Leiper v. Gallegos

CourtCalifornia Court of Appeal
DecidedSeptember 23, 2021
DocketB309986
StatusPublished

This text of Leiper v. Gallegos (Leiper v. Gallegos) 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
Leiper v. Gallegos, (Cal. Ct. App. 2021).

Opinion

Filed 9/23/21 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

GARY D. LEIPER as Trustee, 2d Civil No. B309986 etc., (Super. Ct. No. P073688) (Ventura County) Plaintiff,

v.

DENNIS GALLEGOS,

Defendant;

JOHN L. POOLE,

Objector and Appellant;

BANK OF THE WEST, as Trustee, etc.,

Objector and Respondent.

John L. Poole appeals from an order denying his motion for attorney fees and costs. Poole, an attorney, represented only himself. His appeal presents the following issue: May an attorney who represents only himself (pro se attorney) recover attorney fees and costs in equity under the common fund theory? This theory is an exception to “the American rule, which provides that each party to a lawsuit must ordinarily pay his own attorney fees.” (Trope v. Katz (1995) 11 Cal.4th 274, 278 (Trope).) In Trope, the California Supreme Court held “that an attorney who chooses to litigate in propria persona and therefore does not pay or become liable to pay consideration in exchange for legal representation cannot recover ‘reasonable attorney’s fees’ under [Civil Code] section 1717,” which applies to contractual awards of attorney fees. (Id. at p. 292.) The Supreme Court left open the question whether a pro se attorney may recover attorney fees under the nonstatutory common fund theory. (Ibid. [“we express no opinion regarding the applicability of our reasoning . . . in the context of the equitable exceptions [e.g., the common fund theory,] to the American rule”].) We agree with the trial court as to attorney fees under the common fund theory. But we disagree with the court’s ruling as to costs. We hold that an attorney who represents only himself and does not pay or become liable to pay consideration in exchange for legal representation may not recover attorney fees under the equitable common fund doctrine, but may seek recovery of legitimate, reasonable costs excluding attorney fees under that doctrine. Factual and Procedural Background This case arises from E.S. Barnard’s 1939 lease of oil and gas rights beneath his land (Lot 7). The lessee was a major oil company. The facts are set forth in detail in our prior opinion, Leiper v. Gallegos (2019) 42 Cal.App.5th 394, 398-401 (Leiper). We briefly summarize them here. In 1957 E.S. Barnard’s company “dissolved and conveyed its interests in Lot 7, including the oil and gas lease, to its

2 shareholders (the Barnards and Pooles . . .). In 1977, the [owners] entered into an agency agreement titled ‘Barnard Oil Trust . . .’ . . . for the distribution of oil and gas royalties.” (Leiper, supra, 42 Cal.App.5th at p. 399.) One of the Barnards defaulted on a tax bill. In 1978 Lot 7 was sold at public auction and was eventually conveyed to Dennis Gallegos. Gallegos claimed he was entitled to a share of the oil and gas royalties. Because of his claim, the oil company suspended distribution of the royalties. Gary Leiper, the trustee of the Barnard Oil Trust, tentatively settled the dispute with Gallegos. The settlement provided that Gallegos would receive 5.714 percent of the royalties. Appellant Poole, a fractional owner of the oil and gas rights, objected to the settlement. Appellant claims that his interest in the royalties is “less than 1%.” Appellant “filed a petition to determine title and royalty rights.” (Leiper, supra, 42 Cal.App.5th at p. 400.) The oil company petitioned “to interplead the oil royalties . . . and deposited the money with the trial court.” (Ibid.) According to a document filed in March 2020, the amount of the interpleaded funds was “at least $500,000.” The trial court “ordered Leiper to file a petition [to] quiet title and [for] declaratory relief. [Gallegos], in response to [Leiper’s] petition, asked the trial court to confirm . . . that the 1978 tax deed conveyed both the surface rights and subsurface oil and gas rights.” (Ibid.) The trial court “expressly ruled that [Gallegos] had no interest in the oil and gas royalties because the tax collector ‘didn’t foreclose upon those rights.’” (Leiper, supra, 42 Cal.App.5th at p. 401.) Gallegos appealed. We upheld the trial court’s ruling. We concluded that Gallegos “is the surface owner

3 to Lot 7 but he does not now own an interest in the oil and gas under Lot 7.” (Id. at p. 398.) Appellant moved to recover his reasonable attorney fees and costs. He claimed that he had “conceived the theory upon which the Court of Appeal[] ruled in favor of the Barnards.” Appellant sought “$50,745 for fees and [$1,572.75] for costs for work successfully defending the trial court judgment on appeal.” In addition, he sought “$46,020 for fees and $1,269.29 for costs for work performed in the Superior Court.” Relying on the equitable common fund theory, appellant requested that payment be made from the interpleaded oil and gas royalties. During appellate oral argument, appellant asserted that, but for his efforts, Gallegos would have received 5.714 per cent of the royalties. Some members of the Barnard and Poole families opposed appellant’s motion for attorney fees “because he was representing his own interests individually and the money [he requested] would deplete the amount of royalties interpleaded with the Court and available for distribution to family members.”1 One family member emailed the trial court: “In my view, [appellant’s] personal interference in this case has been counterproductive.” In September 2017 another family member wrote a letter to the

1 Appellant estimated “that as of 4/18/2021, $331,479.09[] ha[d] been paid or authorized to be paid [from the interpleaded funds] to attorneys and the referee,” not including “$6,335 authorized to be paid to Leiper on April 14, 2021.” If appellant’s request for attorney fees and costs were granted, the amount paid would increase to $437,421.13.

4 court in which she complained, “My grandparents and my father would be distressed and appalled that a single member [appellant] of a large and extended family has tied up Court’s time and money in his personal quest.” During appellate oral argument, counsel for respondent Bank of the West (Bank) explained that family members were upset because, as a result of the litigation, the stream of royalty payments to the beneficiaries stopped for “almost five full years.” Family members were concerned that the interpleaded funds would be drained by the payment of fees. The trial court denied appellant’s motion for attorney fees and costs. It said: “Here the issue is not if the common fund theory applies; the Court already has applied it to the attorney fee request by Austin Barnard Trust’s attorney.[2] The issue is if [appellant] can be paid ‘attorney fees’ for his self-representation in this matter. [¶] [Appellant] did not ‘employ’ an attorney, did not incur attorney’s fees, and there is no attorney/client relationship. [Appellant], who is a California licensed attorney, chose to represent himself in this litigation.”3 Because appellant

2 The request was made by Bank, co-trustee of the Austin M. Barnard Trust. Unlike appellant, Bank retained counsel. It filed a respondent’s brief in both appellant’s present appeal and Gallegos’s prior appeal. Relying on the common fund theory, the trial court granted Bank’s motion for attorney fees incurred in Gallegos’s appeal. The court ordered that Bank’s attorney fees “shall be paid from the funds interpleaded with the Court.”

3 Although appellant is a licensed California attorney, he was employed in a field unrelated to law when he sought recovery of his attorney fees. Appellant declared, “I work full time as a software engineer at [name deleted] Corporation, so I have to attend to this matter outside of business hours.”

5 represented himself, the court ruled that he is not entitled to attorney fees under the common fund theory.

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Bluebook (online)
Leiper v. Gallegos, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leiper-v-gallegos-calctapp-2021.