Marriage of Burnett
Filed 3/9/07 Marriage of Burnett CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
In re the Marriage of J. MARK and DIANNE J. BURNETT.
(Los Angeles County
Super. Ct. No. BD376427)
TROPE AND TROPE,
J. MARK BURNETT,
APPEAL from an order of the Superior Court of Los Angeles County, Marjorie S. Steinberg, Judge. Reversed with directions.
Trope and Trope, Thomas Paine Dunlap and Sorrell Trope for Appellant.
Cuneo & Hoover, J. Nicholas Cuneo and John Adam Lazor for Respondent.
This is a family law proceeding involving a mothers postjudgment order to show cause (OSC) to modify child support. The issue presented is whether the mothers former counsel had standing to seek an award from the father for the attorney fees she incurred in connection with the proceeding.
In 2001, before the parties separated, the father met with an attorney from Trope and Trope (Trope) and obtained advice about filing for divorce. During a one-hour meeting, the issue of child support was discussed. The father did not retain the firm. In 2003, the trial court entered a judgment for legal separation, fixing the amount of child support. In 2005, Trope, representing the mother, filed the present OSC, seeking an increase in child support. The father moved to disqualify Trope based upon the 2001 consultation. The trial court granted the motion, finding a violation of the Rules of Professional Conduct.
Trope filed a motion seeking attorney fees from the father. The mother did not object to the motion. The father opposed it, arguing that Trope did not have standing to bring the motion and, in addition, the firms ethical violation precluded an award of fees. The trial court ruled that Trope had not acted unethically in undertaking to represent the mother, so the firms conduct did not bar or limit recovery. But the court concluded that Trope lacked standing to bring the motion because the mother had not expressly consented to it.
We conclude that Trope had standing to seek attorney fees from the father because the mother consented, at least impliedly, to the bringing of the motion. Further, on remand, the trial court shall decide whether the reason for Tropes disqualification was serious, such that the firm should be denied some or all of its fees. If a fee award, partial or whole, is appropriate, the trial court must then decide whether the father should pay some or all of it. In that regard, the court shall determine whether the amount sought by Trope is reasonably necessary and whether payment by the father would be just and reasonable in light of the relative circumstances of the parties. We therefore reverse the order and remand for further proceedings.
On May 14, 2001, Mark Burnett, a television producer, met for an hour with Sorrell Trope, Esq. (Sorrell), an attorney with Trope, to discuss the possible dissolution of Marks marriage to Dianne Burnett. Mark discussed the financial details of his marriage, including his various television programs and his net worth. Mark said he wanted shared legal and physical custody of his two sons. Sorrell gave Mark advice on whether or not to file for divorce and discussed issues relating to child support, spousal support, and child custody. Sorrell advised Mark to send a letter of separation to Dianne. Mark followed that advice six weeks later but, ultimately, did not retain Sorrell or Trope.
In September 2002, Mark initiated this case by filing a petition for legal separation. In December 2003, the trial court entered a judgment for legal separation, setting the amount of child support at $12,500 per month in total.
Thereafter, by letter dated February 15, 2005, Sorrell, representing Dianne, wrote to Marks attorney, stating that Dianne wanted an increase in child support and preferred to resolve the matter informally. The parties executed three stipulations to preserve the retroactivity of any increase in child support to February 15, 2005. They also engaged in settlement discussions.
On April 6, 2005, Marks attorney sent a letter to Sorrell, stating that Mark had recently told him about the May 2001 meeting in which Sorrell gave Mark legal advice. The letter asserted that Sorrell was therefore disqualified from representing Dianne and asked that he withdraw from the case. By letter dated April 12, 2005, Sorrell declined to withdraw, in part because [t]he circumstances today are totally different from any possible circumstances which existed four years ago.
On May 26, 2005, Dianne, represented by Trope, filed an OSC and supporting papers in the case, seeking (1) an increase in child support and (2) an award of attorney fees and costs in connection therewith. Dianne stated in a declaration that she had paid Trope a retainer of $25,000 and had incurred attorney fees and costs totaling $13,868.13 through January 2005. She submitted invoices from Trope to substantiate her claim for fees and costs.
On June 3, 2005, Mark filed a motion and supporting declarations to disqualify Trope. The motion was based on rule 3â€‘310(E) of the Rules of Professional Conduct (Rule 3â€‘310(E)), which states: A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment. In his memorandum of points and authorities, Mark asserted: [T]here is absolutely no doubt that there is an absolutely identical relationship, let alone substantial relationship, between the subject matter of the prior representation of [Mark] by Trope and Trope and their current representation of [Dianne] because this matter is the very same proceeding involving many of the same issues discussed by [Sorrell] and [Mark].
In opposition, Trope filed declarations as well as points and authorities. The firm argued that [n]one of the information conveyed to Sorrell Trope in 2001 is relevant to the current proceeding. (Italics and boldface omitted.) It also contended that the prior relationship between it and Mark had been tenuous and fleeting at best. And the 2001 meeting involved pre-separation concerns while the current proceeding raised postjudgment issues.
Sorrell took notes during the meeting, which contained statistical information such as [Marks] address and phone number, his and his wifes ages, . . . their date of marriage and the fact that they were not yet separated, the names and ages of the parties children, a reference to a date of marriage financial statement, the parties rough net worth and [Marks] income after taxes in 2001. There [was] also a reference to the fact that [Mark] had told his wife that he was not happy but that she did not respond to his problems.
At a hearing on August 2, 2005, the trial court disqualified Trope, finding that: (1) there had been an attorney-client relationship between Trope and Mark; (2) Mark had imparted confidential information to Trope about his financial situation, a subject that had a substantial relationship to the pending OSC; and (3) Dianne would not suffer any prejudice from the disqualification because the hearing on the OSC could be continued until she found new counsel. The trial court commented that its decision was corroborated by Sorrells notes and that as we all know, current income may well implicate past income and past financial circumstances. The court acknowledged that the disqualification issue was a tough one and not a clear-cut matter at all, but added, its the same the issue of child support was clearly an issue when [Sorrell] met with [Mark]. So its the same issue. At the end of the hearing, the court continued the OSC to October 17, 2005.
Before Diannes new counsel filed a substitution form, Trope filed a motion for attorney fees. Pending a ruling on the motion, Trope transferred Diannes $25,000 retainer to her new attorneys, Jaffe and Clemens (Jaffe). Dianne incurred a total of $97,205 in fees and costs with Trope. Of that amount, Trope estimates that $55,175 was attributable to pursuing the increase in child support; $24,597 was incurred in opposing the motion to disqualify; $14,621 was incurred on the petition for writ of mandate; and $2,812 was related to the attorney fee motion itself. The hearing on the motion was continued until the hearing on the OSC.
Mark filed opposition to the motion, contending that Tropes disqualification barred all recovery on public policy grounds. He also argued that the amount sought was not reasonably necessary.
In response, Trope submitted a declaration from an expert in the field of lawyers professional responsibilities, who opined that Trope had not engaged in serious misconduct or acts incompatible with the faithful discharge of duties.
On November 2, 2005, Jaffe filed a substitution of attorney form. The OSC was heard on January 17, 2006. At the hearing, the trial court announced that it was increasing child support from $12,500 to $40,000 per month, retroactive to February 1, 2005. The court then heard argument on the attorney fees sought by Trope and Jaffe, respectively. In addition to Tropes request for $97,205, Jaffe sought $47,000. After argument, the court took the attorney fee matter under submission.
On February 3, 2006, the trial court issued its decision, as follows. Mark owned a home for which he had paid $25 million in cash. Diannes assets totaled around $10 million. Marks monthly income was $4.3 million; Diannes was $15,012. The attorney fees and costs sought by Jaffe were reasonable and necessary. Jaffe had received Diannes $25,000 retainer from Trope. Because Marks income was almost 300 times that of Dianne, and because he had more than twice the assets she had, he was responsible for 90 percent of Jaffes fees and costs: He was to pay Dianne $22,500 to reimburse her for the $25,000 retainer and was to pay Jaffe $19,838.
With respect to Trope, the trial court found that Tropes disqualification did not affect its recovery of fees because, in the trial courts words, the court has already found that Trope . . . had not acted unethically in accepting the representation of [Dianne] and therefore it cannot find that there has been a serious violation of [Tropes] responsibilities in this case. Nevertheless, the court concluded that Dianne had not made clear whether she consented to Tropes fee motion, thereby depriving Trope of standing to bring it. Accordingly, the court ruled that Mark did not have to pay Trope anything. The court retained jurisdiction, stating that Dianne could afford to pay Trope, and if she ever did so, Mark could then be required to reimburse her, if appropriate.
Trope filed an appeal.
In a proceeding for . . . legal separation of the parties, and in any proceeding subsequent to entry of a related judgment, the court shall ensure that each party has access to legal representation to preserve each partys rights by ordering, if necessary based on the income and needs assessments, one party . . . to pay to the other party, or to the other partys attorney, whatever amount is reasonably necessary for attorneys fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding.
. . . Whether one party shall be ordered to pay attorneys fees and costs for another party, and what amount shall be paid, shall be determined based upon, (A) the respective incomes and needs of the parties, and (B) any factors affecting the parties respective abilities to pay. (Fam. Code, 2030, subds. (a), (b).) The making and amount of the award must be just and reasonable under the relative circumstances of the parties. (Id., 2032, subd. (a).)
Where the court orders one of the parties to pay attorneys fees and costs for the benefit of the other party, the fees and costs may, in the discretion of the court, be made payable in whole or in part to the attorney entitled thereto. (Fam. Code, 272.)
We review the trial courts ruling on a motion for attorney fees and costs for an abuse of discretion. (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 768769; In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.)
A. Tropes Standing To Move for Attorney Fees
In a family law case, an attorney who has been discharged by the client may thereafter file a motion seeking attorney fees and costs directly from the opposing party, as long as the attorney is still counsel of record and has the former clients express or implied consent to bring the motion. (In re Marriage of Borson (1974) 37 Cal.App.3d 632, 637638 (Borson).) The trial court need not rule on a so-called Borson motion before new counsel files a substitution form. (See In re Marriage of Simpson (2006) 141 Cal.App.4th 707, 709.) A Borson motion is typically deemed to be made on behalf of the former client because it avoid[s] a circuity in litigation [former counsel] suing [the wife for fees] and she then ask[s] the court to order [the husband] to pay what she has paid. (Borson, supra, 37 Cal.App.3d at p. 638.) But if the former client does not give express or implied consent to the motion, the trial court may not entertain it. (See In re Marriage of Simpson, supra, 141 Cal.App.4th at pp. 712713; In re Marriage of Read (2002) 97 Cal.App.4th 476, 481 [motion not proper where wife filed notice with trial court withdrawing fee request and also objected to trial judges signing order awarding fees].)
In this case, Diannes OSC requested an increase in child support and an award of attorney fees and costs in seeking the increase. With the OSC, she submitted a declaration discussing the $25,000 retainer paid to Trope and the fees incurred as of January 2005, and she attached supporting invoices from Trope. She did not say or do anything thereafter that would question her continuing interest in obtaining a ruling on her request that Tropes fees be paid. As noted, Trope filed the OSC and its Borson motion while it was still Diannes counsel of record. At the hearing on the OSC and attorney fees, Diannes new counsel stated that she had not told them whether she consented to Tropes motion. Nevertheless, Dianne was present in the courtroom at that time and expressed no opposition.
Diannes lack of an objection indicated her implied consent to Tropes motion for attorney fees. (See Borson, supra, 37 Cal.App.3d at pp. 637639; In re Marriage of Simpson, supra, 141 Cal.App.4th at p. 712.) And she had expressly requested that Trope be awarded fees in the initial OSC papers. We therefore conclude that the Borson motion was brought on Diannes behalf with her express or implied consent and the trial court erred in concluding otherwise. Further, although the Borson motion was brought after Trope was disqualified, Trope filed the motion while it was still counsel of record, and it retained the limited authority to wind up the attorney-client relationship by seeking attorney fees on Diannes behalf. (See Borson, supra, 37 Cal.App.3d at p. 637; Epley v. Califro (1958) 49 Cal.2d 849, 854.)
The trial courts denial of the motion based on Tropes purported lack of standing means that Trope must bring an independent action against Dianne if it wants to recover its attorney fees, and, if Trope is successful in that effort, Dianne will then have to appear before the trial court to request that Mark reimburse her the very circuity of litigation that a Borson motion was intended to avoid. For all of these reasons, the trial court shall reach the merits of the motion on remand.
B. Tropes Representation of Dianne
The trial court disqualified Trope, yet stated in its written ruling on the motion for attorney fees that Trope had not done anything unethical in undertaking to represent Dianne and therefore it could not find that there had been a serious violation of Tropes responsibilities in the case. We are puzzled by this comment. In disqualifying Trope, the trial court found that the firm had violated Rule 3â€‘310(E) and that the same issue child support was the subject of both Sorrells 2001 meeting with Mark and Tropes 2005 OSC on behalf of Dianne. For purposes of this appeal, the ruling on the disqualification motion established that Trope had engaged in some kind of unethical conduct.
It is settled in California that an attorney may not recover for services rendered if those services are rendered in contradiction to the requirements of professional responsibility. . . . Fraud or unfairness on the part of the attorney will prevent him from recovering for services rendered; as will . . . acts of impropriety inconsistent with the character of the profession, and incompatible with the faithful discharge of [the attorneys] duties. . . . Contracts to render such services even if not tainted with actual fraud have been held to be clearly against public policy and void. (Goldstein v. Lees (1975) 46 Cal.App.3d 614, 618 (Goldstein), italics omitted.)
The rule that an attorney who engages in conflicting representation without obtaining informed consent is not entitled to compensation is not based on the premise that the attorney must pay a penalty so much as on the principle that payment is not due for services not properly performed. (Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1, 14, fn. 2.) Nor is there any force to the objection that the [denial of attorney fees] will work a windfall for [the former client]. . . . [I]t is enough to say that [c]ourts do not sit to give effect to . . . illegal contracts. (Goldstein, supra, 46 Cal.App.3d at pp. 623624.)
In Goldstein, supra, 46 Cal.App.3d 614, a corporation had retained an attorney as outside counsel beginning in February 1965. From April 1967 to October 1969, the attorney served as corporate, or in-house, counsel to the corporation. In 1971, the attorney undertook representation of a minority shareholder in a proxy fight to gain control of the corporation. The attorney knew the operations of the corporation intimately and his knowledge of corporate secrets [was] material to the proxy fight. (Goldstein, supra, 46 Cal.App.3d at pp. 617, 618.) The attorney frankly admitted that his insight into the facts was the reason he decided to undertake the representation. (Id. at p. 618.) In a subsequent suit by the attorney against the minority shareholder to recover attorney fees, the Court of Appeal, relying in part on the predecessor rule to Rule 3â€‘310(E), held that such representation is improper and that a contract to provide such services is void for reasons of public policy. (Id. at p. 617; see id. at pp. 618619 & fn. 3, 623.)
Mark argues that under Goldstein, disqualification for a violation of Rule 3â€‘310(E) always mandates a denial of attorney fees. We do not read Goldstein so broadly. That case involved an attorney who, having served as corporate counsel for years, turned against the corporation in a takeover attempt. (See Goldstein, supra, 46 Cal.App.3d at pp. 617, 618.) As Goldstein declared, Conflicts of interest such as these cannot be tolerated. (Id. at p. 623.)
In Pringle v. La Chapelle (1999) 73 Cal.App.4th 1000, an attorney represented a corporation and one of its employees as defendants in a sexual harassment suit. Actual conflicts of interest existed between the two clients that they attempted to waive by written consent, as required by Rule 3â€‘310(E). In a subsequent suit by the attorney against the clients for attorney fees, the jury found for the attorney. The Court of Appeal affirmed, stating: [The case law] seems to suggest there must be a serious violation of the attorneys responsibilities before an attorney who violates an ethical rule is required to forfeit fees. . . . On the record presented, we cannot ascertain if the purported violation of the rules was serious, if any act was inconsistent with the character of the profession, or if there was an irreconcilable conflict of interest. (Pringle v. La Chapelle, 73 Cal.App.3d at p. 1006.) The court pointed out that a violation of a rule of professional conduct does not automatically preclude an attorney from obtaining fees. (Id. at pp. 10051006.)
In A.I. Credit Corp., Inc. v. Aguilar & Sebastinelli (2003) 113 Cal.App.4th 1072 (A.I. Credit), a law firm had represented the same client for several years and served as the clients general, business and claims counsel. (Id. at p. 1074.) After they parted ways, the firm sued the former client on behalf of a new client. The former client moved to disqualify the firm based on Rule 3â€‘310(E), alleging the firm possessed confidential information about him and was acting out of a corrupt motive of passion or interest (Bus. & Prof. Code, 6068, subd. (g)). The trial court granted the motion, stating: [T]here seemed to be a lot of prior representation, a lot of fees and, therefore, [by] implication, a lot of confidential information. (A.I. Credit, supra, 113 Cal.App.4th at p. 1079.) The new client then filed suit against the firm, seeking a declaration that the firm was not entitled to any fees based on the disqualification. The trial court agreed and the Court of Appeal affirmed, holding that the disqualification was not based on a mere technical violation of ethical rules. (Ibid.)
In Sullivan v. Dorsa (2005) 128 Cal.App.4th 947, the court held that the attorney was entitled to fees where the plaintiffs fail[ed] to show that any violation of the rules governing representation of adverse interests was serious enough to compel a forfeiture of fees. Insofar as these questions were entrusted either to the trial courts discretion or its factfinding powers, we cannot substitute our judgment for the trial courts except on a clear showing that those powers were abused. (Id. at pp. 965966.)
In sum, on remand, the trial court shall determine whether Tropes ethical violation was serious, such that its recovery of attorney fees and costs should be barred or reduced.
C. Reasonable and Necessary Fees
Assuming the trial court decides that the ethical breach is not a complete bar to recovery, it will then have to decide whether Tropes attorney fees and costs, or a portion of them, are reasonably necessary.
Mark contends that the fees and costs incurred by a parent here, Dianne in losing a motion to disqualify should never be paid by the prevailing parent. Not so. The cost of legal work performed in opposing a motion to disqualify is not singled out for automatic denial. A party in a family law proceeding has an important right to counsel of his or her choice. (See Zimmerman, supra, 16 Cal.App.4th at pp. 562563.) And a loss in opposing any motion is only one factor to consider in determining the amount of fees to award. (See In re Marriage of Keech (1999) 75 Cal.App.4th 860, 870.) Many factors apply in determining whether the attorney fees and costs were reasonably necessary. (See Fam. Code, 2030; In re Marriage of Keech, supra, 75 Cal.App.4th at pp. 870871.) And whether Mark should have to pay some or all of those expenses depends on whether that result would be just and reasonable in light of the relative circumstances of the parties. (See Fam. Code, 2032.)
In conclusion, the trial court erred by not considering the Borson motion on the merits and shall do so on remand. The court shall first decide whether Tropes ethical violation was serious, such that its recovery of fees and costs should be barred or reduced. If the violation acts as a bar, Trope is not entitled to any recovery, and the motion should be denied. If an award in some amount, partial or whole, is found proper, the court must then decide whether that amount was reasonably necessary, and if so, whether Mark should pay any or all of it.
The order denying Trope and Tropes motion for attorney fees and costs is reversed. On remand, the trial court shall first decide whether Trope and Tropes ethical violation was serious, such that its recovery of attorney fees and costs should be barred or reduced. If the violation acts as a bar, the motion should be denied. If an award in some amount, partial or whole, is found proper, the court must then decide whether that amount was reasonably necessary, and if so, whether Mark Burnett should pay any or all of it. (See Fam. Code, 2030, 2032.) Trope and Trope is entitled to costs on appeal. Any request for appellate attorney fees shall be presented to the trial court. (See Cal. Rules of Court, rule 8.276(c)(2).)
NOT TO BE PUBLISHED.
MALLANO, Acting P. J.
Publication Courtesy of California attorney referral.
Analysis and review provided by Vista Property line Lawyers.
Although the order of disqualification was appealable (see Meehan v. Hopps (1955) 45 Cal.2d 213, 215217; Faughn v. Perez (2006) 145 Cal.App.4th 592, 600601), no appeal was taken. The trial courts findings on disqualification are accordingly final.