Tuesday, June 28, 2011
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Court of Appeal:
Lawyers Who Represented Each Other Not Entitled to Fees
By a MetNews Staff Writer
The First District Court of Appeal Friday rejected a request for attorney fees by two northern California practitioners who represented each other in a lawsuit against a former mutual client in an apparent effort to evade the rule against compensation for lawyers who engage in self-representation.
In an unpublished decision, Div. Two concluded Alameda Superior Court Judge Jon Tigar had not abused his discretion in declining to award fees to San Francisco attorney Edward M. Higginbotham and Berkeley practitioner Michael M. Sims.
Michael Horejsi, the owner of an apartment building in Oakland, had hired Sims to represent him in various lawsuits involving neighboring property owners and the city of Oakland, and Higginbotham to represent him in his defense against a civil injunction.
After Horejsi failed to pay fees owed to the attorneys, they each filed complaints against Horejsi for breach of contract and fraud. Higginbotham alleged that Horejsi owed him $25,000 and Sims claimed a debt was due to him of over $10,000.
Horejsi sought fee arbitration and claimed that Higginbotham and Sims had overcharged him and had not performed their work professionally. The arbitrators ruled in favor of the attorneys, awarding $10,764.04 to Sims and $21,557.25 to Higginbotham.
Horejsi rejected these awards and filed a cross-complaint in the superior court for legal malpractice and breach of contract.
At trial, Sims served as the attorney for Higginbotham, and Higginbotham was counsel for Sims. Horejsi appeared in propria persona.
The jury found that Horejsi breached his contracts with Higginbotham and Sims, and had committed fraud against them by promising to pay their legal fees with no intent to honor his promises. The jury awarded $13,338 to Sims and $23,843 to Higginbotham.
Higginbotham and Sims subsequently requested attorney fees, but Tigar declined to issue such an award, based on the rule of Trope v Katz (1995) 11 Cal.4th 274.
That case held that “an attorney litigating in propria persona cannot be said to ‘incur’ compensation for his time and his lost business opportunities, because he does not become obligated to pay for them,” and therefore cannot recover fees.
Tigar found “[t]he sole reason for Sims and Higginbotham having appeared on each other’s behalf appears to have been to avoid the rule in Trope” since they “could easily have represented themselves” and “essentially did so.”
Higginbotham and Sims appealed, arguing that Trope applies only to requests for attorney fees under Civil Code Sec. 1717—the statute at issue in that case—and only when the attorney-litigant is in propria persona.
They claimed they were entitled to a discretionary award of attorney fees under Business and Professions Code Sec. 6204(d). This statute provides that a prevailing party in a trial after arbitration “may, in the discretion of the court, be entitled to an allowance for reasonable attorney’s fees and costs incurred….”
The appellate court, however, disagreed. In an opinion by Justice James R. Lambden, the panel noted “courts have not restricted the application of Trope to apply only to requests for attorney fees under Civil Code section 1717” and similar concerns to those raised by the Supreme Court in Trope were at play.
In Trope, the high court said Sec. 1717 “was designed to establish mutuality of remedy when a contractual provision makes recovery of attorney fees available to only one party, and to prevent the oppressive use of one-sided attorney fee provisions.” The justices reasoned that “[i]f an attorney who is the prevailing party in an action to enforce a contract with an attorney fee provision can recover compensation for the time he expends litigating his case in propria persona, but a nonattorney pro se litigant cannot do so regardless of the personal and economic value of such time simply because he has chosen to pursue a different occupation, every such contract would be oppressive and one-sided.”
Lambden reasoned this “problem of one-sidedness identified by the Trope court applies equally here,” since Sec. 6204(d) only permits a court to award the prevailing party attorney fees incurred and, since Horejsi was self-represented, he would not have been entitled to fees.
He also emphasized that Higginbotham and Sims were not seeking fees mandated by a statute, but monies which the trial court had discretion to award.
“The trial court’s conclusion that Higginbotham and Sims represented each other to avoid the effect of Trope was based on its own observations during the course of the trial,” Lambden said, and the trial court “was in the best situation to assess whether Higginbotham and Sims were essentially representing themselves.”
The case is Law Office of Edward M. Higginbotham v. Horejsi, A128521.
Copyright 2011, Metropolitan News Company