Judge: Edward B. Moreton, Jr., Case: 19SMCV01302, Date: 2023-01-10 Tentative Ruling

Case Number: 19SMCV01302    Hearing Date: January 10, 2023    Dept: 205

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

MOVING PARTY:                Defendant Robert B. Cundall

RESPONDING PARTY:       Plaintiff Frances L. Diaz

BACKGROUND

Plaintiff Frances L. Diaz (“Plaintiff”) filed this breach of contract action against Defendant Robert B. Cundall (“Defendant”) for failure to pay legal fees.  According to the undisputed facts, there is a written contract between the parties, effective August 9, 2011.  (UMF No. 1.)[1]  The Contract provides that Defendant, as client, was retaining Plaintiff, as attorney, “primarily in his capacity as the Trustee of the John W. Martin Trust, UTD 2/11/09.”  (UMF No. 2.)  The Contract states that “Attorney has agreed to work for Client with deferred fee payment based upon ultimate recovery[]” and that “Client agrees to pay all costs and disbursements incurred by Attorney reasonably required to adequately represent Client.” (UMF Nos. 4-5.)  Defendant was further “personally responsible and liable for payment on demand for all costs incurred by Attorney in connection with her representation of Client.”  (UMF No. 6.)  The Contract also provided that Defendant could discharge Plaintiff at any time for any reason, but that if he did so and new counsel was retained Defendant would be liable in the amount of $7500 for every month that Plaintiff worked on the case before discharge.  (Ex. A to Complaint.)  Thereafter, Plaintiff substituted in as Defendant’s attorney of record in a probate matter regarding the Martin Trust, In re John W. Martin Living Trust, Case No. BP124548 (“Martin Trust Action”).  (UMF No. 7.) 

On July 31, 2018, the trial court in the Martin Trust Action ruled against Defendant and held that he would recover nothing in that action.  (UMF No. 9.)  Plaintiff filed an appeal of that order in November 2018, and she is identified as Defendant’s counsel of record in the appeal.  (UMF Nos. 10-11.)  On October 4, 2019, Defendant filed his opening brief in the appeal, and Plaintiff is listed on the service list as Defendant’s counsel.  (UMF No. 14.)  Plaintiff claims, however, that Defendant first breached the contract on May 1, 2019.  (UMF No. 12.)  She filed this action on July 29, 2019.  (UMF No. 13.)

On June 29, 2020, the Court of Appeal issued a published opinion affirming the judgment in the Martin Trust Action.  (UMF No. 15.)  On August 3, 2020, Plaintiff formally substituted out as Defendant’s attorney in the Martin Trust Action.  (UMF No. 16.)  Vanessa Clyde became the successor trustee of the Martin Trust on August 14, 2020.  (UMF No. 17.)

Plaintiff has sued Defendant in his individual capacity.  (UMF No. 18.)  She alleges a single claim for breach of contract.  (UMF No. 19.)  Plaintiff claims unpaid costs in the amount of $38,750.18, although the Martin Trust paid her $114,771.53 on or about March 11, 2014.  (UMF Nos. 22-23.)

This hearing is on Defendant’s motion for summary judgment.  Defendant argues that Plaintiff did not recover anything in the Martin Trust Action, and therefore is entitled to nothing under the Contract.  Defendant also argues that Plaintiff cannot recover attorneys’ fees from him individually under the Contract, and he is no longer the trustee of the Martin Trust.  Further, while Defendant is personally liable for costs under the Contract, Plaintiff has already received $114,771.53 from the Martin Trust and her claim for costs is only $38,750.18.  Lastly, Defendant argues the Contract is unenforceable because it does not contain all provisions required to be in an enforceable contingency fee agreement.         

REQUEST FOR JUDICIAL NOTICE

Defendant requests judicial notice of various court records filed in this action, the Martin Trust Action (trial court and appeal), and a State Bar complaint proceeding.  The request is GRANTED.  (See Evid. Code, § 452, subd. (d).)  However, the Court cannot take judicial notice of the truth of any factual assertions therein.

LEGAL STANDARD

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial.  (Aguilar v. Atlantic Ritchfield Co. (2001) 25 Cal.4th 826, 843.)  Code Civ. Proc. §437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Minor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)  “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.”  (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67). 

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element or to establish a defense.  (Code Civ. Proc. §437c(p)(2); Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.  To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence.  (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

ANALYSIS

Defendant moves for summary judgment on Plaintiff’s single claim for breach of contract, arguing that: (1) plaintiff is not entitled to attorneys’ fees under the contract and therefore cannot demonstrate the element of breach; (2) Defendant did not “discharge” Plaintiff within the meaning of the contract; (3) Defendant is no longer Trustee of the Martin Trust and he individually is not liable for attorneys’ fees; (4) if Plaintiff is entitled to costs, they have been paid; and alternatively, (5) the contract is voidable under Business and Professions Code §6147.  Each of these arguments has merit and shifts the burden.

The contract at issue is a contingency fee agreement, providing that Plaintiff was entitled to a deferred payment based on ultimate recovery.  (UMF No. 4.)  There was no ultimate recovery in Defendant’s favor at either the trial court or appellate level.  (UMF Nos. 9, 15.)  As such, Plaintiff is not entitled to any attorneys’ fees from Defendant.

Moreover, the discharge provision in the Contract is not enforceable.  Paragraph 3 provides that Plaintiff will work on a contingent basis but “[i]f Client discharges Attorney and retains a new attorney (‘New Attorney’), Client agrees to immediately advise New Attorney of this Agreement and shall immediately pay Attorney a mutually agreed upon flat monthly rate of $7,500” for each month Plaintiff worked for Defendant.  The California Supreme Court has stated, the client’s discharge of an attorney cannot constitute a breach of contract.  “We have concluded that a client should have both the power and the right at any time to discharge his attorney with or without cause.  Such a discharge does not constitute a breach of contract for the reason that it is a basic term of the contract, implied by law into it by reason of the special relationship between the contracting parties, that the client may terminate that contract at will. It would be anomalous and unjust to hold the client liable in damages for exercising that basic implied right.”  (Fracasse v. Brent (1972) 6 Cal.3d 784, 790-791 (citation omitted).)  Additionally, Plaintiff has not argued she was in fact discharged or when the discharge took place.  Plaintiff alleges the breach occurred in 2019 but she did not substitute out as counsel until August 3, 2020.  The Court cannot tell what the breach was or why Plaintiff continued to be counsel of record after the breach.    

Next, Defendant asserts that he is no longer the Trustee of the Martin Trust and cannot be liable to Plaintiff under the Contract.  The Contract notes that Defendant retained Plaintiff “primarily” in his capacity as Trustee of the Martin Trust and that “he shall be personally responsible and liable for payment on demand for all costs incurred by Attorney in connection with her representation of Client.”  (UMF No. 6.)  Defendant persuasively argues that the representation was in his capacity as Trustee, which he no longer is, and he is only personally responsible for “costs.”  The language of the Contract bears this out.  It does not say Defendant is personally liable for attorneys’ fees.  The Contract has separate clauses for attorneys’ fees and costs.  (Exh. 5 to RJN [Complaint], Exh. A, ¶¶3-4.) 

To the extent Plaintiff is even entitled to costs from Defendant personally, Defendant contends they have been paid.  Plaintiff claimed approximately $38,000 in unpaid costs during discovery but in March 2014, she was paid $114,771.53 from the Martin Trust.  (UMF Nos. 22-23.)  This fact at least shifts the burden to Plaintiff to show the payment she received was not for costs.  She has failed to meet her burden. 

Defendant also argues that the fee agreement is voidable under Business and Professions Code section 6147.  Defendant is correct.  The agreement is woefully deficient in many respects.  However, that statute does not provide that the failure to meet its terms means that the attorney is entitled to no fee at all; it means that the attorney is entitled to a “reasonable fee.”  Accordingly, were Defendant to prevail on this theory, summary judgment would not lie; Plaintiff would instead be relegated to a reasonable fee rather than some kind of contingency fee—a situation Plaintiff would likely not oppose.

Plaintiff filed an opposition, but failed to include a separate statement as required under Code Civ. Proc., § 437c, subd. (b)(3).  In addition to the substantive reasons noted above, the motion is granted on this basis alone.  But even setting aside this procedural defect, Plaintiff has not raised a triable issue of material fact.  Plaintiff first relies on her complaint as part of her opposition.  She cannot.  “It is generally understood, for instance, that a party cannot rely on the allegations of his own pleadings, even if verified, to make or supplement the evidentiary showing required in the summary judgment context.” (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 720, fn. 7 [collecting cases].)  Plaintiff also complains about misrepresentations by Defendant’s attorney, issues with Defendant’s capacity, and problems with Defendant’s Guardian ad Litem.  She fails to connect those matters to her claim for breach of contract or how they affect the arguments raised by Defendant in the moving papers.  Thus, Plaintiff fails to carry her burden of showing there are triable issues of material fact.   

CONCLUSION

Based on the foregoing, the Court GRANTS Defendant’s motion for summary judgment of Frances Diaz’s Complaint.

DATED: January 10, 2023                                                   ___________________________

Edward B. Moreton, Jr.

Judge of the Superior Court