Olsen v. Harbison

191 Cal. App. 4th 325, 119 Cal. Rptr. 3d 460, 2010 Cal. App. LEXIS 2161
CourtCalifornia Court of Appeal
DecidedDecember 1, 2010
DocketNo. C058943
StatusPublished
Cited by36 cases

This text of 191 Cal. App. 4th 325 (Olsen v. Harbison) 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
Olsen v. Harbison, 191 Cal. App. 4th 325, 119 Cal. Rptr. 3d 460, 2010 Cal. App. LEXIS 2161 (Cal. Ct. App. 2010).

Opinion

Opinion

HULL, J.

This case involves a dispute between two attorneys over the division of fees. A client hired plaintiff Christopher J. Olsen to represent her in a personal injury action. Plaintiff subsequently brought in associate counsel, defendant Joseph F. Harbison III, doing business as Law Offices of Joseph F. Harbison & Associates. The client soon fired plaintiff and retained defendant. The case settled for $775,000.

Plaintiff filed a complaint against defendant to recover attorney fees by asserting claims for quantum meruit, breach of contract, fraud and deceit, intentional interference with contractual relationship, and imposition of constructive trust. In several rulings, the trial court disposed of these claims in favor of defendant.

Plaintiff appeals from the ensuing judgment and challenges each of the trial court’s determinations. We affirm the judgment.

Facts and Proceedings

In 1998, Kathleen Klawitter was injured at a golf course. She signed a contingent fee retainer agreement for plaintiff to represent her in a personal injury action.

In 2002, plaintiff decided to associate more experienced trial counsel into the case, and he contacted defendant. The two attorneys reached an agreement, reflected in their correspondence, which outlined a division of attorney fees that gave 60 percent to defendant and 40 percent to plaintiff. If the case went to trial, defendant would receive two-thirds of the fees; if the case settled at mediation, the fees would be split equally.

[329]*329Pursuant to rule 2-200 of the California Rules of Professional Conduct (subsequent rule references are to the California Rules of Professional Conduct), Klawitter signed an authorization for this fee division on July 31, 2002.

A few weeks later, Klawitter fired plaintiff from her case and entered into a new fee agreement with defendant. Her case ultimately settled for $775,000. Plaintiff did not receive any attorney fees.

In a first amended complaint, plaintiff alleged six causes of action against defendant: (1) quantum meruit, (2) breach of contract, (3) fraud, (4) intentional interference with contractual relationship, (5) breach of fiduciary duty, and (6) declaratory relief seeking the imposition of a constructive trust. Plaintiff alleged that defendant planned from the outset to lure Klawitter as a client and obtain 100 percent of the attorney fees.

We describe the court’s rulings in detail later in our opinion. Briefly, the trial court sustained defendant’s demurrer to the quantum meruit cause of action, ruling that there was no basis for such a claim because plaintiff performed services for his client, not defendant. Plaintiff subsequently filed a second amended complaint, asserting causes of action for (1) breach of contract, (2) fraud and deceit, (3) intentional interference with contractual relationship, and (4) imposition of constructive trust. The trial court granted summary adjudication on the second and third causes of action, concluding that the challenged communications were protected by the litigation privilege of Civil Code section 47, subdivision (b). In a second motion for summary adjudication, defendant challenged the breach of contract claim, again arguing that plaintiff’s only remedy lay in a quantum meruit claim against Klawitter. The trial court agreed, concluding that any contractual obligation to plaintiff under the fee-sharing agreement was extinguished when Klawitter discharged plaintiff as her attorney.

The only remaining cause of action at the time of trial was that for constmctive tmst/unjust enrichment. Defendant moved for judgment on the pleadings, asserting that as a matter of law, defendant was limited to seeking restitution through a quantum meruit valuation in a suit against Klawitter. Plaintiff responded that he could amend his cause of action to state claims for conversion and money had and received. The trial court granted judgment on the pleadings and rejected plaintiff’s proposed amendment.

The court subsequently entered judgment in favor of defendant and plaintiff appeals.

[330]*330Discussion

I

Quantum Meruit

Plaintiff’s first amended complaint included a cause of action for quantum meruit. Plaintiff alleged that the reasonable value of the services he provided to Klawitter was $310,000, an amount equivalent to the agreed-upon contingent fee of 40 percent of the gross settlement. He asserted that defendant had not paid him any portion of the attorney fees, that he had been damaged by this failure, and that defendant would be unjustly enriched if he retained the entire attorney fees. Plaintiff also alleged that defendant had failed to reimburse plaintiff for expenses plaintiff had advanced.

The trial court sustained defendant’s demurrer to this cause of action, ruling the complaint did not state sufficient facts to constitute a claim for quantum meruit. The court explained, “The letter agreement confirms that defendant will associate into the Klawitter v. Farris case as co-counsel and as primary trial counsel. Neither in that agreement nor in ... the complaint is there any indication that plaintiff would or did perform services for defendant rather than for Klawitter, plaintiff’s client.”

Plaintiff challenges this determination. We conclude that the trial court properly sustained defendant’s demurrer.

In reviewing a ruling on a demurrer, we accept as true the properly pleaded factual allegations of the complaint. (Crowley v. Katleman (1994) 8 Cal.4th 666, 672 [34 Cal.Rptr.2d 386, 881 P.2d 1083].)

“Quantum meruit refers to the well-established principle that ‘the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered.’ [Citation.] To recover in quantum meruit, a party need not prove the existence of a contract [citations], but it must show the circumstances were such that ‘the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made’ [citations].” (Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, 458 [9 Cal.Rptr.3d 693, 84 P.3d 379] (Huskinson).)

Quantum meruit provides a means of recouping attorney fees when an action for breach of contract is untenable. For example, rule 2-200 precludes attorneys from dividing a fee for legal services if the client has not given written consent to the fee division. Although an attorney who has not [331]*331received this written consent cannot sue to obtain the specified fees, the attorney may sue the client in quantum meruit to recover the reasonable value of the services rendered on the client’s behalf. (Huskinson, supra, 32 Cal.4th at pp. 458-464; Fracasse v. Brent (1972) 6 Cal.3d 784, 786, 790-791 [100 Cal.Rptr. 385, 494 P.2d 9].)

Similarly, if two law firms negotiate a fee-sharing agreement without obtaining the written consent of the client, a firm providing services under this agreement can obtain a quantum meruit recovery from the other firm for the reasonable compensation for its services. (Huskinson, supra, 32 Cal.4th at p.

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Cite This Page — Counsel Stack

Bluebook (online)
191 Cal. App. 4th 325, 119 Cal. Rptr. 3d 460, 2010 Cal. App. LEXIS 2161, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olsen-v-harbison-calctapp-2010.