Bad News for Attorneys . . . Co-Counsel Cannot Try to Circumvent Limitation By Representing Each Other In De Novo Collection Matter Following Fee Arbitration.
Here is a somewhat of a wild one, where two attorneys co-counseling for the same clients were denied fee recovery after a successful jury verdict, following on the heels of a fee arbitration award de novo request by attorneys’ former client. The restriction in Trope v. Katz, 11 Cal.4th 274 (1995) was found dispositive, a restriction that generally denies Civil Code section 1717 fees to a self-represented lawyer-litigant in a contractual action against a former client.
In Law Office of Edward M. Higginbotham v. Horejsi, Case No. A128521 (1st Dist., Div. 2 June 24, 2011) (unpublished), two attorneys representing client eventually won a jury verdict against client after he rejected an adverse fee arbitration award and then requested a trial de novo, in a situation where each attorney represented the other. The two attorneys then sought recovery of attorney’s fees from client for their de novo win under Business and Professions Code section 6204(d), which allows for a discretionary award to a repeat fee arbitration prevailing party. However, the trial court denied fees by virtue of the Trope restriction, triggering an appeal by the disappointed attorneys.
The First District, Division 2 affirmed.
The attorneys initially did not convince the appellate court that Trope only applied to Civil Code section 1717 fee recovery, citing other decisions holding that it also applies to other statutory fee entitlement provisions. (E.g., Taheri Law Group v. Evans, 160 Cal.App.4th 482 (2008) [Code Civ. Proc., § 425.16]; Musaelian v. Adams, 45 Cal.4th 512, 520 (2009) [Code Civ. Proc., § 128.7].)
They then did not persuade the reviewing court that Trope singularly applied when the attorney-litigant acted in propria persona. In essence, the court did think that attorneys representing each other attempted circumvention of the one-sidedness underlying the Trope restriction, a conclusion was further buttressed by the fact that the fee entitlement provision was a discretionary one.
BLOG UNDERVIEW–The court did have a hard time distinguishing Farmers Insurance Exchange v. Law Offices of Conrado Joe Sayas, Jr., 250 F.3d 1234, 1237-1238 (9th Cir. 2001), where the Ninth Circuit determined that Trope did not prevent two law firms that had jointly represented a client, and who subsequently hired each other to recover the contingent fee due under the initial client retainer agreement, from obtaining attorney’s fees. It found that Farmers Insurance involved a decision to award fees, whereas the case before it involved a discretionary denial of such an award.