Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

 

This case arises from the parties’ agreement to split attorneys’ fees earned on a premises liability case, Joana Gallegos v. Cosco Wholesale Corporation.  (Compl. ¶9.)  Defendants Alina Landver and Landver Law Corporation APC represented Defendant Joana Gallegos in the premises liability case.  (Id. ¶12.)   

Landver asked Plaintiff Sebastian Richards to defend the deposition of Gallegos.  (Id. ¶14.)  Landver wrote an email to Plaintiff offering the following terms to defend the deposition of Gallegos: “If they settle the case for more than $250,000, I can offer you 10%.  If we get $250,000 and less as a settlement, I am pleased to offer you 15%.”  (Id. ¶ 17.)  Plaintiff defended the deposition of Gallegos.  (Id. ¶ 22.)   

Landver then asked Plaintiff to oppose Costco’s motion for summary judgment.  (Id. ¶ 24.)  In an email, Plaintiff proposed the following terms for his work on the opposition: “To be clear, our fee splitting agreement for Gallegos v. Costco is as follows: Made Law Group [Plaintiff’s firm] receives 40% of legal fees.  Landver Law covers costs and recoups from client’s 60%.  Attorney’s fees will not be reduced by, including but not limited to, costs, expenses, expert fees, etc.”  (Id. ¶ 27.)  Landver replied, “Agreed.”  (Id. ¶ 27.)  Plaintiff successfully opposed Costco’s motion for summary judgment.  (Id. ¶ 33.) 

Plaintiff sent a written fee splitting agreement to Defendants Landver, Landver Law and Gallegos.  (Id. ¶ 35.)  Landver and Gallegos refused to sign the agreement.  (Id. ¶ 37.)  Landver told Plaintiff to provide his hours and “we will work something out with you at the end of the case.”  (Id.)  Plaintiff submitted to Landver a statement of billable hours due on the case.   (Id. ¶ 38.)  On December 12, 2024, the underlying case was dismissed pursuant to a settlement agreement with Costco.  (Id. ¶ 40.)  Defendants failed to pay Plaintiff for his services on the case.  (Id. ¶ 56.)  This lawsuit ensued.   

The Complaint alleges six claims to recover the attorneys’ fees Plaintiff alleges he is owed: (1) fraud, (2) money had and received, (3) breach of contract (relating to defending Gallegos’ deposition), (4) breach of contract (relating to opposing the motion for summary judgment), (5) breach of the covenant of good faith and fair dealing, and (6) intentional infliction of emotional distress.   

This hearing is on Defendant Joanna Gallegos’ demurrer to the Complaint.  Gallegos argues that Plaintiff failed to comply with Rule 1.5.1 of the Rules of Professional Responsibility, and this noncompliance renders the alleged fee splitting agreements unenforceable as a matter of law.  There was no opposition filed as of the posting of this tentative ruling.     

MEET AND CONFER   

Code Civ. Proc. § 430.41 requires that before the filing of a demurrer, the moving party “shall meet and confer in person or by telephone” with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. (Code Civ. Proc. § 430.41(a).)  The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc § 430.41(a)(2).)  Thereafter, the moving party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc. § 430.41(a)(3).)   

Gallegos submits the Declaration of Alina Landver which fails to show the parties met and conferred in “person or by telephone.”  Landver sent a letter outlining the purported deficiencies in the Complaint and asked for a telephonic meet and confer.  Plaintiff did not respond.  There appear to be no calls made to try and schedule a telephonic meet and confer.  Notwithstanding, the Court cannot overrule a demurrer due to an insufficient meet and confer.  (Code Civ. Proc. § 430.41(a)(4).)   

LEGAL STANDARD 

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable.  (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents).)  For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

DISCUSSION 

Contract Claims 

Gallegos argues that Plaintiff cannot recover on any of his causes of action because they are based on a fee splitting agreement that violates the Rules of Professional Responsibility.  The Court agrees as to the contract claims (i.e., third, fourth and fifth causes of action). 

Rule 1.5.1 states: “Lawyers who are not in the same law firm shall not divide a fee for legal services unless (1) the lawyers enter into a written agreement to divide the fee; (2) the client has consented in writing either at the time the lawyers enter into the agreement to divide the fee or as soon thereafter as reasonably practicable, after a full written disclosure to the client of: (i) the fact that a division of fees will be made; (ii) the identity of the lawyers or law firms that are parties to the division, and (iii) the terms of the division; and (3) the total fee charged by all lawyers is not increased solely by reason of the agreement to divide fees.” 

Here, the Complaint alleges Plaintiff sent the client, Gallegos, a fee splitting agreement, and Gallegos refused to sign it.  (Id. ¶ 40.)  Accordingly, there is no dispute that there is no written consent from the client, and the fee splitting agreement violates Rule 1.5.1.  Noncompliance with the California Rules of Professional Responsibility renders fee splitting agreements unenforceable as a matter of public policy.  (Chambers v. Kay (2002) 29 Cal.4th 142, 158-159.)   

Chambers involved a fee splitting agreement which failed to comply with Rule 2-200, the predecessor to Rule 1.5.1.  There, an attorney brought an action, arising from a fee dispute, for breach of contract and quantum meruit recovery against another attorney. The plaintiff had agreed to participate as co-counsel in a sexual harassment suit in return for a percentage of the attorney fees received.  During discovery, the defendant wrote the plaintiff a letter notifying him of his removal from the case and reconfirming their fee-splitting arrangement, and he sent a copy of this letter to the client.  However, neither plaintiff nor defendant obtained the client’s consent to the proposed fee division.  (Id. at 145-147.) 

The trial court granted summary judgment in favor of defendant, finding that the fee-sharing agreement was unenforceable as violative of Rule 2-200, and that quantum meruit recovery was barred by the governing statutes of limitations.  The Court of Appeal reversed the judgment in favor of defendant on the quantum meruit claim, but otherwise affirmed the judgment.  (Id. at 147.) 

The Supreme Court affirmed the judgment of the Court of Appeal. (Id. at 163.)  The Supreme Court noted the importance of Rule 2-200’s notice and consent requirement.  “A division of fees may reflect each participating attorney’s responsibilities in a case or fees may be charged for multiple attorney participation in the case without regard to the particular services each attorney performs. Such information may affect the client’s level of confidence in the attorneys and is indispensable to the client’s ability to make an informed decision regarding whether to accept the fee division and whether to retain or discharge a particular attorney.  As in the case of referral fees, requiring the client’s written consent to fee divisions among participating attorneys impresses on the client the importance of consent and the right to reject a fee division.”  (Id. at 157.)   

The Supreme Court went on to hold that Rule 2-200 precluded the plaintiff from sharing in the fees obtained, reasoning that a court should not facilitate an attorney in accomplishing a fee division that would violate Rule 2-200’s explicit requirement of written client consent.  (Id. at 158.)  “Were we to hold that the fee obtained [in the underlying action] may be divided as [the plaintiff and the defendant] agreed, with no indication that the required client consent was either sought or given, we would, in effect, be both countenancing and contributing to a violation of a rule we formally approved in order ‘to protect the public and to promote respect and confidence in the legal profession.’ (Rule 1-100(A), 1st par.; Bus. & Prof. Code, § 6076.)  Such a result would be untenable as well as inconsistent with the policy considerations that motivated the adoption of rule 2-200.”  (Id.)   

In so holding, the Supreme Court rejected the plaintiff’s argument that rational reasons exist for allowing a division of fees despite the lack of written client consent, e.g., it would effectuate the intent of the contracting attorneys and would avoid incentives for fraud in the inducement of such contracts.  “Because attorneys who negotiate fee divisions without fulfilling their obligations under rule 2-200 undermine the public’s respect and confidence in the legal profession by failing to put the best interests of their clients first, and because attorneys are fully capable of safeguarding their own interests simply by obtaining the requisite client consent, we are not persuaded that [the plaintiff’s] proffered reasons [for ignoring Rule 2-200] are sufficient to disregard rule 2-200’s command.”  (Id. at 159.) 

Given Chambers, the Court must conclude that the fee-splitting agreements here are unenforceable.  While this result may be unfair, we note that Plaintiff could have protected his interests by simply complying with the Rules of Professional Responsibility and securing the client’s written consent before he did any work.  In any event, Plaintiff is not left without any remedy.  Plaintiff could always recover the reasonable value of his services on a quantum meruit claim.  (Id. at 161-162.)   

Accordingly, the Court sustains the demurrer to the third, fourth and fifth causes of action. 

Fraud Claim 

Gallegos argues that Plaintiff has not plead fraud with specificity and particularly fails to allege any misrepresentations by Gallegos.  The Court agrees. 

The elements of fraud are (1) a misrepresentation, (2) scienter or knowledge of its falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) resulting damage.  (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.)  The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked.  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) 

Here, the Complaint fails to identify any alleged representation by Gallegos, much less with sufficient particularity.  The Complaint also fails to allege that Gallegos had knowledge of the falsity of any misrepresentation and intended to induce reliance on such a misrepresentation.  

Accordingly, the Court sustains the demurrer to the first cause of action for fraud.   

Money Had and Received Claim 

Gallegos argues that Plaintiff’s claim for money had and received fails because Plaintiff did not comply with Rule 1.5.1.  The Court disagrees.   

A common count for money had and received is available when the express contract on which it is based is void, voidable, or unenforceable. (See 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 561, pp. 688-689, and cases cited therein.)  That the fee splitting agreements are unenforceable, therefore, is not a basis to sustain a demurrer to a common count for money had and received.   

Accordingly, the Court overrules the demurrer to the second cause of action for money had and received. 

Intentional Infliction of Emotional Distress 

Gallegos argues that Plaintiff’s claim for intentional infliction of emotional distress fails because the alleged wrongdoing is not extreme or outrageous.  The Court agrees. 

The elements of a claim for intentional infliction of emotional distress are: (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.  (Wilson v. Hynek (2012) 207 Cal.App.4th 999, 1009.)  “Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.”  (Id.)  Here, the Court cannot conclude that a fee dispute, particularly one based on agreements that fail to comply with Rule 1.5.1, constitutes extreme and outrageous conduct. 

Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768 is instructive.  There, the defendant employer and its officers repeatedly promised the plaintiff employees that if they continued to work for the company until it was sold, the plaintiffs would be paid a bonus from the sale proceeds that would be sufficient for them to retire.  (Id. at 772.)  The plaintiffs remained at the company for five years following the defendants’ initial promise of the retirement bonus, rejecting job offers from other companies, and opportunities to move out of the area.  (Id.)  The appellate court concluded that these facts were sufficient to state causes of action for fraud, breach of contract, and promissory estoppel.  However, the alleged conduct was not so extreme or outrageous to support a cause of action for intentional infliction of emotional distress.  (Id. at 780-781.)   

“[T]he allegations in the first amended complaint consist of defendants misleading plaintiffs into believing they would be compensated in an amount that would allow them to retire if they continued to work for West Coast until the company was sold.  While the allegations of defendants’ conduct, if true, demonstrate a callous disregard for plaintiffs’ professional and personal well-being, the alleged conduct as stated is not extreme or outrageous to support a cause of action for intentional infliction of emotional distress.”  (Id. at 780-781.)  

As in Moncada, the Court cannot conclude that a disagreement between an attorney and a client over a fee split constitutes extreme and outrageous conduct.  Accordingly, the Court sustains the demurrer to Plaintiff’s sixth cause of action for intentional infliction of emotional distress. 

CONCLUSION 

For the foregoing reasons, the Court SUSTAINS IN PART and OVERRULES IN PART Joanna Gallegos’ demurrer to the Complaint without leave to amend.  Plaintiff has leave to assert a claim for quantum meruit, if he so chooses.      

IT IS SO ORDERED. 

 

DATED: April 23, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court