Tuesday, April 27, 2010
C.A. Restores Attorney’s Conversion Claim in Fight Over Settlement
By STEVEN M. ELLIS, Staff Writer
An Orange County attorney can proceed with his action alleging that another firm needlessly added an extra signature on a settlement check to deceive a bank into negotiating it without his endorsement, the Fourth District Court of Appeal held yesterday.
Ruling that triable issues of fact existed as to whether Yorba Linda attorney Mark B. Plummer had a valid attorney’s lien on the funds, Div. Three said a trial court erred in granting summary judgment for Newport Beach firm Day/Eisenberg in Plummer’s conversion action.
Plummer—who signed a retention agreement with Costa Mesa firm Bisom & Cohen in 2003 purporting to grant him a lien directly on any recovery from a personal injury action—sued saying he was forced off the case and that the other firms later “wrongfully negotiated” a check for settlement funds to retain all of the attorney fees, despite knowing of his lien.
The two-page agreement, which was signed by the clients in the underlying action, provided that Plummer would act as counsel and would receive 50 percent of fees generated on contingency.
Plummer said Bisom & Cohen forced him out of the case in 2004 after he had worked on it for over a year, so he informed defense counsel in the underlying case about his lien and asked to be named a payee on any settlement check.
When the case settled for approximately $1 million, the defense counsel included Plummer’s name on a settlement check, along with the names of the two plaintiffs, Day/Eisenberg, and the “Law Offices of Andrew S. Bisom.”
Bisom presented the check to Bank of America in 2006, which negotiated it, but Plummer claimed that none of the five signatures on the check were his. Instead, he said, a fifth, illegible endorsement represented a second, unnecessary signature by one of Day/Eisenberg’s partners intended to make it appear that all five payees had endorsed the check.
Plummer sued Bank of America, Bisom, Isaac Cohen and Day/Eisenberg for conversion, adding a claim for interference with prospective economic advantage against the attorneys and Day/Eisenberg, and a constructive fraud count against Bisom & Cohen.
Day/Eisenberg moved for summary judgment, noting that the retention agreement’s first page provided that the contract was between the clients and Bisom & Cohen. Day/Eisenberg argued that Plummer could not show a right to possession necessary for his conversion claim because there was no direct contractual relationship between Plummer and the clients.
Orange Superior Court Judge James J. Di Cesare agreed and granted the motion.
On appeal, however, Justice Raymond J. Ikola said the agreement had to be read as a whole. He noted that it indicated on its second page the clients’ consent to Plummer’s representation in the case, in addition to providing for an “independent lien” to Plummer.
Ikola also noted that triable issues existed whether Plummer—who filed a complaint in the underlying action over his signature and under his bar number, in addition to filing other documents and appearing in court—acted as an attorney consistent with a direct contractual relationship, and said Day/Eisenberg failed to show Plummer was “trying to ride on the coattails of a lien granted to another attorney.”
Ikola then wrote that Plummer’s lien was not invalid as a matter of law under 3-300 of the Rules of Professional Conduct because the inclusion of a charging lien in an initial contingency fee agreement does not create an “adverse interest” to the client, and said that triable issues existed as to the remaining elements of conversion, as well as on the elements of the interference count.
As to the latter, the justice commented that correspondence between Day/Eisenberg and defense counsel in the underlying case tended to show that the firm knew about Plummer’s claim to a lien on the settlement funds before they were disbursed, but nonetheless urged defense counsel to circumvent it.
Presiding Justice David G. Sills and Justice William F. Rylaarsdam joined Ikola in his opinion.
The case is Plummer v. Day/Eisenberg, LLP, G041512.
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