Taheri Law Group v. Sorokurs

Filed 9/27/07 Taheri Law Group v. Sorokurs CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

DIVISION THREE

APPEAL from an order of the Superior Court of Los Angeles County,

Michael S. Mink, Judge. Affirmed

Yevgeniya G. Lisitsa for Movant and Appellant.

Neil C. Evans for Defendants and Respondents.

_________________________

Movant and appellant Taheri Law Group (Taheri), former counsel for defendant and respondent Alexander Sorokurs and Alexander Sorokurs, Inc. (Sorokurs), appeals an order denying Taheris motion to intervene in an action, Samvalian v. Sorokurs (L.A. Super. Ct. No. EC037740). Taheri sought to intervene in order to bring a motion to vacate a global settlement in the action, on the ground the settlement failed to protect Taheris right to attorney fees.^[1]

The record reflects Taheri failed to seek intervention in a timely manner. Despite being aware of a pending motion by Sorokurs to enforce a settlement agreement (Code Civ. Proc.,  664.6),^[2]Taheri did not attempt to intervene at that juncture in order to object to enforcement of the settlement. It was only after the trial court granted the motion to enforce the settlement that Taheri sought leave to intervene, in order to bring a motion to vacate the settlement.

Accordingly, the order denying Taheris intervention motion is affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

1. The fee agreement between Taheri and Sorokurs.

On May 3, 2004, Sorokurs retained Taheri pursuant to a written fee agreement to represent Sorokurs in Samvalian v. Sorokurs, et al., including . . . counterclaims. The fee agreement included the following provision: In consideration of [Taheri] accepting a lower fee from the Client than otherwise would be charged for the services rendered under this Agreement, Client hereby irrevocably assigns to Attorney any fees or sanctions awarded by the court in connection with the subject matter of this representation. Such fees shall belong exclusively to Attorney and shall not affect Clients fee obligation under this Agreement.

2. The May 2005 mediation and settlement.

On May 16, 2005, a 10-hour mediation was held. Sorokurs attended the mediation and was represented by Taheri. Also present were plaintiffs and cross-defendants Angel Samvalian and Fardin Hakakian, along with their attorneys.

At the conclusion of the mediation session, the parties reached agreement. At the end of the day, a written stipulation for settlement was prepared and was signed by Sorokurs, Samvalian and Hakakian personally, as well as by their respective attorneys.^[3]

The stipulation for settlement, which stated the case has been settled pursuant to C.C.P. [ ] 664.6, called for plaintiffs to pay the sum of $125,000 to defendants. In addition, Sorokurs agreed to assume a certain real property lease in San Dimas and to deliver possession of the real property in the event he were to default on the real property lease payments. Also, the parties agree[d] to negotiate a full and complete release in good faith and that in the event of a dispute as to the terms of the settlement agreement, they agree[d] to return to the mediator for binding resolution of issues necessary to effectuate the intent of the parties in executing this agreement.^[4]

3. Subsequent attorney fee awards.

Notwithstanding the stipulation for settlement, the litigation persisted.

On May 27, 2005, two weeks after the mediation, Taheri, on behalf of Sorokurs, moved for attorney fees in case No. EC040382 and obtained an award of $36,720 in attorney fees which was reduced to judgment.

On September 29, 2005, Taheri, for Sorokurs, filed another motion for attorney fees and obtained an award of $33,180.67 in case No. LC067473.

4. Sorokurs discharges Taheri and retains new counsel.

On or about November 2, 2005, Sorokurs discharged Taheri and retained new counsel, Neil Evans.

On November 15, 2005, Taheri and the Law Offices of Gina Lisitsa (Lisitsa), as former attorneys of record for Sorokurs, filed a notice of priority lien in the amount of $538,337.75 for legal services rendered and costs and expenses advanced on Sorokurss behalf.

5. Sorokurs, represented by new counsel, moves to enforce the May 2005 stipulation for settlement.

On December 12, 2005, Sorokurs, represented by Evans, filed a motion to enforce the May 2005 global settlement of the various action between the parties. ( 664.6.) According to the moving papers, the parties had been unable to agree on the precise language of the settlement agreement and opposing counsel had taken the position that the stipulation for settlement was unenforceable.

Samvalian and Hakakian opposed Sorokurss motion to enforce the seven-month-old settlement, asserting: What Sorokurs fails to tell this Court is that he expressly revoked the Settlement Agreement and for the last seven months has litigated the underlying settled matters as if no agreement had ever been reached. Sorokurs also fails to inform this Court that since May 16, 2005, he has attained over $70,000 in awards and judgments for attorneys fees which he admits were the basis and impetus for the Settlement Agreement in the first place. His instant motion is little more than a veiled attempt to misuse the judicial process to attain a double recovery.

Samvalian and Hakakian further argued: [E]ven if Sorokurs motion did not suffer from these defects . . . the Settlement Agreement is unenforceable under . . .  664.6 . . . . It does not evidence the mutual consent of the parties, is missing critical material terms, was not signed by the parties who were to be bound, was made contingent on future events, and is not properly before the Court as it contains a provision requiring . . . such disputes be resolved by the mediator. The claimed Settlement Agreement is unenforceable because it was merely an agreement to agree and in the end, failed to effectuate the global settlement everyone came to the table to attain.

6. Taheri is notified of the pending motion to enforce the settlement.

On January 18, 2006, Sorokurss new attorney, Evans, notified Lisitsa (Taheris attorney and former co-counsel in the Sorokurs matter), that he was moving to enforce the settlement.

That same day, Lisitsa acknowledged receipt of said letter from Evans. Lisitsa did not object to the motion to confirm the settlement. Rather, in her response to Evans, she predicted your attempts in enforcing the settlement will fail and in conclusion, she stated Good luck on your endeavors with Mr. Sorokurs.

7. Trial court grants defendant Sorokurss motion to enforce the settlement.

On January 20, 2006, the matter came on for hearing and was taken under submission.

On January 26, 2006, the trial court issued an extensive order conditionally granting the motion to enforce the May 2005 settlement. The trial court ruled in relevant part:

A settlement agreement is not considered unenforceable under . . . Section 664.6 just because minor matters are left for future agreement. [Citation.] [] The Stipulation for Settlement signed by the parties hereto, states on its face that it is binding on the parties and is for the settlement of this case. The parties do not dispute that they voluntarily entered into this agreement, achieved with the assistance of a mediator, to wit, Ms. Janet Fields. The terms of the settlement include all of its major terms, including, the cash being paid, and the transfer of property, and the parties expressly agreed to return to the mediator for binding resolution of issues necessary to effectuate the intent of the parties in executing this agreement.

The courts tentative ruling in this matter was to deny the motion for summary enforcement on principles of equitable estoppel, based on the showing from the papers filed in opposition to the motion and from the entire court file, that Defendant [Sorokurs] in June of 2005 repudiated the settlement in writing and thereafter engaged in conduct inconsistent with the existence and enforceability of the settlement, including making direct representations to this court, as well as seeking affirmative relief through this litigation and other matters, which were encompassed within the Stipulation for Settlement.

Thereafter, however, at oral argument, [Sorokurss] counsel [i.e., Evans] stipulated, representing that he was doing so with the full authority of his client, that if this court were to grant the requested relief, [Sorokurs] would agree to be responsible for the costs and attorneys fees incurred by Plaintiffs [Samvalian and Hakakian] from the date that the settlement agreement was purportedly no longer being treated as effective, i.e., July of 2005, to the present. He also stated that [Sorokurs] would waive all awards for fees and costs obtained by him against the Plaintiffs in other lawsuits.

[] . . . []

The Court has reviewed the file in this matter and has determined that the date of the letter of repudiation, i.e., June 6, 2005 commenced the triggering of costs and fees by the Plaintiffs. In order for Plaintiffs to be in the same position they would have enjoyed had the settlement been properly treated as binding, all such fees and costs must be reimbursed to them.

If the Defendant [Sorokurs] in a pleading filed with the court on or before February 3, 2006, signed by both counsel and the Defendant personally and in all capacities in which he sued or was sued, with proof of service on Plaintiffs, acknowledges his agreement to make such reimbursement for the time period commencing as of June 6, 2005 to the date of this Order, then the Court will enter the terms of the agreement as a judgment. The parties will then be ordered to appear before the mediator, Ms. Janet Fields, for binding resolution of any remaining issues between the parties and also to determine and award to Plaintiffs, by set off or otherwise, all reasonable costs and attorneys fees incurred by Plaintiffs in defending this or any other action of Defendant which would have been encompassed in the global settlement, which were incurred between June 6, 2005 up to and including the date of this order.

[] . . . []

Plaintiff shall prepare the proposed Judgment and shall file and serve same no later than February 21, 2006.

8. After the trial court granted the motion to enforce the settlement, Taheri moved to intervene in the action for the purpose of attacking the settlement.

On February 16, 2006, Taheri filed a motion to intervene in case No. EC037740 to protect Taheris contractually explicit assignments that Defendant Sorokurs advised the Court that Defendant Sorokurs will be waiving, in hopes of a settlement and to protect the liens filed in this case as well as the ones in EC040382 and LC067347 [the two related cases], which the Court has implicitly stated that it will extinguish and render a nullity when the Court agreed to enforce the settlement without care to the liens that were filed . . . .

In addition, Taheri filed a motion to vacate the settlement and any judgment entered thereon on the ground Sorokurs had no right to waive attorney fees that were awarded and assigned to Taheri.

9. Trial court denied Taheris motion to intervene and took Taheris motion to vacate the settlement off calendar.

On March 24, 2006, Taheris intervention motion came on for hearing.^[5]

The trial court denied Taheris motion to intervene, ruling [p]rior counsel for defendants must bring a separate action to enforce its attorney services contract with the defendants, which it has evidently already done. In addition, prior counsel has failed to establish that it has any present interest in the subject matter of this case. There is no authority for an attorney to intervene to pursue a lien for fees; an independent action is necessary. [Citations.] Further filings by the Taheri Law Group in this action will be stricken by the court.

The trial court further ruled: In light of the denial of the motion to intervene, the moving parties have no standing to pursue a motion to vacate the judgment and the court order and judgment thereon in regard to the settlement agreement between the parties. Therefore, the motion to vacate is taken off calendar.

10. The instant appeal.

On April 19, 2006, Taheri filed a timely notice of appeal from the order denying leave to intervene.

11. During the pendency of this appeal, the fee dispute between Sorokurs and Taheri proceeded to a binding arbitration.^[6]

The fee dispute between Sorokurs and Taheri proceeded to a binding arbitration, initiated by Taheri. In the arbitration, Taheri sought recovery of $604,113.43 plus prejudgment interest for legal services performed while acting as counsel for Sorokurs. Sorokurs counterclaimed for malpractice, breach of fiduciary duty, violation of conflict of interest rules, breach of contract, fraud and declaratory relief.

On March 28, 2007, the arbitrator issued a 30-page decision which awarded Taheri the net sum of $34,196.60 against Sorokurs.

Taheri filed a petition in the superior court to vacate the award. On September 7, 2007, the trial court entered judgment confirming the arbitration award. (L.A. Super. Ct. No. BS100377; Evid. Code,  452, subd. (d).)

CONTENTIONS

Taheri contends the trial court erred in denying its motion to intervene in the action because Taheri has standing, and this court should reverse the order taking the motion to vacate the settlement off calendar.

DISCUSSION

1.General principles.

The focus of this appeal is the trial courts denial of Taheris motion to intervene in the action between Samvalian and Hakakian on the one hand, and Sorokurs on the other. As Sorokurss former attorney, Taheri sought to intervene in the litigation in order to attack the settlement agreement which the trial court already had enforced pursuant to section 664.6.

Section 387 providesfor intervention by a third party in existing litigation, upon timely application. The statute provides for permissive intervention, which is discretionary ( 387, subd. (a); Truck Ins. Exchange v. Superior Court (1997) 60 Cal.App.4th 342, 346) as well as for intervention of right, which is mandatory. ( 387, subd. (b); Hodge v. Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540, 547.)

Section 387 states in relevant part: (a) Upon timely application, any person, who has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both, may intervene in the action or proceeding. An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, or by uniting with the defendant in resisting the claims of the plaintiff, or by demanding anything adversely to both the plaintiff and the defendant, and is made by complaint, setting forth the grounds upon which the intervention rests, filed by leave of the court . . . . [] (b) If any provision of law confers an unconditional right to intervene or if the person seeking intervention claims an interest relating to the property or transaction which is the subject of the action and that person is so situated that the disposition of the action may as a practical matter impair or impede that persons ability to protect that interest, unless that persons interest is adequately represented by existing parties, the court shall, upon timely application, permit that person to intervene. (Italics added.)

Thus, [w]hether intervention is of right, or only permissive, the party seeking to intervene must make timely application to the court. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) 2:438, p. 2-71.)

2. Taheris failure to make timely application for intervention, before the trial court heard and approved Sorokurss motion to enforce the settlement under section 664.6, precludes relief.

Section 387 does not specify a time for intervention. However, unreasonable delay after learning of the action or the ground for intervention supports a denial of leave to intervene. [I]t is the general rule that a right to intervene should be asserted within a reasonable time and that the intervener must not be guilty of an unreasonable delay after knowledge of the suit. [Citations.] (Allen v. California Water & Tel. Co. (1947) 31 Cal.2d 104, 108.)

Here, on January 18, 2006, Sorokurss new attorney, Evans, notified Lisitsa (Taheris attorney and former co-counsel in the Sorokurs matter), that he was moving to enforce the settlement. That same day, Lisitsa acknowledged receipt of said letter from Evans. Lisitsa did not object to the motion to confirm the settlement. Rather, in her response to Evans, she predicted your attempts in enforcing the settlement will fail and in conclusion, she stated Good luck on your endeavors with Mr. Sorokurs.

Thus, when Taheri was notified of the pending motion to enforce the global settlement, Taheri evinced no desire to intervene in the action for purposes of objecting to the settlement. Taheri chose to stay on the sidelines, confident the trial court would deny the motion to enforce the settlement. It was only after the trial court granted Sorokurss motion to enforce the settlement that Taheri sought to intervene, in order to bring a motion to vacate the settlement. Having allowed the hearing on the motion to enforce the settlement to proceed without any input from him, Taheri cannot be heard to complain the trial court erred in enforcing the settlement.

As soon as Taheri was advised of the pending motion to enforce the settlement, Taheri could have sought intervention by way of an ex parte application and could have requested a stay of the pending motion to enforce the settlement.^[7] Instead, Taheri sat on the sidelines while the trial court granted Sorokurss motion to enforce the global settlement under section 664.6. Because Taheri failed to make timely application for intervention, prior to the grant of the motion to enforce the global settlement, the trial court properly denied Taheris intervention motion and properly took Taheris motion to vacate the settlement off calendar.

In an attempt to explain his failure to seek intervention until after the grant of the motion to enforce the settlement, Taheri asserts the motion to enforce the settlement did not contain any discussion of Sorokurss waiver of attorney fees assigned to Taheri, the waiver of attorney fees only arose during oral argument on the motion, and that had [Taheri] had notice of [Sorokurss] intent on waiving the attorneys fees assigned to [Taheri], [Taheri] would have appeared at the hearing for enforcement of settlement and stopped it dead in its tracks.

The argument is unpersuasive. Enforcement of the May 2005 global settlement as the final resolution of the litigation among the various parties was plainly inconsistent with enforcement of the subsequent attorney fee awards obtained by Taheri. (See fn. 4, ante.) Therefore, it was self-evident that enforcement of the settlement would have an impact on the attorney fee awards assigned to Taheri. Consequently, Taheri knew or should have known that the hearing on enforcement of the settlement would affect his pecuniary interest.

Because the intervention motion was untimely, it is unnecessary to address the merits of the intervention motion, the applicability of Epstein v. Abrams (1997) 57 Cal.App.4th 1159, or any other issues.

DISPOSITION

The order denying Taheris intervention motion is affirmed. Sorokurs shall recover costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

KLEIN, P. J.

We concur:

CROSKEY, J.

ALDRICH, J.

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Analysis and review provided by Spring Valley Property line attorney.

^[1] An order denying intervention is directly appealable because it finally and adversely determines the right of the moving party to proceed in the action. (Bame v. City of Del Mar (2001) 86 Cal.App.4th 1346, 1363; 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, 70, p. 126.)

^[2] All further statutory references are to the Code of Civil Procedure, unless otherwise indicated.

^[3] A written settlement agreement prepared in the course of, or pursuant to, a mediation, is admissible if the agreement provides it is admissible or subject to disclosure. (Evid. Code,  1123, subd. (a).) Here, the stipulation for settlement expressly states [t]his document is binding on the parties and is admissible in court pursuant to [E]vidence Code section 1123 et seq.

^[4] We note the stipulation for settlement did not provide for any payments of attorney fees or costs. Thus, enforcement of the mediation settlement would require Taheri to look solely to his client, Sorokurs, for payment. Taheri was a signatory to the stipulation and thus was aware of its terms. Therefore, Taheri was on notice that enforcement of the settlement agreement would preclude his subsequent recovery of attorney fees from Samvalian and Hakakian.

^[5] By the time Taheris intervention motion was heard, Sorokurs, as judgment creditor, had released judgment liens against Samvalian and Hakakian, in accordance with the global settlement.

^[6] Taheris fee agreement with Sorokurs included the following arbitration provision: If a dispute arises between Client and Attorney regarding Attorneys alleged malpractice in handling the said matter, or Attorneys fee for services and/or cost expenses in connection with the above referenced transaction, such dispute(s) shall be submitted to binding arbitration . . . . This includes any claim against Attorney for tort, malpractice, fraud, breach of contract, negligence, breach of fiduciary duty or other wrongdoing or breaches. (Italics added.)

^[7] In this regard, a leading practice guide states: A noticed motion gives the existing parties time to settle and dismiss the action before your motion can be heard. This would cut off your right to intervene, and could bar relief entirely if the statute of limitations has run. One alternative is to apply ex parte for an Order to Show Cause why leave to intervene should not be granted, and to include in the proposed order a stay of proceedings. Of course, you will have to notify opposing parties by telephone prior to making the ex parte application (CRC 3.1203(a); see9:352). (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) 2:442, p. 2-73.)