Monday, October 6, 2014
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Court: Firm’s ‘Contract Attorney’ Not Entitled to Fees
By KENNETH OFGANG, Staff Writer
An attorney described by his firm as an “independent contractor” was not entitled to a fee ward for successfully representing the firm in connection with an anti-SLAPP motion, the Third District Court of Appeal ruled Friday.
The panel overturned an award of more than $14,000 in fees to Joseph R. Major for representing the Ellis Law Group, which won its motion to strike a cross-complaint filed by a former client whom the firm sued for fees.
Sacramento Superior Court Judge Shelleyanne Chang accepted the law firm’s argument that Major, who had no billable hour requirements, did not accrue vacation time, received no health care benefits, and was paid by the hour without tax deductions, was not a member of the firm for purposes of applying Trope v. Katz (1995) 11 Cal.4th 274.
Trope held that a law firm that represented itself in a breach of contract action against a former client could not recover attorney fees under Civil Code §1717. The reasoning of that case— that an “attorney who chooses to litigate in propria persona” by that choice “does not pay or become liable to pay consideration in exchange for legal representation”—was extended to those who litigate anti-SLAPP motions when their firm is the client by Witte v. Kaufman (2006) 141 Cal.App.4th 1201.
Justice Andrea Hoch, writing for the Court of Appeal Friday, said Major should be considered a member of the firm under the specific facts of the case.
Although the Court of Appeal has adopted a “bright line” rule that an attorney who is “of counsel” to a firm is a member of that firm for purposes of Trope, no similar rule exists for independent contractors, Hoch explained, noting there is no definition of “independent contractor” in the Rules of Professional Conduct.
While the term is “commonly used for tax characterization purposes,” Hoch explained, there is no reason to use an Internal Revenue Service definition as dispositive of the Ellis Law Group’s claim that Major is not part of the firm for purposes of obtaining fees for representing it.
The IRS ruling cited by the firm, she said, “does not inform the nature of professional duties owed by a particular attorney to a law firm.”
Turning to the facts specific to the anti-SLAPP motion, Hoch concluded that “Major was a member of ELG during the time he worked on the anti-SLAPP motion because that was what ELG and Major repeatedly represented to the trial court and opposing counsel.”
Of nine documents filed by the firm in connection with the motion, the justice noted, Major was listed as a member of the firm on eight of them, including the notice of motion itself, and used the firm’s mailing and email addresses in connection with the motion.
“Major’s uniform inclusion as a member of ELG in the caption of the anti-SLAPP documents is dispositive,” the justice declared.
The case is Ellis Law Group, LLP v. Nevada City Sugar Loaf Properties, LLC, 14 S.O.S. 4408.
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