Tuesday, April 17, 2012
C.A. Tosses Ruling Allowing Client to Cut Lawyer Out of Fee Award
By a MetNews Staff Writer
An attorney who represents the prevailing plaintiff in a wage-and-hour case is entitled to have fees awarded to the lawyer personally, rather than to the client, unless the parties’ fee agreement is to the contrary, the Court of Appeal for this district ruled yesterday.
Div. Three overturned Los Angeles Superior Court Judge Mary H. Strobel’s denial of a motion to allow attorney Henry M. Lee to personally enforce the $300,000 fee award he received for representing Ok Song Chang in a suit against A-Ju Tours, Inc. The court ordered the trial judge to determine whether the fee agreement between Lee and Chang bars Lee from enforcing the award in his own name.
Lee filed Chang’s complaint against the company in 2003, including claims for failure to pay minimum wage, failure to pay overtime, and wrongful termination. The case went to trial in 2010; the jury found for the plaintiff only as to the minimum wage claim.
Judgment and Award
The plaintiff was awarded $62,000 in unpaid wages and penalties. The fee award was added on motion filed by Lee, but before a writ of execution could be enforced, the defendant obtained an ex parte stay and a hearing was scheduled in order to determine whether the undertaking filed by defendant was sufficient to stay the fee award.
The judge granted the defendant 10 days in which to increase its undertaking, or to file a separate undertaking with respect to the fee award. A-Ju did neither, but before the 10 days expired, the plaintiff fired Lee, and substituted herself in propria persona, apparently in order to settle with A-Ju directly. Lee then moved to amend the judgment to provide that the attorney fees were awarded to, and could be enforced by, him personally.
The judge denied the motion, citing Labor Code Secs. 1194(a) and 226(e), which the judge found to unambiguously provide for an award of fees to the plaintiff, rather than the attorney.
Lee challenged that ruling by petitioning for a writ of mandate, which the Court of Appeal granted yesterday.
Justice Walter Croskey wrote for the court, which rejected arguments that Lee lacked standing and that the case was inappropriate for writ relief.
“Lee’s claim that the fee award should be made payable to him rather than Chang must clearly be resolved before the appeal from the fee order proceeds any further so that he may have an opportunity to participate as a respondent in that appeal if he is successful on his claim,” the justice said. “We therefore conclude that an appeal from the order denying his motion to vacate is not an adequate remedy and that expedited review in this extraordinary writ proceeding is appropriate.”
On the merits, Croskey disputed the trial judge’s interpretation of the statutes. Nothing in the text or legislative history, the justice said, indicates that the Legislature, in authorizing fee awards to an “employee,” intended to distinguish between employees and their attorneys.
Strobel’s interpretation, he said, is inconsistent with the intent of the legislation.
“Construing Labor Code sections 1194, subdivision (a) and 226, subdivision (e) as requiring the payment of a statutory attorney fee award to the litigant rather than to the attorney, absent a contract providing for a different disposition of an attorney fee award, would diminish the certainty that attorneys who undertake such litigation will be fully compensated, contrary to the legislative intent of encouraging counsel to prosecute such litigation,” the justice.
Lee represented himself on appeal, along with an associate, Robert Myong. John H. Oh represented Chang and Ralph Rogari of Rehm & Rogari was counsel for A-Ju.
The case is Henry M. Lee Law Corporation v. Superior Court (Chang), B235305.
Copyright 2012, Metropolitan News Company