Associates Were Working For Sole Proprietorship, Not Purely Personal Interests of Attorney; Carpenter Case Found On Point.
Soni v. Wellmike Enterprise Co. Ltd., Case No. B242288 (2d Dist., Div. 3 Mar. 26, 2014) (published) is another addition to the jurisprudence on the Trope v. Katz, 11 Cal.4th 274 (1995) prohibition—if you as an attorney suing for a pure collection matter with no personal interests involved, hire outside counsel or figure you waive any entitlement to contractual attorney’s fees under a retainer agreement.
In this one, a law sole proprietorship did win a $28,384 judgment to collect delinquent fees against a former client. However, at what cost? Apparently, $120,912 in attorney’s fees later requested in a fees motion under a retainer agreement fees clause. The lower court denied the motion for fees on the basis that associates or employees in the legal office presented the sole proprietorship in the successful trial, precluding fees under Trope and especially the Trope successor case of Carpenter v. Zuckerman & Cohen, 195 Cal.App.4th 373 (2011).
The appellate court affirmed, providing a very eloquent “hunting guide” through Trope cases, ranging from corporate in-house counsel representation (fees allowed) to a pure representation by the suing attorney (fees now allowed). Because the proof showed that associates/employees did indeed provide business collection efforts to the sole proprietorship, Carpenter was found to be directly on point by both the lower and appellate courts.