Fourth District, Division 1 So Holds In a Result Consonant With Prior Reviewed Decisions on this Website.
Here is one we have seen before, but bears repeating.
Attorney sues to collect on a receivable owed from a former client, but through a cross-complaint after client sues for legal malpractice. Attorney prevails in both actions, defensing the malpractice action and affirmatively recovering on the receivable cross-complaint. Attorney has a retainer agreement, with a fees clause, albeit fairly narrow in scope—allowing for fee recovery if prevailing in any action “to recover any amount due pursuant to the terms of this Attorney/Client Fee Agreement.” Attorney moved to recover fees of $343,205 in fees expended in defending against the legal malpractice action and in recovering on the receivable. The trial court awarded successful attorney $68,641 in fees based on recovery under the receivable cross-complaint. Disgruntled she did not get more, attorney appealed seeking additional fees.
Not to be had, said the Court of Appeal in Ferrey v. Hasso-Najm, Case No. D053741 (4th Dist., Div. 1 Nov. 13, 2009) (unpublished).
The problem here was that the retainer agreement fees clause was narrow in scope, reaching only fees in an action to recover expenses “pursuant to the terms” of the retainer agreement, not more broadly worded “arising out” retainer language. The legal malpractice action did not challenge the enforceability of the retainer agreement, but was one for a tort independent of recovery under the contract. The narrow wording of the fee clause properly did not allow for recoupment of fees expended in successfully defending against the malpractice action, but only recoupment of apportioned fees spent in winning under the receivable lawsuit. Judgment affirmed, given that the lower court only awarded apportioned fees in the non-malpractice segment of the litigation.
BLOG UNDERVIEW—This case is hardly an aberration. We refer readers to these posts that are consistent with the ruling in Ferrey: July 1, 2008 post on Wolf v. Glassberg, Pollak & Associates (1st Dist., Div. 4 unpublished) [legal malpractice action was not “on the contract”, but based on a tort, for purposes of Civil Code section 1717 fee recovery] and May 27, 2009 post on Tesh v. LeTourneau (4th Dist., Div. 1 unpublished) [narrow fee clause did not allow for recovery in action with malpractice claims].