Wednesday, May 1, 2013
C.A. Reverses Judgment in Fee Dispute Between Lawyers
Panel Says Plaintiff Should Not Have Been Allowed to Amend Mid-Trial
By KENNETH OFGANG, Staff Writer
A Los Angeles Superior Court judge committed prejudicial error by allowing an attorney to amend his complaint in the middle of a trial concerning a fee dispute with an ex-client, who is also a lawyer, the Court of Appeal for this district ruled yesterday.
Div. One overturned a $140,000 judgment in favor of Santa Monica sole practitioner David J. Duchrow in his suit against Ernestine Forrest. Presiding Justice Robert Mallano said Judge Alan S. Rosenfield abused his discretion when he allowed Duchrow to amend his complaint on the fourth day of a five-day trial, leaving the self-represented Forrest with insufficient time to research the legal implications of Duchrow’s new theory of recovery.
Forrest was terminated from her 12-year employment at the Department of Corporations in 2000. She successfully appealed her termination to the State Personnel Board, and the department’s writ petition challenging the board’s ruling—which granted Forrest reinstatement and three years of backpay—was denied.
After the board ruled in her favor, Forrest filed a pro per lawsuit against the department alleging wrongful termination, race and gender discrimination, harassment, retaliation and breach of contract. She subsequently retained Duchrow to represent her, signing a fee agreement.
She agreed to pay Duchrow $400 per hour, up to a maximum of $8,000, plus 40 percent of the gross recovery. The agreement also provided that if she discharged Duchrow, or if he withdrew for good cause, Duchrow reserved “the right to bill for all time spent in the prosecution of your matter.”
Duchrow separately agreed to represent Forrest in new proceedings before the State Personnel Board, after the department again moved to fire her, for $275 per hour. Both fee agreements provided for interest on unpaid fees and costs.
The civil suit was set for trial in August 2004, but was continued on several occasions. In June 2005, Duchrow’s motion to withdraw—on grounds that Forrest failed to take his advice, breached the fee agreement, and made it unreasonably difficult for him to remain in the case—was granted after an in camera hearing, the reporter’s notes of which were sealed.
When Forrest failed to retain new counsel within the time set by the court, the department moved to dismiss. It argued that Forrest could not represent herself because she had been declared a vexatious litigant by the Court of Appeal in 1994 and had not obtained a prefiling order allowing her to litigate the case in pro per.
Judge Tricia Bigelow—later elevated to the Court of Appeal—granted the dismissal in August 2005. Div. Two of the Court of Appeal affirmed in Forrest v. Department of Corporations (2007) 150 Cal.App.4th 183, saying Duchrow had good cause to withdraw, that the prefiling requirements of Code of Civil Procedure Sec. 391.7 remain in effect for the life of the lawsuit, and that the judge did not abuse her discretion by not giving Forrest more time to find a lawyer.
Duchrow sued in 2008, seeking $44,000 in unpaid fees and costs. The complaint did not explain how the amount was calculated, or how it broke down between the two agreements.
The case went to trial in 2011. Duchrow represented himself, with other attorneys handling some parts of the trial for him, and Forrest represented herself throughout the trial.
Duchrow claimed in his opening statement that he had spent more than 800 hours working on the civil suit, even though the client had been uncooperative at every turn, and that he was entitled to over $300,000 for that matter, as well as to almost $36,000 for the civil case.
After he testified, Duchrow moved to amend the complaint. He argued that Forrest had been aware of the figures since his deposition, and that his testimony had established that the clause allowing him to charge for “all time spent” if he withdrew for good cause was operative.
The motion was granted, and the jury ultimately awarded Duchrow a portion of what he requested for the litigation, although it found his claim for fees in the administrative matter to be time-barred.
On appeal, Mallano agreed with the plaintiff that there was substantial evidence supporting the verdict. But the late amendment of the complaint should not have been allowed, he said, because it introduced new issues into the case, turning the issue from whether Duchrow fulfilled the contingency agreement to the truth of his claims that Forrest had been uncooperative, which she vigorously disputed in her testimony, as well as to the truth and reasonableness of his claim to have spent more than 800 hours litigating the case.
Allowing the amendment at that late stage of the proceedings, the presiding justice went on to say, “prejudiced Forrest in several ways”—it increased her exposure; deprived her of discovery; prevented her from retaining an expert who could have challenged the reasonableness of the fee claim; deprived her of a sufficient opportunity to explore settlement possibilities; enabled the plaintiff, an experienced litigator, to take advantage of her lack of courtroom experience; and left her with no time to do legal research as to whether the “all time spent” clause was enforceable.
“Forrest could have made a colorable argument—one we do not decide—that, at most, Duchrow was entitled to recover in quantum meruit for the reasonable value of his services, not $400 for every hour he supposedly worked on the case….,” Mallano explained.
The case is Duchrow v. Forrest, 13 S.O.S. 2157.
Copyright 2013, Metropolitan News Company