JACKSON v. COCHRAN FIRM

No. B221850.

BETTY JACKSON, as Conservator, etc., Plaintiff and Appellant, v. THE COCHRAN FIRM, Respondent.

Court of Appeals of California, Second District, Division Seven.


Attorney(s) appearing for the Case

Sirkin Law Group and Mina N. Sirkin for Appellant Betty Jackson.

The Cochran Firm and Brian T. Dunn for Respondent.

Hicks, Mims, Kaplan & Burns and Stewart S. Mims for Conservatee Sandra Griffin.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WOODS, J.

INTRODUCTION

In ruling on a conservator's petition for approval of compromise of a pending action to which a disabled person was a party (Prob. Code, § 3601), the trial court determined the law firm representing the conservatee was entitled to its "negotiated" 40 percent contingency fee, and that the conservator's claims of malpractice and breaches of fiduciary duty and alleged ethical violations should be resolved in a separate action. The conservator appeals, claiming (1) case law requires the trial court to address issues of negligence and breaches of ethical norms when authorizing and directing the payment of reasonable legal fees and (2) when a contingent fee agreement is voidable for ethical violations, it cannot be enforced indirectly through quantum meruit. Because the trial court failed to determine the validity of the fee agreement providing for a 40 percent contingency fee notwithstanding the conservator's challenge to the agreement, we reverse.

FACTUAL AND PROCEDURAL SUMMARY

On September 10, 2006, Sandra Griffin, sustained serious injuries in an automobile collision when the car she was driving was struck by a Los Angeles Police Department vehicle. On September 20, her sister (Betty Jackson, now Griffin's conservator) and parents (Minnie Griffin and DeWitt Griffin) executed an "Attorneys' Contingency Fee Retainer Agreement" with The Cochran Firm (the Firm).1 The agreement provided for payment of attorney's fees in the amount of 40 percent of gross recovery (if obtained after the filing of a lawsuit).2

On October 17, Griffin was discharged from Rancho Los Amigos National Rehabilitation Center, having "improved to a Rancho Level of Cognitive Functioning VII-Automatic/appropriate." Griffin was noted to be "able to communicate her wants and needs to therapist" and was "alert and oriented x 3," but "may have continued difficulty with more complex problem-solving . . . ." Ten days later, on October 27, Sandra Griffin signed a special power of attorney appointing Jackson her "true and lawful attorney to act for [her] and in [her] name, place and stead and for [her] use and benefit: (a) For any and all purposes as they relate to litigation for personal injuries arising out of the automobile accident occurring on September 10, 2006."

On March 5, 2007, the Cochran Firm filed a complaint against the City of Los Angeles (and another defendant) on Griffin's behalf. Prior to trial, the City offered no more than $500,000 to settle the case, and upon her counsel's advice, Jackson rejected the City's offer. The City disputed both liability and damages. (It was undisputed Griffin was not responsible for the accident, but the City argued another defendant (Mendez) was responsible instead of the City.) Fifteen experts testified and the Firm spent more than $100,000 on expert witnesses alone. Also, as Griffin was uninsured at the time of the collision, Griffin was statutorily precluded from recovering damages for pain and suffering, disfigurement, emotional distress and any other non-economic damages. (Civ. Code, § 3333.4.) At trial, the City presented a sub rosa surveillance video which showed Griffin moving and walking without difficulty and engaging in a conversation and exchange with someone in a manner inconsistent with her presentation at trial. (Footage of Griffin engaging in what appeared to be an "[il]licit drug transaction" was excluded over defense objection.)

The jury awarded Griffin $6,872,001. The City moved for new trial and, when the motion was denied, filed notice of appeal on October 27, 2008. Through November, December and January 2009, the City and the Firm engaged in settlement discussions, and in early February 2009, Brian Dunn executed a settlement agreement in the amount of $4.5 million on Griffin's behalf. The Firm then filed and obtained a dismissal.

Jackson later sought appointment as Griffin's conservator and, through her new counsel, moved to set aside the dismissal. In her declaration, Jackson said Brian Dunn of the Firm had advised her not to seek a conservatorship for Griffin; she was not presented with a copy of the proposed settlement agreement for her signature and approval in any representative capacity; no one at the Firm had advised her that "contingency fees in disabled persons cases were limited to 25 [percent] and that any fee had to be approved by the court;" she was surprised to learn of the filing of the dismissal after the Probate Court questioned the validity of the proposed settlement at a special needs trust hearing in May; she believed Dunn had misled her not to seek a conservatorship to prevent the court from reviewing its requested 40 percent fees; and the Firm had knowledge of Griffin's disability and failed to obtain proper signatures on the settlement or have the settlement properly approved. The Firm did not oppose the motion, and the trial court reinstated jurisdiction for the purpose of holding a compromise hearing pursuant to Probate Code section 3601 and to determine the fees due the Firm; the settlement of $4.5 million was not challenged.

In October 2009, Jackson filed a Petition to Approve the Compromise of the Disposition of Proceeds of Judgment, in which she challenged the compensation due the Firm, arguing it was either due nothing or no more than 25 percent of the settlement for its negligence, legal malpractice, breaches of fiduciary duty, fraud, financial abuse and ethical violations. In support of a 25 percent cap on fees, Jackson relied on Los Angeles Superior Court rule 10.79(c)(3) which provided: "Except where good cause is shown, the attorney's fee shall not exceed an amount equal to 25 percent of the gross proceeds of settlement . . . ."3

In her petition, Jackson (as conservator of Griffin's estate), specifically asserted: "The Conservator does not have any fee agreement with the Cochran Firm." She said she signed the fee agreement as an individual when Griffin was incapacitated. As a result, she said, the agreement did not comply with Business and Professions Code section 6147 and was voidable. She also wanted fees and costs "offset by the damages caused by the Firm and its employees who acted negligently and/or breached their fiduciary duty to Sandra Griffin." She further requested the court's "instructions as to the scope of the court's authority and issues to be determined in the compromise proceeding" as "this Court has clear statutory authority to approve a settlement and determine a reasonable amount of attorney's fees in this compromise proceeding, but the statutory provisions do not authorize the Court to resolve issues such as negligence, breach of duty or constructive fraud by the Cochran Firm. Moreover, instructions are warranted to avoid any res judicata implications." Attachments to the petition included a Notice of Decision, dated September 26, 2008, stating that for purposes of her application for supplemental social security income, Griffin was determined to be disabled as of October 20, 2006 (the date her application for such income was filed).

The Firm filed opposition, arguing "good cause" was shown for its 40 percent contingency fee, supported by declarations from Dunn and Joseph Barrett of the Firm as well as declarations from attorneys Garo Mardirrosian, Arash Homampour and C. Michael Adler stating that a contingency fee of 40 percent is the standard fee in representing plaintiffs in traumatic brain injury cases and explaining why. Further, the Firm argued, Jackson (Griffin's recently appointed conservator) had executed the contingency agreement with the Firm, and as of October 27, 2006, had "power of attorney" to represent her sister's interests "for all purposes as they relate to litigation for personal injuries arising out of the automobile accident of September 10, 2006."

According to Dunn's declaration, when the Firm was retained, Griffin had no conservator, she had never been adjudged disabled by any agency and she was not receiving Social Security benefits. In the early months of litigation, she frequently conversed with the Firm about her case, "leading us to believe she was mentally competent to understand the litigation process and the nature of the case." When Griffin executed the power of attorney granting her sister (Jackson) power of attorney in all aspects of the litigation, this was done "at the request of Betty Jackson and Sandra Griffin. We believed this was primarily due to her lack of mobility and physical disabilities, and it appeared to us that [Griffin] has the full capacity to execute a power of attorney to her sister prior to the commencement of the litigation." However, as the Firm argued (in opposition to defense testimony Griffin was malingering) and the jury agreed, he said, Griffin regressed. Dunn also said he executed the settlement agreement on Griffin's behalf because Jackson unequivocally consented to the amount and terms of the settlement and unequivocally confirmed a protracted appeal was not her wish nor in Griffin's best interests.4

At the hearing on the petition, noting the Firm had obtained a "very favorable verdict under extremely adverse conditions," the trial court commented: "I was the trial judge. I saw what was going on. I saw what the issues were. And this was not a slam dunk case by any stretch of the imagination." Jackson's counsel argued "on the issues of the attorney's fees and costs of the Cochran Firm, I think there's an issue of an offset. [Y]our ruling regarding that will have a bearing on the malpractice case that's been filed." The court responded, "I know. I read your brief on that subject. You're concerned about collateral estoppel and res judicata issues, and rightly so, and I'm going to try to navigate my way through those waters as best I can while still doing what I think my responsibilities require that I do."

On November 17, 2009, the trial court issued a nine-page ruling on the petition for approval of compromise. As relevant, the court stated: "This petition for approval of a settlement in favor of an adult conservatee is brought on by Betty Jackson (`Jackson,' or `Petitioner'), a person who was appointed conservator over the person and estate of plaintiff Sandra Griffin in April and June of 2009, respectively. The appointments took place after the jury verdict (July 31, 2008) in Ms. Griffin's personal injury action against the City of Los Angeles (`City'), after the City filed a notice of appeal (October 27, 2008), and after settlement of all claims as between City and Griffin in February of 2009. Counsel for the conservator, trial counsel for Ms. Griffin, The Cochran Firm (`the Firm'), and trial counsel for the City, the City Attorney, appeared at the hearing upon the petition on November 12, 2009. The court heard from all counsel, and the matter was submitted for decision by the court. Here now is the court's ruling.

"A. The Petition is Incomplete. The court approves the settlement agreement between the City and Ms. Griffin in the total amount of $4,500,000, subject to the City's modification to include a provision whereby the City guarantees payment of the full agreed-upon amount. . . .

"The petition, however, as submitted for review on November 12 is denied as incomplete insofar as there is no provision for (a) the amount of attorney's fees to be paid to the Firm, (b) the amount of costs recoverable by the Firm, (c) the amount and accounting for settlement proceeds from the settlement agreement between Ms. Griffin and defendant Mendez, (d) the amount of costs attributable to the Mendez settlement and recoverable as costs by the Firm, (e) the total amount of costs and expenses claimed by and on behalf of Petitioner, and (f) the grade and quality, including interest rates, of annuities to be purchased on behalf of conservatee.

"Petitioner's counsel is ordered and directed to revise and amend the petition for approval by supplying the information just identified as and for trial counsel's fees and costs and the conservator's claimed costs and expenses in accordance with the court's directives discussed below. Once submitted, the revised petition will be reviewed by the court's probate counsel with recommendations and for ruling by the court.

"B. Attorney Contingency Fee. (i) Attorneys Fees. The court now settles and awards to the Firm all claimed attorneys fees, up to 40 [percent] of the gross amount of both settlements, incurred in prosecution of Ms. Griffin's claims through the date of settlement with the City, assuming that the settlement with the City occurred after settlement with Mendez. The Firm shall not claim, and will not be awarded, costs and fees incurred in resisting Petitioner's efforts to diminish or defeat the Firm's claimed 40 [percent] contingent fee. The court finds that Petitioner's challenge to the Firm's fees and costs was both reasonable and necessary under the circumstances, and that, for reasons of equity and in the interests of justice, the costs and fees of the Firm in resisting the Petitioner's challenge should be borne by the Firm in their entirety, and not shifted in whole or in part to Petitioner. This ruling however, does not constitute a finding that Petitioner's claims of malpractice and ethical violations are meritorious; rather, it only constitutes a finding that Petitioner's challenge was in good faith, and aimed at resolving an important question in an uncertain area of the law. . . .

"C. Alleged Breaches of Ethical Norms and Malpractice. Petitioner included in her original, now rejected petition, her challenge to fees and costs on the ground of the alleged breaches of ethical and professional duties by the Firm. The court will not rule upon these claims, in part because Petitioner presents no supporting evidence on the point, and in part because those allegations and claims are best resolved in a separate action. (The evidence of cognitive impairment was the same evidence that the Firm presented at trial, the same evidence that was disputed by the City's evidence.) The court does not consider or adjudicate, in approving the fees and costs claimed, the Firm's alleged negligence or alleged breaches of ethical norms.

"The court's decision to award counsel's claimed fees is based wholly upon the nature of the case and the trial court's first hand observations of conduct of counsel and the parties at trial. The totality of the circumstances exclusive of Petitioner's unproved claims of negligence and breach of fiduciary duties fully justify the claimed compensation. The court's decision to award the Firm its 40 [percent] contingency fee is not based upon the Firm's compliance, or non-compliance, with the standard of care relative to trial counsel situated similarly to the Firm in its representation of Ms. Griffin.

"The circumstances upon which the court approves the Firm's fees, in summary form, include the following. First, there was no conservator appointed during the pendency of trial, and the question of whether a guardian ad litem should be appointed was never before the court. There was no dispute that the brain injury had resulted in some cognitive deficits to Ms. Griffin. But the degree of impairment was hotly contested by the parties, and the jury could have justifiably concluded on the defense expert evidence that Ms. Griffin was simply malingering, and feigning her cognitive impairment, and could have concluded that any impairment of cognitive ability did not merit compensation in the amounts claimed by trial counsel, or in any amount, on Ms. Griffin's behalf. The trial court could not say then or now, on the basis of the evidence presented at trial, that Ms. Griffin was so impaired mentally that a guardian ad litem should have been appointed, had the issue been raised in pretrial proceedings or at trial.

"Next, the court finds that a 40 [percent] contingency fee, on this record, is not unreasonable, and is supported by uncontroverted evidence in declarations submitted by the Firm. The risk of recovering nothing was significant. Not only did the defense experts offer evidence tending to prove Ms. Griffin was not mentally incompetent, but the jury also heard that Ms. Griffin lived in public housing, had a history of mental illness and a history of drug abuse. A video shown to the jury also depicted what the trier of fact could have reasonably concluded was a drug purchase by Ms. Griffin. This kind of evidence can inflame a jury against a plaintiff, and, though not legally permitted, result in an adverse verdict.

"Finally, the level of difficulty in getting the case to trial and then to verdict, including the enormity of the costs for experts and trial preparation, born[e] exclusively by the Firm, fully warrants the amounts claimed as fees. For this reason, the court will entertain no further challenge to the 40 [percent] contingency fees claimed by the Firm.

"D. Additional Orders Attachment 20. Petitioner asks that certain orders be added to the order approving the compromise. . . .

"Another proposed order is that settlement funds paid by defendant Mendez be paid into the trust, without any reduction to compensate the Firm. But there is no reason, and certainly no evidence to support a conclusion, that the negotiated contingency fee should not apply to this settlement as well. . . ." (Italics added.)

Hearing on the revised petition was then set for hearing in January 2010. Jackson appeals.

DISCUSSION

"Although attorneys are ethically prohibited from charging an unreasonable or unconscionable fee (Cal. Rules of Prof. Conduct, rule 4-200; ABA Model Rules of Prof. Conduct, rule 1.5 (a) and (c); Cazares v. Saenz [(1989)] 208 Cal.App.3d [279,] 287), courts normally do not inquire into reasonableness in the absence of an objection by the client. An exception exists, however, where the lawyer represents a minor or incompetent person and recovers funds by way of a judgment or settlement. In such cases, the court must approve the payment of reasonable costs and fees. (Prob. Code, § 3600 and 3601.)" (Ojeda v. Sharp Cabrillo Hospital (1992) 8 Cal.App.4th 1, 17.)

As relevant, Probate Code section 3600 provides: "This chapter applies whenever both of the following conditions exist: (a) A court . . . (2) approves a compromise of a pending action or proceeding to which a . . . person with a disability is a party . . . [and] (b) The compromise . . . provides for the payment . . . of money . . . for the benefit of the . . . person with a disability."5

Here, after Jackson was appointed Griffin's conservator, the trial court approved the settlement of Griffin's claims against the City of Los Angeles, which provided for the payment of money into a special needs trust for Griffin.

As set forth in subdivision (a) of Probate Code section 3601, "The court making the order . . . referred to in Section 3600, as a part thereof, shall make a further order authorizing and directing that reasonable expenses, medical or otherwise and including reimbursement to a parent, guardian, or conservator, costs, and attorney's fees, as the court shall approve and allow therein, shall be paid from the money . . . to be paid . . . for the benefit of the . . . person with a disability."

In ruling on the petition, Jackson says, the trial court either "declined to rule on the validity of the Cochran Retainer" or "seems to have assumed the validity and ignored [Jackson's] challenge to it." In its respondent's brief, the Firm maintains "[t]he trial court was not required to determine the validity of the contingency fee agreement when awarding fees under Probate Code section 3601[, subdivision] (a)." We disagree.

Under Business and Professions Code section 6147, an attorney's contingency fee agreement "shall be in writing"—"signed by both the attorney and the client, or the client's guardian or representative"—and "shall include" certain required statements.6 "Failure to comply with any provision of this section renders the [contingency fee] agreement voidable at the option of the plaintiff, and the attorney shall thereupon be entitled to collect a reasonable fee." (Italics added.)

As Jackson notes in her opening brief, "Attorney fee agreements are evaluated at the time of their making . . . ." (Alderman v. Hamilton (1988) 205 Cal.App.3d 1033, 1037.) She says the retainer agreement she signed is voidable because her sister (Griffin) was in a coma when Jackson (and her parents) signed the agreement (which makes no reference to Griffin), there is no evidence Griffin appointed Jackson or her parents to act as her representatives prior to the accident and the fee agreement was never ratified (among other asserted deficiencies). (Fergus v. Songer (2007) 150 Cal.App.4th 552, 571 ["As a general rule, `[a] voidable contract may be ratified.' [Citation.] Civil Code section 1588 provides: `A contract which is voidable solely for want of due consent, may be ratified by a subsequent consent'"].) The power of attorney Jackson and Griffin executed on October 27, 2006, contains no mention of the retainer agreement signed the preceding month, let alone any mention of the agreement's voidability for noncompliance with legal requirements. (See Civ. Code, § 2309 ["an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing"]; and see Fergus v. Songer, supra, 150 Cal.App.4th at p. 571 ["Assuming th[e contingency fee agreement] could have been ratified, ratification would have required knowledge [by the client] of his right to void the agreement"].)

Because the failure to comply with the requirements of Business and Professions Code section 6147 renders an attorney's contingency fee agreement voidable at the option of the plaintiff, and following her appointment as her sister's conservator, Jackson invoked this provision in asserting the agreement's invalidity, the trial court necessarily had to determine whether there was an enforceable contingency fee agreement before proceeding to determine whether the fees the Firm sought pursuant to this agreement were "reasonable" under Probate Code section 3601. Having reviewed the record, we agree with Jackson that the trial court considered only whether the "negotiated" 40 percent contingency fee was reasonable—without first determining whether the Firm was entitled to seek enforcement of its fee agreement in the first place, in light of the deficiencies Jackson asserted under Business and Professions Code section 6147. Accordingly, the trial court must first address the fee agreement's validity.

Then, if the trial court determines the Firm's agreement for a 40 percent contingency fee is unenforceable for noncompliance with Business and Professions Code section 6147, the Firm "shall thereupon be entitled to collect a reasonable fee." (Bus. & Prof. Code, § 6147, subd. (b).) "Where, as here, a client exercises his right to void a contingency fee agreement, [Business and Professions Code] section 6147 does not permit the trier of fact to consider the contingent nature of the fee arrangement in determining a reasonable fee. If the contingency fee agreement is void, there is no contingency fee arrangement. `A void contract is no contract at all; it binds no one and is a mere nullity. [Citation.] Consequently, such a contract cannot be enforced. [Citation.]' (Guthman v. Moss (1984) 150 Cal.App.3d 501, 507 [198 Cal.Rptr. 54].)

"The deterrent and protective purposes of Business and Professions Code section 6147 would be impaired if an attorney who was barred from enforcing a contingency fee agreement would nevertheless be entitled to a percentage of the recovery based on the contingent risk factor. The attorney would in effect be receiving a contingency fee even though the contingency fee agreement had been voided by the client. A contingency fee `is contingent not only on the ultimate success of the case but also on the amount recovered; that is, the fee is measured as a percentage of the total recovery.' (Cazares v. Saenz[, supra,] 208 Cal. App. 3d [at p.] 288 [256 Cal.Rptr. 209].)" (Fergus v. Songer, supra, 150 Cal.App.4th at p. 573, italics added.)

As evidenced by subdivision (b) of Business and Professions Code section 6147, "The Legislature's regulation of fee agreements between attorneys and clients favors the availability of quantum meruit recovery." (Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, 460.) "Because the hourly fee is the prevailing price structure in the legal profession, it is sometimes assumed that the quantum meruit standard applied to legal services includes nothing more than a reasonable hourly rate multiplied by the amount of time spent on the case." (Cazares v. Saenz [,supra,] 208 Cal.App.3d at pp. 286-287, citation omitted.)

While "the fee setting inquiry in California ordinarily begins with the `lodestar,' i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate," the "lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided." (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095, citation omitted.) The trial court may determine the lodestar should be enhanced or decreased by a "multiplier," based on factors such as "(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and, where appropriate], (4) the contingent nature of the fee award." (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

"What is reasonable in a given case depends on a host of circumstances. [Citation.] Moreover, there may be a significant difference between what is reasonable in the context of a negotiated fee and the otherwise calculated reasonable value of legal services rendered. (Aronson, Attorney-Client Fee Arrangements: Regulation and Review (Federal Judicial Center 1980) pp. 18-19.) A party to a contract may agree to pay a higher-than-market price for services, but where the bargaining process is a fair one, courts traditionally defer to the parties' agreement as the best measure of the value of the contract performance. (Ibid.)" (Cazares v. Saenz, supra, 208 Cal.App.3d at p. 287.)

"In all cases under . . . Probate Code sections 3600-3601, unless the court has approved the fee agreement in advance, the court must use a reasonable fee standard when approving and allowing the amount of attorney's fees payable from money or property paid or to be paid for the benefit of . . . a person with a disability." (Cal. Rules of Court, rule 7.955(a).) "Factors the court may consider in determining a reasonable attorney's fee [¶] In determining a reasonable attorney's fee, the court may consider the following nonexclusive factors: [¶] (1) The fact that a . . . person with a disability is involved and the circumstances of that . . . person with a disability. [¶] (2) The amount of the fee in proportion to the value of the services performed. [¶] (3) The novelty and difficulty of the questions involved and the skill required to perform the legal services properly. [¶] (4) The amount involved and the results obtained. [¶] (5) The time limitations or constraints imposed by the representative of the . . . person with a disability or by the circumstances. [¶] (6) The nature and length of the professional relationship between the attorney and the representative of the . . . person with a disability. [¶] (7) The experience, reputation, and ability of the attorney or attorneys performing the legal services. [¶] (8) The time and labor required. [¶] (9) The informed consent of the representative of the . . . person with a disability to the fee. [¶] (10) The relative sophistication of the attorney and the representative of the . . . person with a disability. [¶] (11) The likelihood, if apparent to the representative of the . . . person with a disability when the representation agreement was made, that the attorney's acceptance of the particular employment would preclude other employment. [¶] (12) Whether the fee is fixed, hourly, or contingent. [¶] (13) If the fee is contingent: [¶] (A) The risk of loss borne by the attorney; [¶] (B) The amount of costs advanced by the attorney; and [¶] (C) The delay in payment of fees and reimbursement of costs paid by the attorney. [¶] (14) Statutory requirements for representation agreements applicable to particular cases or claims." (Rule 7.955(b), boldface omitted.) An attorney seeking fees must submit a declaration addressing each of the foregoing factors. (Rule 7.955(c).)

"The Advisory Committee comment to [California Rules of Court,] rule 7.955 states: `This rule requires the court to approve and allow attorney's fees in an amount that is reasonable under all the facts and circumstances, under Probate Code section 3601.[] The rule is declaratory of existing law concerning attorney's fees under a contingency fee agreement when the fees must be approved by the court. The facts and circumstances that the court may consider are discussed in a large body of decisional law under section 3601 and under other statutes that require the court to determine reasonable attorney's fees. The factors listed in rule 7.955(b) are modeled after those provided in rule 4-200 of the Rules of Professional Conduct of the State Bar of California concerning an unconscionable attorney's fee, but the advisory committee does not intend to suggest or imply that an attorney's fee must be found to be unconscionable under rule 4-200 to be determined to be unreasonable under this rule. [¶] The rule permits, but does not require, the court to allow attorney's fees in an amount specified in a contingency fee agreement. The amount of attorney's fees allowed by the court must meet the reasonableness standard of [Probate Code] section 3601 no matter how [it is] determined." (Advisory Com. com., Deering's Ann. Codes, Rules, supra, foll. rule 7.955, p. 31.)

The trial court plays a particularly important role in awarding fees pursuant to Probate Code section 3601. As the court in Gonzalez v. Chen (2011) 197 Cal.App.4th 881, explained in the analogous context of an attorney's fee award in connection with a minor's compromise (to which rule 7.955 also applies), "[A]ttorney fees awarded pursuant to a `prevailing party' provision in a statute or contract are paid by the other side. In contrast, attorney fees in a minor's compromise come out of, and therefore reduce, the minor's recovery. The defendant in a medical malpractice case has no interest in how the settlement proceeds are allocated. Once the malpractice carrier has reached a settlement figure approved by the court, the health care provider is out of the picture. Further, the minor's guardian ad litem, often a relative, is rarely skilled in the law and usually depends on the minor's attorney for advice. If the minor's attorney argues, as he did here, that he is entitled to additional attorney fees under MICRA, the guardian ad litem may not even question the argument. The trial court itself must develop and resolve any counterarguments on behalf of the minor, lest the attorney receive an excessive award of fees."

In this case, the trial court made clear its assessment that the Firm accomplished a great result in this case and, assuming the validity of the Firm's purported contingency fee agreement, found the 40 percent "negotiated" fee to be reasonable. However, on remand, the trial court must first address the deficiencies Jackson asserts with respect to the Firm's fee agreement and, if the contingency fee agreement is voidable, the trial court must determine whether the fees sought by the Firm are reasonable—not on the basis of an invalidated contract, but rather on a quantum meruit basis. (Padilla v. McClellan (2001) 93 Cal.App.4th 1100, 1108 ["an experienced trial judge is best qualified to decide the value of an attorney's services in a given matter"].)

DISPOSITION

The order is reversed. The matter is remanded to the trial court with instructions to determine the validity of the fee agreement under which the Cochran Firm claims entitlement to a 40 percent contingency fee and, in the event the agreement is found to be invalid, to determine the reasonable fees due on a quantum meruit basis. The Cochran Firm's motion for sanctions is denied. Jackson is entitled to her costs of appeal.

PERLUSS, P. J. and ZELON, J., concurs.

FootNotes


1. In the agreement, Jackson and her parents are identified as "client[s]" without mention of Griffin. The "nature of claim" is identified as "personal injury." In her declaration in support of her motion to vacate and set aside dismissal, Jackson says, Brian Dunn of the Cochran Firm asked her "to sign a fee agreement on behalf of . . . Griffin" when Griffin was in a coma.
2. More particularly, the retainer agreement stated: "Clients acknowledge that client has [sic] been advised by Attorney that any contingency fee is negotiable and is not set by law. Bearing such advice in mind, Clients agree that Attorney shall be paid for legal services rendered as follows: If the matter is settled before a lawsuit is filed, an amount equal to thirty[-]three and one-third percent (33 1/3%) of the gross recovery in the case. If the recovery is obtained after a lawsuit is filed, whether by settlement, judgment or otherwise, an amount equal to forty percent (40%) of the gross recovery in the case. (Clients' net recovery shall consist of the gross amount of the recovery less attorney[']s fees and costs. Attorney's fees shall consist of the applicable contingency fee applied to clients' gross recovery before costs are deducted.)"
3. Effective January 1, 2010, this local rule was repealed and preempted by rule 7.955 of the California Rules of Court which states: "[i]n all cases under . . . Probate Code sections 3600-3601, unless the court has approved the fee agreement in advance, the court must use a reasonable fee standard when approving and allowing the amount of attorney's fees payable from money . . . paid or to be paid for the benefit of a . . . person with a disability."
4. According to the Firm, the problem started when Jackson said she wanted $200,000 in compensation for her time on the case, and when she was told she would have to provide detailed documentation for approval with the court and Dunn said he would set up a special needs trust to take care of Griffin, Jackson became "hostile."
5. Under Probate Code section 3603, "person with a disability" includes "[a] person for whom a conservator may be appointed" and "[a] person who meets the definition of disability as defined in Section 1382c(a)(3) of Title 42 of the United States Code" [individual is considered "disabled . . . if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months"].)
6. "An attorney who contracts to represent a client on a contingency fee basis shall, at the time the contract is entered into, provide a duplicate copy of the contract, signed by both the attorney and the client, or the client's guardian or representative, to the plaintiff, or to the client's guardian or representative. The contract shall be in writing and shall include, but is not limited to, all of the following: "(1) A statement of the contingency fee rate that the client and attorney have agreed upon. "(2) A statement as to how disbursements and costs incurred in connection with the prosecution or settlement of the claim will affect the contingency fee and the client's recovery. "(3) A statement as to what extent, if any, the client could be required to pay any compensation to the attorney for related matters that arise out of their relationship not covered by their contingency fee contract. This may include any amounts collected for the plaintiff by the attorney. "(4) Unless the claim is subject to the provisions of Section 6146, a statement that the fee is not set by law but is negotiable between attorney and client. "(5) If the claim is subject to the provisions of Section 6146, a statement that the rates set forth in that section are the maximum limits for the contingency fee agreement, and that the attorney and client may negotiate a lower rate." (Bus. & Prof. Code, § 6147, subd. (a).)

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