The Travelers Indemnity Company of Connecticut v. Walking U Ranch, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 19, 2023
• Docket: 22-55359
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 19 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

THE TRAVELERS INDEMNITY No. 22-55359 COMPANY OF CONNECTICUT, a Connecticut corporation; TRAVELERS D.C. No. CASUALTY INSURANCE COMPANY OF 2:18-cv-02482-CAS-GJS AMERICA, a Connecticut corporation,

Plaintiffs-counter- MEMORANDUM* defendants-Appellees,

v.

WALKING U RANCH, LLC, a California limited liability company; KATHLEEN P. MARCH, an individual; PATRICK BRIGHT, an individual,

Defendants-counter- claimants-Appellants.

Appeal from the United States District Court for the Central District of California Christina A. Snyder, District Judge, Presiding

Submitted April 17, 2023** Pasadena, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Before: WARDLAW and H.A. THOMAS, Circuit Judges, and ROSENTHAL,*** District Judge.

Kathleen March, Patrick Bright, and Walking U Ranch, LLC (collectively,

the “Insureds”) appeal from the district court’s grant of summary judgment to

Travelers Indemnity Co. (“Travelers”) on the Insureds’ claim for a bad faith breach

of the insurance policy and request for attorney’s fees. The Insureds also appeal the

district court’s decision not to exclude an expert declaration from Andre E. Jardini

(the “Jardini report”). We have jurisdiction under 28 U.S.C. § 1291. We affirm.

“We review de novo a district court’s grant of summary judgment,

considering the record in the light most favorable to the non-moving party.” G & G

Closed Circuit Events, LLC v. Liu, 45 F.4th 1113, 1115 (9th Cir. 2022). We “may

affirm the district court on any grounds the record supports.” Id. at 1117 (citing

Sully v. Ayers, 725 F.3d 1057, 1067 (9th Cir. 2013)).

1. The Insureds may not recover attorney’s fees from Travelers for work that

the former performed representing themselves in an underlying property dispute

(the “underlying action”) for which Travelers had a duty to defend the Insureds.

Under California law, attorneys may not recover fees for work they perform

representing themselves. Trope v. Katz, 902 P.2d 259, 262 (Cal. 1995). This

*** The Honorable Lee H. Rosenthal, United States District Judge for the Southern District of Texas, sitting by designation.

2 principle also bars attorney’s fees that insured, self-represented attorneys seek to

recover from insurers with duties to defend them. See Richards v. Sequoia Ins. Co.,

195 Cal. App. 4th 431, 436–38 (2011) (finding that a self-represented attorney

suffered no damages from an insurer’s alleged breach of its duty to defend,

because the attorney would not, in any event, have been entitled to compensation

from the insurer for his self-representation). Nor does the Insureds’ assertion that

March and Bright performed legal work on behalf of attorneys that Travelers

appointed to represent them entitle them to attorney’s fees. Attorneys may not

circumvent the restriction on fees for self-representation by hiring a “straw man”

attorney to nominally represent them while they do all the work. Trope, 902 P.2d at

270.

2. March and Bright argue that they are entitled to attorney’s fees because

they represented Walking U Ranch, LLC, a distinct legal entity. Under California

law, however, attorneys may not recover for work performed only on behalf of

themselves and another party with identical interests. See Gorman v. Tassajara

Dev. Corp., 178 Cal. App. 4th 44, 95–96 (2009) (no attorney’s fees for a husband

attorney’s representation of his wife in a dispute over property they jointly owned).

March and Bright are married, and are the sole owners of Walking U Ranch, LLC.

The Insureds therefore all shared the same interest in the outcome of the

underlying action. There is also no indication that March or Bright spent any extra

3 time in the underlying action representing Walking U Ranch, LLC rather than

themselves. Id. at 95.

PLCM Group v. Drexler, 997 P.2d 511 (Cal. 2000) does not compel a

contrary result. In that case, the Supreme Court of California held that a

corporation could recover attorney’s fees for work performed by in-house counsel.

Id. at 513. The Court explained that “[a] corporation represented by in-house

counsel is in an agency relationship, i.e., it has hired an attorney to provide

professional legal services on its behalf.” Id. at 517. In this case, however, March

and Bright are on both sides of this “agency relationship,” as they are both

members of the LLC and the attorneys hired by the LLC. Accordingly, no fees are

warranted.

3. Because Travelers did not breach its duty to defend the Insureds by failing

to pay the requested attorney’s fees, we affirm the district court’s grant of

summary judgment to Travelers on the Insureds’ claim for bad faith. See Grebow

v. Mercury Ins. Co., 241 Cal. App. 4th 564, 581–82 (2015) (no claim for bad faith

under an insurance policy if the policy was not breached).

4. The Insureds argue that the district court erred by considering the Jardini

report. The Jardini report’s conclusions related solely to the reasonableness of the

fees that the Insureds requested for March and Bright’s work. Because the Insureds

are not entitled to any of these fees, the Jardini report was irrelevant to the

4 disposition of the party’s claims. With or without the Jardini report, moreover, the

record supports the district court’s decision. See G & G Closed Circuit Events,

LLC, 45 F.4th at 1117.

AFFIRMED.