Judge Gail Killefer, Case Number: 21STCV09560, Date: 2023-10-30 Tentative Ruling

MOVING PARTIES: Defendants, Nick Movagar, Steven Yamin, Daniel Reeves, and Movagar & Yamin APLC (“MY Defendants”)

Defendants’ motion for summary adjudication is granted as to the first, second, third, fifth, and sixth causes of action and Plaintiff’s claim for punitive damages. Summary adjudication is denied as to the fourth cause of cause of action for declaratory relief.

This action arises in connection with the representation of Jason Lanc (“Plaintiff”) by Nick Movagar, Steven Yamin, Daniel Reeves and Movagar & Yamin, A Professional Law Corporation (collectively “Defendants”) in his underlying personal injury action, Jason Lanc v. Liana Hovhannisyan (the “Underlying Action”). While Defendants represented Lanc in the Underlying Action through several stages of litigation, Michael S. Brown (“Brown”) negotiated the Underlying Action to settlement. Brown also represents Plaintiff in this action.

On March 11, 2021, Plaintiff filed this lawsuit against Defendants alleging six causes of action: (1) Intentional Interference with Contract; (2) Conversion; (3) Breach of Fiduciary Duty; (4) Declaratory Relief; (5) Intentional Infliction of Emotional Distress; and (6) Negligent Infliction of Emotional Distress.

In an effort to allow Plaintiff to obtain the settlement sum of $250,000, which was deposited with the Court by former Defendant and Cross-Complainant Safeco, the Parties submitted a Joint Stipulation to the Court on July 29, 2021 to (1) Discharge Defendant and Cross-Complainant Safeco; (2) Dismiss Plaintiff Jason Lanc’s Complaint against Defendant and Cross-Complainant Safeco; and (3) Dismiss Defendant and Cross-Complainant Safeco’s Cross-Complaint against all Cross-Defendants without Prejudice. The Joint Stipulation was entered by court order on July 30, 2021.

On May 4, 2022, the court granted Defendants’ request to file a Cross-Complaint in this action against Plaintiff and to name as the Cross-Defendants, Brown, and his firm California Lawyers Group LLP (“CLG”). The Cross-Complaint alleges: (1) Equitable Indemnity; (2) Contribution; (3) Declaratory Relief regarding Equitable Indemnity and Contribution; and (4) Quantum Meruit. On October 19, 2022, the court sustained Plaintiff/Cross-Defendants’ demurrer to the first three causes of action of the Cross-Complaint, without leave to amend.

Defendants/Cross-Complainants now move for summary judgment, or summary adjudication in the alternative, on the Complaint, as follows:

1) Issue 1: Defendants are entitled to summary adjudication as to the first cause of action for Intentional Interference with Contract because Plaintiff cannot establish each and every element of said cause of action;

2) Issue 2: Defendants are entitled to summary adjudication as to the second cause of action for Conversion because Plaintiff cannot establish each and every element of said cause of action;

3) Issue 3: Defendants are entitled to summary adjudication as to the third cause of action for Breach of Fiduciary Duty because Plaintiff cannot establish each and every element of said cause of action;

4) Issue 4: Defendants are entitled to summary adjudication as to the fourth cause of action for Declaratory Relief because Plaintiff cannot establish each and every element of said cause of action.

5) Issue 5: Defendants are entitled to summary adjudication as to the fifth cause of action for intentional infliction of emotional distress because Plaintiff cannot establish each and every element of said cause of action;

6) Issue 6: Defendants are entitled to summary adjudication as to the sixth cause of action for negligent infliction of emotional distress because Plaintiff cannot establish each and every element of a cause of action for restitution.

7) Issue 7: Defendants are entitled to summary adjudication as to Plaintiff’s prayer for punitive damages as to the First, Second, and Fifth Causes of action as Plaintiff cannot establish the required malice, fraud, or oppression.

Plaintiff opposes the motion. The court continued the hearing on July 3, 2023, pursuant to CCP § 437c(h), to allow Plaintiff time to conduct further discovery. Plaintiff filed new opposing papers on October 13, 2023. Defendants filed a reply on October 23, 2023.

Since Plaintiff was granted a continuance and the opportunity to refile opposing papers, the court only considers the evidentiary objections raised with his new opposing papers rather than those previously filed in the original opposition.[1]

Objection Nos. 1-24 are overruled. The declarant sufficiently attests to having personal knowledge of the information contained in the declaration and attaches a true and correct copy of the documents in question. Further, the information is not hearsay as it is not offered for its truth but to prove some other fact or falls within a hearsay exception.

Objection Nos. 1-7 are overruled. The information is not hearsay as it is not offered for its truth but to prove some other fact or falls within a hearsay exception. Furthermore, Declarant has provided true and correct copies of the documents in question.

Objection Nos. 1-2 are overruled. The declarant sufficiently attests to having personal knowledge of the information contained in the declaration and attaches a true and correct copy of the documents in question.

“The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Pursuant to Code of Civil Procedure, section 437c, subdivision (a):

A party may move for summary judgment in any action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct…. The motion shall be heard no later than 30 days before the date of trial, unless the court for good cause orders otherwise. The filing of the motion shall not extend the time within which a party must otherwise file a responsive pleading.

(CCP, § 437c(a).) A motion for summary judgment may be granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (CCP, § 437c, subd. (c).) Summary adjudication may be granted as to one or more causes of action within an action, or one or more claims for damages. (CCP, § 437c(f).)¿¿¿¿¿¿

“The motion shall be supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken. The supporting papers shall include a separate statement setting forth plainly and concisely all material facts that the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denial of the motion.” (CCP, § 437c(b)(1); see also CRC, rule 3.1350(c)(2) & (d).)

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294 (Hinsley).)

A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff or cross-complainant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.

(CCP, § 437c(p)(2).) The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.” (Hinesley, supra, 135 Cal.App.4th at p. 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”].) A motion for summary judgment must be denied where the moving party’s evidence does not prove all material facts, even in the absence of any opposition (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak (Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387).

In November 2018, Plaintiff hired Defendants (or “M&Y”) to represent him in the Underlying Action. Defendants originally handled the matter but in July 2013, Plaintiff hired Brown of CLG. (UMF 2.) In May 2020, Defendants placed a lien for attorney’s fees as to any settlement paid by the insurance carrier, Safeco. (UMF 3; Compl. ¶ 24.) On July 21, 2020, Brown notified Defendants that the Underlying Action had settled for Safeco’s policy limit of $250,000.00. (UMF 4.) Safeco issued a single settlement check to Brown listing Plaintiff, CLG, and Defendants as payees. (UMF 5.)

Brown requested that Defendants allow CLG to endorse the check on its behalf, but Defendants refused, asserting that it was entitled to recover its fees and endorsing the check would forfeit Defendants’ legal rights under the charging lien^{^[3]}. (UMF 6; Defendants’ Compendium of Evidence “DCOE” Ex. F.)

Plaintiff asserts that Defendants did not have an enforceable lien because Defendants failed to comply with Business & Professions Code § 6147, which required that both Plaintiff and Defendants sign the contingency fee agreement. Defendants had failed to sign the agreement. (Plaintiff’s Compendium of Evidence “PCOE” Movagar Depo. at p. 48:20-22, Brown Decl. ¶¶ 11-13.) Absent an enforceable contract, Plaintiff argues Defendants had no right to enforce the lien. (Brown Decl. ¶¶ 11-13.)

Due to Defendants' refusal to endorse the check, Plaintiff asserts Defendants intentionally delayed Plaintiff’s receipt of his settlement proceeds and caused Plaintiff harm. Plaintiff brought his action alleging six causes of action and a claim for punitive damages against Defendants. Defendants now move for summary judgment, or summary adjudication as to all causes of action in the Complaint and the Prayer for punitive damages.

“To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.)

Defendants assert that they had the right to refuse Mr. Brown’s request that they endorse the settlement check in the Underlying Action. Defendants offer evidence that it provided Plaintiff’s counsel with three suggestions to resolve the fee dispute: (1) Have Safeco issue two checks, one for attorney’s fees and costs and one for the remaining portion of the settlement, (2) the parties attend an expedited fee arbitration, or (3) CLG could place the disputed fee portion in a third-party escrow account. (Movagar Decl. Ex. F-G.)

Plaintiff does not dispute that he rejected the alternatives offered and instead requested that Defendants provide written authorization that the settlement check be deposited with CLG. (Id. Ex. F.) Defendants refused based on the belief that the endorsement would extinguish the lien. Plaintiff now asserts that the Defendants’ refusal to enforce the check interfered with Plaintiff’s relationship with CLG and Brown, and their efforts to distribute settlement proceeds to Plaintiff as required by the terms of the contingency agreement between CLG and Plaintiff.

Where the contract at issue is at will, the plaintiff must allege an independent wrongful conduct to prevail on a claim for interference with contractual relations. (See Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1148 (Ixchel) [“[A]llowing interference with at-will contract claims without requiring independent wrongfulness risks chilling legitimate business competition.”].) The parties do not dispute that the contingency agreement between Plaintiff and CLG is an at-will contract, meaning either party may terminate the agreement. (Id. at p. 1147 [“The contracting parties presumably bargained for these terms, aware of the risk that the relationship may be terminated at any time. At-will contractual relations are thus not cemented in the way that a contract not terminable at will is.”].) Therefore, pursuant to Ixchel, Plaintiff must allege an independent wrongfulness apart from the interference to prevail on the first cause of action.

Defendants assert it had no legal obligation to endorse the check, that it was entitled to pursue a lien on the settlement in the underlying action, and a right to seek repayment for services rendered. Therefore, the burden shifts to Plaintiff to show that Defendants engaged in an independent wrongful act that interfered with Plaintiff and CLG’s contractual relationship.

First, Plaintiff correctly asserts that because the contingency agreement between Plaintiff and Defendants was not signed by Defendants, the agreement is void for failing to comply with Business & Professions Code § 6147. (PCOE Ex. 1 [Movagar Depo. at p. 48:20-22,]; Brown Decl. ¶¶ 11-13.) “[T]he statutory language [Business and Professions Code section 6147] is clear” and “in contingency fee cases there must be a written agreement signed by both the attorney and the client. And if the agreement fails to comply with these and other requirements not relevant here, the client may elect to void the contract.” (O&C Creditors Group, LLC v. Stephens & Stephens XII, LLC (2019) 42 Cal.App.5th 546, 576.) “Failure to comply with any provision of this section renders the agreement voidable at the option of the plaintiff, and the attorney shall thereupon be entitled to collect a reasonable fee.” (Bus. & Prof. Code, § 6147(b); see also Fergus v. Songer (2007) 150 Cal.App.4th 552, 559.) Defendants do not dispute that they did not sign the contingency agreement. Therefore, Plaintiff has presented sufficient evidence that the contingency fee agreement between Plaintiff and Defendants is void at Plaintiff’s election.

Plaintiff further argues that because the attorney’s lien is created only by contract and that because Defendants’ contingency fee agreement is void, the Defendants’ charging lien was invalid. (See Fletcher v. Davis (2004) 33 Cal.4th 61, 66 [“But in California, with a few exceptions not pertinent here [citation], ‘an attorney's lien is created only by contract.... Unlike a service lien or a mechanic's lien, for example [citation], an attorney's lien is not created by the mere fact that an attorney has performed services in a case.’ [Citation.]”.) However, Plaintiff fails to cite any legal authority showing that Defendants were obligated to remove the lien or endorse the settlement check.

“[E]ven if the means used by the defendant are entirely lawful, intentional interference with prospective economic advantage constitutes actionable wrong if it results in damages to the plaintiff, and the defendant's conduct is not excused by a legally recognized privilege or justification.” (Lowell v. Mother's Cake & Cookie Co. (1978) 79 Cal.App.3d 13, 20; see also Sade Shoe Co. v. Oschin & Snyder (1984) 162 Cal.App.3d 1174, 1179 [accord].) Here, Plaintiff fails to show that Defendants’ refusal to endorse the settlement check because it would extinguish the lien was not a legally recognized privilege or justification. Moreover, Plaintiff fails to show that Defendants were prohibited from seeking to recover their attorney’s fees, even though it would cause delays in disbursement of the settlement proceeds to Plaintiff.

First, pursuant to Business & Professions Code § 6147(b), even if the contingency agreement between Plaintiff and Defendants was void at Plaintiff’s election, Defendants remain entitled to collect a reasonable fee. (See also Fracasse v. Brent (1972) 6 Cal.3d 784, 792 (Fracasse) [“In summary, we hold that an attorney discharged with or without cause is entitled to recover the reasonable value of his services rendered to the time of discharge.”]; Southern California Gas Co. v. Flannery (2016) 5 Cal.App.5th 476, 494 [“The attorney's lien survives even after discharge, although the attorney's recovery is limited to the reasonable value of services actually performed (i.e., quantum meruit), rather than the full percentage specified in the contract.”].) “Still, it is ‘permissible, and even advisable,’ for an attorney to file a notice of lien in the underlying action, meaning the action where the attorney is the client's attorney of record or—in the case of an attorney who has been discharged—where the attorney previously represented the client.” (Southern California Gas Co., 5 Cal.App.5th at p. 494.)

Because Defendants were justified in seeking to recover their reasonable attorney’s fees for services rendered, Plaintiff fails to present evidence of independent wrongful conduct sufficient to sustain a claim for interference with contractual relations. Here, Defendants suggested alternatives to settle the fee dispute. That alternatives would result in litigation that would delay the disbursement of the settlement proceeds to Plaintiff is insufficient to sustain a claim for contractual interference with contractual relations. (See Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1123 [“We have concluded that to allow either cause of action to be stated when the only interference alleged is that defendant induced the bringing of potentially meritorious litigation would be an unwarranted expansion of the scope of these torts and a pernicious barrier to free access to the courts.”].)

Defendants also argue that Plaintiff cannot establish damages and proximate causation. Defendants present evidence that the medical liens, totaling $259,892.00, exceeded the settlement amount of $250,000.00 and that Plaintiff is not entitled to a net settlement. (Campo. Decl. Ex. 7 [Plaintiff’s SROGS Nos. 3-4].) Defendants also present evidence that the largest lien is owed to Dr. John Chiu, totaling $244,622.00, and that the lien remains outstanding. (Movagar Decl. Ex. E; Schelchet Decl. ¶ 4, Ex. 1.) Moreover, Brown and CLG claim a fee of $112,500.00 under their retainer agreement (Movagar Decl. Ex. B.) In addition, Plaintiff took out a loan and owes over $11,000.00 in loan repayments to Golden Pear Funding. (Campo Decl. Ex. 1.)

Defendants have presented sufficient evidence that Plaintiff is not entitled to any of the net proceeds from the settlement and that the harm he suffered would have occurred regardless of Defendants’ actions. Moreover, Defendants provided evidence that Plaintiff received a portion of the settlement proceeds because Brown issued two checks totaling $65,000.00 to Plaintiff, dated August 20, 2021, and January 28, 2022. (Campo Decl. Ex. 2 [Plaintiff’s SROGS No. 25], 4.) Despite receiving $65,000.00, Plaintiff still alleges he was harmed, and that Defendants’ conduct caused him to experience prolonged homelessness and emotional harm. The court finds that Defendants have shown a lack of proximate causation between Defendants’ actions and Plaintiff’s harm. Therefore, the burden shifts to Plaintiff to prove proximate causation.

Plaintiff argues that because the medical lienholders often accept compromises for less than the amount owned, Plaintiff could still be entitled to funds from the settlement proceeds. (Brown Decl. ¶ 42.) The possibility that Brown might yet settle the $244,622.00 lien owed to Dr. John Chiu for less than what is owed, does not establish that Plaintiff is entitled to the portion of the settlement proceeds. Moreover, Plaintiff already received $65,000.00 from the settlement proceeds. Plaintiff has not presented evidence that he would have been entitled to a sum greater than that amount.

The delay in Plaintiff’s receipt of the settlement proceeds is not evidence of an independent wrong sufficient to sustain a claim for contractual interference or that Defendants proximately caused Plaintiff’s harm. (See Lanc Decl. ¶ 21.)

For the reasons stated above, summary adjudication of the first cause of action is granted.

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages. Conversion is a strict liability tort. The foundation of the action rests neither in the knowledge nor the intent of the defendant. Instead, the tort consists in the breach of an absolute duty; the act of conversion itself is tortious. Therefore, questions of the defendant's good faith, lack of knowledge, and motive are ordinarily immaterial. [Citations.]” (Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383.)

Defendants argue that the second cause of action fails because Plaintiff has no possessory interest in the attorney fee sum such that Defendants could not dispossess Plaintiff of any property. Defendants cite no legal authority to support this assertion. That Plaintiff does not have a possessory interest in the attorney fee sum retained by Brown does not mean that Plaintiff has no possessory interest in the remaining settlement funds or that the recovery Defendants seek in reasonable attorney’s fees will come from the attorney fee portion allocated to Brown.

Defendants offered evidence that they are not in possession of the settlement proceeds and they have never received any payment from the settlement proceeds. (Movagar Decl. ¶ 12.) Brown has already received his $112,500.00 in fees on August 19, 2021. (Campo Decl. ¶ 5, Ex. 3.) Brown has also already made disbursements of the settlement proceeds to Plaintiff and negotiated compromises on the medical liens. ((Movagar Decl. Ex. F-G.) There is no evidence Defendants have possession of Plaintiff’s property or have exercised dominion over such property sufficient to sustain a claim for conversion. (See Plummer v. Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 50 (Plummer).)

As Defendants are entitled to recover reasonable attorney’s fees for services rendered, there would be no wrongful act or disposition of property rights if Defendants recovered fees from Plaintiff’s settlement.

The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th¿594, 604.)

Plaintiff’s Complaint alleges that the Defendants’ breached the fiduciary relationship between attorney and client by depriving Plaintiff of the receipt and possession of the settlement payments. (Compl. ¶ 50.)

Defendants assert there was no breach because they were entitled to preserve their own interest in the payment of its fees by requesting inclusion on the settlement check. Furthermore, Defendants argue there is no evidence of damage to Plaintiff proximately caused by Defendants seeking to recover their fees.

The court agrees. The burden now shifts to Plaintiff to show Defendants had no legal right to receipt and possession of Plaintiff’s settlement payments. Plaintiff fails to satisfy this burden.

First, Business & Professions Code § 6147(b) recognizes that despite a contingency agreement being void, the attorney remains entitled to collect a reasonable fee. Second, in Plummer, the Court of Appeal found that an attorney who places a lien on a client’s prospective recovery does not violate rule 3-300 of the Rules of Professional Conduct despite acquiring an interest that is adverse to the client. (Plimmer, supra, 184 Cal.App.4th at p. 49-50 [“In the absence of contrary binding authority, we adopt the California State Bar's sound reasoning. A contingency fee agreement, such as the retention agreement here, need not comply with rule 3–300 to create an attorney's lien. Plummer's lien is not invalid for violating that rule. Day/Eisenberg thus fails to show Plummer had no right to possess the settlement funds as a matter of law.”].) Lastly, in Fracasse, the California Supreme Court recognized that a discharged attorney is entitled to recover the reasonable value of his services. (Fracasse, supra, 6 Cal.3d at p. 792.)

The court finds that Defendants have not breached their fiduciary duty to Plaintiff by seeking to recover their reasonable attorney’s fees because Defendants are entitled to seek reimbursement for services rendered. Lastly, as explained above, the court also agrees that Plaintiff fails to establish causation due to Defendants exercising their right to recover their fees or that Defendants did in fact take possession of Plaintiffs’ settlement payments.

To state a declaratory relief claim, the plaintiff must allege a proper subject of declaratory relief and an actual controversy involving justiciable questions relating to the party’s rights or obligations. (See CCP, § 1060; Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.) “The fundamental basis of declaratory relief is the existence of an actual, present controversy over a proper subject.” (Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556, 562 [internal citations and quotations omitted].) A declaratory judgment serves to quiet or stabilize a potential justiciable dispute. (See Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 364.)

“Plaintiff desires a declaration of his rights with respect to the defendants, and each of them, as to M&Y’s lien rights if any and SAFECO’s obligation to distribute settlement funds in accord with the court’s declaration of contractual rights and duties.” (Comp. ¶ 58.) Defendants argue that Plaintiff’s declaratory relief claim is superfluous because the issues are fully engaged in other causes of action. (See Hood v. Superior Court (1995) 33 Cal.App.4th 319, 324.)

As seen below, the court grants summary adjudication on the first through third and fifth through sixth causes of action. Plaintiff has no other viable claims in which to resolve the issue of whether Defendants have a right to a portion of the settlement funds. The court finds that a present controversy exists that can be decided in this action regarding whether Defendants are entitled to recover their attorney’s fees and in what amount.

As Defendants have failed to show that no triable issue of fact exists as to the fourth cause of action, summary adjudication is denied.

E. Fifth and Sixth Causes of Action – Intentional Infliction of Emotional Distress and Negligent Infliction of Emotional Distress

The tort of intentional infliction of emotional distress (“IIED”) is committed when the defendant's conduct is intentionally intrusive and outrageous and has a traumatic effect on the plaintiff’s emotional tranquility. (Alcorn v. Anbro Engineering (1970) 2 Cal. 3rd 493, 498.) “[B]ehavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress.” (Bogard v. Employers Cas. Co. (1985) 164 Cal. App.3d 606, 616.) California courts have repeatedly recognized that negligent infliction of emotional distress (“NIED”) is not an independent tort, but the tort of negligence such that the traditional elements of duty, breach of duty, causation, and damages apply. (See, e.g., Spates v. Dameron Hospital Association (2003) 114 Cal.App.4th 208, 213; Marlene F. v. Affiliated Psychiatric Medical Clinic, Inc. (1989) 48 Cal.3d 583, 588.)

Defendants argue that emotional distress damages are not recoverable against an attorney. However, the court agrees with Plaintiff’s observation that the cases cited by Defendants merely hold that in a legal malpractice action, emotional distress damages are not recoverable. (See, e.g., Merenda v. Superior Court (1992) 3 Cal.App.4th 1, 10 (Merenda) disapproved in part by Ferguson v. Lieff, Cabraser, Heimann & Bernstein (2003) 30 Cal.4th 1037; Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1038-39 (Smith).)

Despite Defendants failing to cite case law that emotional distress damages are never recoverable against an attorney, the court finds that Defendants have presented sufficient evidence that they were entitled as a matter of law to recover their attorney’s fees and that such conduct is not evidence of extreme and outrageous sufficient to support claims for IIED and NIED. (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1378 [Holding that “serious emotional distress” required for negligent infliction of emotional distress is functionally the same as “severe emotional distress” required for intentional infliction of emotional distress.”].) Thus, the burden shifts to Plaintiff to show that it has a viable claim for IIED and NIED against Defendants.

Plaintiff fails to show that case law supports a finding that emotional distress damages are available against an attorney in fee dispute cases, where similar to a legal malpractice case, “the interest of the client is economic, [and] serious emotional distress is not an inevitable consequence of the loss of money and, as noted, the precedents run strongly against recovery.” (Merenda, supra, 3 Cal.App.4th p. 10; see also Smith, supra, 10 Ca.App.4th at p. 1039.)

In Erlich v. Menezes (1999) 21 Cal.4th 543, the California Supreme Court held found that “damages for mental suffering and emotional distress are generally not recoverable in an action for breach of an ordinary commercial contract in California. [Citation.] ‘Recovery for emotional disturbance will be excluded unless the breach also caused bodily harm or the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result.’ [Citation.]” (Id. at p. 558-559.)

Here, Plaintiff fails to present evidence that Defendants’ actions in seeking to recover their attorney’s fees constituted severe and outrageous conduct sufficient to support claims for IIED and NIED. Thus, summary adjudication is granted as to the fifth and sixth causes of action.

Punitive damages may be imposed where it is proven by clear and convincing evidence that the

defendant has been guilty of oppression, fraud, or malice. (Civ. Code, § 3294 (a).) “Malice” is defined in Civil Code § 3294(c)(1) as “conduct which is intended by the defendant to cause injury” or “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” “Oppression” is as “despicable conduct subjecting a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294(c)(2).) The term “despicable” has been defined in the case law as actions that are “base,” “vile,” or “contemptible.” (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 891.) Fraud means “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code, § 3294(c)(3).)

“[S]ummary judgment ‘on the issue of punitive damages is proper’ only ‘when no reasonable jury could find the plaintiff's evidence to be clear and convincing proof of malice, fraud or oppression.’ [Citation].” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1053.)

Defendants argue that the Complaint lacks sufficient facts that Defendants’ conduct was malicious, fraudulent, oppressive, or with conscious disregard to Plaintiff’s rights. “Mere negligence, even gross negligence, is not sufficient to justify such an award” for punitive damages. (Kendall Yacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949,958.) The burden shifts to Plaintiff to offer evidence that a jury could find by clear and convincing evidence that Defendants’ conduct is malicious, fraudulent, or oppressive.

Plaintiff’s opposition states in conclusory fashion that “Plaintiff has proffered evidence that defendants maliciously, willfully and in conscious disregard of plaintiff’s rights asserted an unlawful charging lien, and obstructed efforts to disburse the appropriate amount of settlement proceeds to plaintiff. That conduct pushed plaintiff into homelessness and caused him emotional distress. This is sufficient to meet plaintiff’s burden, and defendants’ substitute motions should be denied.” (Opp. at p. 17:14-18.) Plaintiff fails to show that Defendants’ conduct in placing a charging lien on the settlement proceeds and delaying payment of the settlement proceeds was malicious, oppressive, or fraudulent.

As explained above, Plaintiff has failed to show that he is entitled to a portion of the settlement proceeds since one medical lien remains outstanding. Secondly, Defendants have a legal right to seek payment for services rendered even if it would harm Plaintiff’s economic interests. Third, Plaintiff’s evidence of malicious or oppressive conduct refers only to the financial and mental hardships Plaintiff suffered and fails to show that Defendants proximately caused said hardship. (See Lank Depo. at pp. 14:17-19, 15:24- 16:1, 68:9-16, 69:10-25; 70:3-6, 70:24-71:7, 71:18-23, 72:21-24; 77:8-14,78:16-79:3; 111:1- 10; Candiotti Depo. at pp. 24:7-11, 25:12-15, 43:21-44:2, 44:16-45:25.) The fact that Defendants’ conduct had a “domino effect” that led to Plaintiff’s hardships, is insufficient evidence that Defendants proximately caused Plaintiff’s harm. (See Lank Depo. at p. 69:17, 23-25.)

“‘Punitive damages by definition are not intended to compensate the injured party, but rather to punish the tortfeasor whose wrongful action was intentional or malicious, and to deter him and others from similar extreme conduct.’” (Ferguson v. Lieff, Cabraser, Heimann & Bernstein (2003) 30 Cal.4th 1037, 1046 citing City of Newport v. Fact Concerts, Inc. (1981) 453 U.S. 247, 266–267.) Here, Plaintiff’s economic and emotional distress stemmed from a fee dispute and Plaintiff fails to present evidence that Defendants’ conduct was intentionally or maliciously wrongful to support a claim for punitive damages. Moreover, Plaintiff fails to show that a triable issue of fact exists that precludes the summary adjudication on the issue of punitive damages.

Defendants’ motion for summary adjudication is granted as first, second, third, fifth, and sixth causes of action and Plaintiff’s claim for punitive damages. Summary adjudication is denied as to the fourth cause of cause of action for declaratory relief.

[1] Defendants did not submit any evidentiary objections when filing their new reply.

[2] The following facts are undisputed unless otherwise noted.

[3] See Matter of Feldsott (Cal. Bar Ct., Oct. 17, 1997) 97 Cal. Daily Op. Serv. 8236 [“Section 2913 provides that the voluntary restoration of property to its owner by the holder of a lien on the property that is dependent upon possession extinguishes the lien as to (1) the creditors of the owner and (2) anyone thereafter acquiring the property from the owner in good faith for value.