Second District, Division 2 Nixes Primary Trope Challenge On Appeal.
Here is an interesting one to add to the Trope jurisprudence, although it is unpublished in nature. The end result is that a general manager of a represented client likely is analogous to an in-house counsel lacking the personal interest to disqualify the manager’s law firm from recovering attorney’s fees under a contract clause pursuant to Civil Code section 1717.
In Pacific Systems v. Giant Skateboard Distribution, Case No. B211380 (2d Dist., Div. 2 June 21, 2010) (unpublished),
plaintiff appealed a postjudgment order denying an award of attorney’s fees under a lease fees clause pursuant to Civil Code section 1717. The facts can be summarized this way: the general manager of plaintiff landlord signed a lease with defendant, with the law offices of general manager eventually representing plaintiff in a lease dispute with defendant tenant. Tenant sent a Code of Civil Procedure section 998 offer, which was accepted, with the caveat that the trial judge would determine fees and costs awardable to prevailing plaintiff. Plaintiff sought $115,955 in primary attorney’s fees. The trial judge denied awarding any fees to general manager’s law firm.
On appeal, the matter was . . .
reversed, in a 3-0 opinion authored by Justice Chaney.
The main challenge was that general manager’s law firm was disqualified from a fee award under Trope [see our Leading Cases, where an attorney client cannot collect fee recovery for representing himself/herself/itself under section 1717]. This contention did not fly under the circumstances of this particular case. General manager introduced uncontradicted evidence that he had no ownership in plaintiff. Rather, based on this and other circumstances, the appellate court found this was more analogous to an in-house counsel representation which was allowed under PLCM Group, Inc. v. Drexler, 22 Cal.4th 1084, 1092 (2000) [another of our Leading Cases] for purposes of 1717 fee recovery. Because the general manager was not representing his personal interests (but those of plaintiff landlord entity), the matter was remanded to determine the amount of fees awardable to plaintiff.