Plaintiff Herself Was A Sophisticated Litigant, With The Lower And Appellate Courts Finding The Retainer Agreement Was Unambiguous In The Proper Allocation.
Brinkman v. Jane Doe, Case No. A173377 (1st Dist., Div. 2 Mar. 24, 2026) (unpublished) is a situation where plaintiff disputed what portion of a settlement negotiated with two different bank defendants was due to her versus what was due to her attorneys. She lost when the lower court found in Attorneys’ favor.
The case involved a plaintiff, who was an experienced paralegal, who served as a lay arbitrator with the San Francisco Fee Dispute Arbitration Program, and who had expertise with fee agreements, agreed to be a lead class action plaintiff in an action where two defendant banks were involved (including Unruh Act claims with statutory penalties and fee-shifting provisions). The retainer agreement had a contingency arrangement for both class and individual claims, but had an important carve-out for situations where a settlement was separately negotiated for individual recovery versus counsel fee recovery: “If ATTORNEYS represent CLIENT on an individual basis only and ATTORNEYS obtain a monetary recovery for CLIENT on an individual basis, either by settlement or judgment, ATTORNEYS will be entitled to their costs related solely to the CLIENT’s individual representation, plus compensation for their services related solely to CLIENT’s individual representation in the amount of thirty-five percent (35%) of the total amount of the Gross Value of the settlement or award if obtained before trial begins or the amount forty percent (40%) if the case is resolved after trial commences or goes to judgment. This limitation is not applicable if the attorneys’ fee is negotiated separately or paid separately so as not to reduce the gross value of CLIENT’s recovery. ‘Gross Value’ means the total of all monetary awards obtained whether by settlement, mediated result, arbitration award or court judgment including back and front pay, and damages, but excluding ‘expenses.’ ”
After settlements were reached with the two bank defendants by which individual recovery and counsel fee recovery was done under the carve-out, plaintiff took the position she was entitled to 65% of the recovery and Attorneys were entitled to 35%, even though Attorneys’ position was that plaintiff got what was separately negotiated for her/other claimants, individually (much less) with the rest going to the Attorneys. The lower court agreed with Attorneys, who won their declaratory relief action and defensed plaintiff’s cross-claims.
The appellate court agreed with the lower court, finding that the retainer agreement carve-out was unambiguous and further supported by the reasoning of Flannery v. Prentice, 26 Cal.4th 572, 575 (2001), which held that statutory fee recovery belongs to the attorney, not the client.