangement has been made to the client and the client has consented to the arrangement in writing. (Rule 2-200(A).) Although the attorneys agreed to share a legal fee in the Sanchez lawsuit, no written consent from Ms. Sanchez was obtained. Wolf argues that the trial court erred in allowing Huskinson & Brown to recover, under an unjust enrichment theory, the amount it would have been entitled to under the referral fee agreement.

Wolf relies on Margolin v. Shemaria (2000) 85 Cal.App.4th 891, 102 Cal.Rptr.2d 502, which held that where one attorney refers a case to another and the second agrees to obtain the client's written consent to a referral fee under rule 2-200 but fails to do so, the second attorney is not estopped from asserting noncompliance with the rule as a basis for avoiding payment of the referral fee. (Id. at p. 901, 102 Cal.Rptr.2d 502.) The Margolin court held that even where an attorney is relying on his or her own failure to obtain written consent from the client to avoid paying a referral fee, that attorney is not sufficiently unjustly enriched by the retained referral fee to be estopped from asserting rule 2-200 as a defense. The reason lies in the purpose for the rule: to protect clients, not referring attorneys.

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119 Cal. Rptr. 2d 479, 98 Cal. App. 4th 113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/huskinson-brown-v-wolf-calctapp-2002.