Thursday, July 31, 2014
C.A. Says Self-Represented Attorneys Sometimes Entitled to Fees
Panel Says Quinn Emanuel’s Successful Defense of Malpractice Claim Justified Arbitrator’s $2 Million Award
By a MetNews Staff Writer
California’s public policy against recovery of attorney fees by lawyers who represented themselves does not preclude such an award for the defense of a legal malpractice claim if the parties have specifically provided for one in a retainer agreement, the Court of Appeal for this district has ruled.
Div. Five Monday affirmed an order by Los Angeles Superior Court Judge William Fahey, confirming an arbitration award of more than $2.19 million to Quinn Emanuel Urquhart & Sullivan, LLP for its successful defense of a malpractice claim by developer Todd Kurtin. Quinn Emanuel had represented Kurtin between 2003 and 2007 in a dispute with his former partner, Bruce Elieff.
Presiding Justice Paul A. Turner, in an unpublished opinion for the Court of Appeal, said that Trope v. Katz (1995) 11 Cal.4th 274 does not apply to a tort claim. 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.
Justice Sandy Kriegler concurred, but Justice Richard Mosk argued that Trope applies and bars the award. The Trope opinion was authored by Mosk’s father, now-deceased Supreme Court Justice Stanley Mosk.
Quinn Emanuel and Kurtin had entered into a contingency agreement. The agreement required binding arbitration if a dispute arose from the parties’ relationship.
The agreement also provided that the law firm, if it prevailed, could recover compensation for the work by its employees in defending or prosecuting any arbitration or litigation arising from the attorney-client relationship.
In 2008, Kurtin served an arbitration demand on Quinn Emanuel for legal malpractice and contract breach. The arbitration was bifurcated into two phases: phase I concerned adjudication of the legal malpractice claim, phase II concerned unconscionability, causation and damages.
The hearing for phase I of the arbitration occurred on March 5 to March 8 and May 3 of 2012.
Quinn Emanuel represented itself using its own attorneys. On June 8, 2012, the arbitrator issued a partial award in favor of Quinn Emanuel which rejected all of Kurtin’s malpractice and contract breach claims.
In appealing Fahey’s order, Kurtin argued the arbitration award violated a fundamental public policy against pro se lawyers recovering their fees.
Turner, however, emphasized that §1717 provides for a reciprocal attorney fee award “[i]n any action on a contract.” The Supreme Court, the presiding justice noted, stated expressly in Trope that, “by its terms section 1717 applies only to contracts specifically providing that attorney fees ‘which are incurred to enforce that contract’ shall be awarded to one of the parties or to the prevailing party.’”
The public policy rationale of Trope need not be imported out of the §1717 context, Turner said.
“Our Supreme Court,” he wrote, “clearly limited the application of Trope to situations in which section 1717 applied.” He distinguished Musaelian v. Adams (2009) 45 Cal.4th 512, holding that a self-represented attorney could not recover attorney fees as sanctions under Code of Civil Procedure §128.7, as being limited to that specific statute.
Kurtin, he said, failed to identify any public policy reason as to why the arbitrator’s decision, based on the parties’ agreement, should be vacated.
‘American Rule’ Exception
Turner also cited Code of Civil Procedure §1021, which broadly permits parties to contract out of the “American rule” requiring that each party bear its own attorney fees.
Mosk argued in dissent that in Trope “the Supreme Court concluded that the Legislature expressed a policy that attorneys who represent themselves not be able to recover attorney fees,” and “did not except from such a principle situations in which the attorney fees clause provides for such recovery.” Because the arbitrator’s decision violated that public policy, it was in excess of the arbitrator’s authority and must be vacated, he argued.
Attorneys on appeal were Gary A. Waldron and Sherry S. Bragg of Weintraub Tobin for Kurtin and Quinn Emanuel’s Christopher Tayback, Joseph Sarles and David Pennington for the firm.
The case is Quinn Emanuel Urquhart & Sullivan v. Kurtin, B250245.
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