The Contractual Attorney’s Lien Was Between Plaintiff And The Client, So No Fiduciary Duty Was Owed By The Other Firm Members To Plaintiffs.
In Palmieri v. Foondos, Case No. C100383 (3d Dist. June 22, 2026) (unpublished), a fight developed between plaintiff and other members of a law firm she left with respect to recovery of attorney’s fees based on a settlement of a foreclosure action. The firm offered her 20%, but she wanted 30% and later 50% of the recovery, aggressively asserting her entitlement to the larger share based on a contractual attorney’s lien in the contingency agreement with the client. Plaintiff was unsuccessful in suing the other firm member attorneys under various tort theories. The critical flaw was that plaintiff did not have a fee division agreement which would have obviated the lien issue with the client vis-à-vis other attorneys, such that there was a violation of California Rule of Professional Conduct 1.5.1, which requires that a fee division arrangement be in writing, be consented to by the client, and not increase fees by reason of the division alone. The fee division arrangement was the mechanism to pursue, a proposition agreed to by both the trial and appellate courts.
The appellate court dismissed the fiduciary duty claim against the other attorneys with the following reasoning: “Here, to the extent [Plaintiff] Palmieri’s lien was determined to be valid and worth $80,000, the lien was found to be between ‘Palmieri and Gilliland.’ The ruling was between Palmieri and Gilliland ‘only.’ While the lien may have given Palmieri a right to try to collect from Gilliland, it did not give her a right to collect the value of her services from defendants’ fee award. (Cf. Olsen v. Harbison (2010) 191 Cal.App.4th 325, 332 (Olsen) [rejecting a quantum meruit claim raised by a first counsel against a second counsel in an action when the client had consented to a fee division then fired her first counsel because the ‘client had a direct relationship with both’-counsel]; Aresh, supra,92 Cal.App.5th at pp. 306-307 [allowing an award awarding fees to one attorney to stand, but disallowing a decision in the action that stated the clients’ rights to be paid specific funds because that ruling would impact the funds deemed available to pay another attorney].) To the extent defendants paid Gilliland all the funds due to her—thereby removing funds upon which the lien rested from the account—they did so under Palmieri’s direction and to meet the client’s immediate needs as represented by Palmieri. The duty to the client outweighed a possible duty to Palmieri in this circumstance. ‘It is fundamental to the attorney-client relationship that an attorney have an undivided loyalty to his clients. . . . This loyalty should not be diluted by a duty owed to some other person, such as an earlier attorney.’ (Mason v. Levy & Van Bourg (1978) 77 Cal.App.3d 60, 66.)”