Fourth District, Division Three So Holds in Unpublished Decision.
The general rule is that an attorney claiming an attorney lien over settlement proceeds or a judgment must file an independent action to establish the existence and amount of the lien, with any order granting attorney’s fees in the main action being in excess of the trial court’s jurisdiction. (Bandy v. Mt. Diablo Unified Sch. Dist., 56 Cal.App.3d 230, 234 (1976).) However, a litigant may be estopped to challenge an irregular decision upon jurisdictional grounds if the circumstances are right. Facts demonstrating estoppel did arise in the next case that we examine.
In Joelson v. Koberstein (Law Offices of Federico C. Sayre), Case No. G038727 (4th Dist., Div. 3 Oct. 1, 2008) (unpublished), a dispute arose over an attorney lien covering settlement proceeds for services rendered in a residential mold infestation contingency case. Claimant attorney and clients stipulated that the trial court in the underlying contingency case could conduct a hearing to resolve the attorney lien dispute. A contested hearing was held, after which the trial court determined the lien was correct because clients had failed to prove that attorney acted below the standard of care and had failed to prove attorney malfeasance. Clients appealed.
Acting Presiding Justice Rylaarsdam, on behalf of a 3-0 panel of the Fourth District, Division 3, affirmed.
The appellate panel acknowledged the normal rule that attorney liens must be decided in independent actions. However, as are most general rules, exceptions do come into play. One of them, in this context, is estoppel–a litigant stipulating to a procedure in excess of jurisdiction may be estopped to question it when “to hold otherwise would permit the parties to trifle with the courts.” (E.g., People v. National Auto. & Cas. Ins. Co., 82 Cal.App.4th 120, 125-126 (2000); Law Offices of Stanley J. Bell v. Shine, Browne & Diamond, 36 Cal.App.4th 1011, 1023 (1995).) Justice Rylaarsdam reasoned that “[t]his appeal presents an even clearer example of estoppel” than the cited cases. The parties stipulated to the motion procedure, plaintiffs filed motions in limine, plaintiffs heavily contested the lien at the hearing, and plaintiffs never once contested the authority of the trial court to decide the matter. Result: estoppel/waiver of the jurisdictional argument.
The appellate panel also found the lower court did not err by awarding claimant attorney the entire amount of claimed unpaid fees. Because attorney’s discharge occurred “on the courthouse steps,” the entire claimed fee was properly deemed a reasonable fee under an unjust enrichment analysis. (See Fracasse v. Brent, 6 Cal.3d 784, 791 (1972).)