Judge: Stephen P. Pfahler, Case: 22CHCV00244, Date: 2022-10-28 Tentative Ruling

Case Number: 22CHCV00244    Hearing Date: October 28, 2022    Dept: F49

Dept. F-49

Date: 10-28-22

Case # 22CHCV00244

Trial Date: Not Set

MOTION TO STRIKE COMPLAINT

MOVING PARTY: Defendant, Steffanie Stelnick

RESPONDING PARTY: Plaintiff, Bruce Saunders

RELIEF REQUESTED

Motion to Strike Complaint

·         “Costs and payments made to cover the multiple years of frivolous litigation”

·         “For Disgorgement of Attorney Fees”

SUMMARY OF ACTION [Summary of Complaint]

Plaintiff Bruce Saunders alleges defendant Steffanie Stelnick provided legal representation on an action titled Saunders v. Global Aerospace Technology Corp., et al. (PC057761), without ever executing a retainer agreement. The case was dismissed following a March 21, 2019, demurrer sustained without leave to amend, which led to entry of an attorney fee judgment of $54,375.

Following the dismissal, and without the permission of Defendant, Defendant filed a second “shareholder complaint” on June 24, 2019—Saunders v. Cormier (19CHCV00525).

All communications allegedly occurred between Defendant and Plaintiff’s unnamed daughter. The daughter was also allegedly employed, at least during part of the operative period, as a paralegal with Defendant, until November 29, 2019.

Although Defendant and the daughter communicated, on August 12, 2021, Plaintiff retained new counsel on the action. A settlement agreement was executed on March 4, 2022. Plaintiff alleges the delays in prosecuting the action, and attorney fee judgment, reduced the potential value of the settlement.

On April 11, 2022, Plaintiff filed a complaint for Breach of Fiduciary Duty and Negligence.

RULING: Granted.

Defendant Steffanie Stelnick moves to strike the claims for “Costs and payments made to cover the multiple years of frivolous litigation” and prayer “For Disgorgement of Attorney Fees.” Defendant moves to strike on grounds that disgorgement of fee claims are “typically” only permitted in conflict of interest cases, and nothing in the subject action alleges a conflict of interest. Defendant also challenges the lack of any allegations regarding the payment of any actual fees.

Plaintiff in opposition counters that the complaint sufficiently alleges a claim for “disgorgement of excessive attorney’s fees charged to Plaintiff.” Plaintiff reiterates the allegations of the complaint, including the damages claim. Defendant in reply challenges the complaint and opposition on grounds that disgorgement remains limited to conflict of interest cases, and will not serve as a remedy for claims regarding the competency of counsel. Defendant reiterates the lack of any allegation regarding any actual payment to Defendant.

The court declines to consider the standard for “disgorgement” under the “egregious” standard. The argument relies on extrinsic inference.

The complaint itself lacks allegation of any actual payment of attorney fees. Plaintiff denies any retainer agreement for either filed complaint, yet pleads the existence of a contingency agreement for the first action. No basis of agreement is stated for the second filed complaint, except for a passing reference that Defendant “would not charge” for this action, and Plaintiff’s daughter could also offer “pro bono” assistance. The complaint additionally lacks any allegation regarding acceptance of the proposed fee agreement prior to the substitution of new counsel on the second action. [Comp., ¶¶ 7, 11, 13, 18, 21.] Thus, nothing in the complaint alleges any actual charge or payment of attorney fees, and instead only reiterates the damages claims allegedly caused, at least in part, by the delays in adjudication of the action. The court declines to consider unstated allegations. The motion to strike is granted on grounds of no stated basis for the disgorgement for nonpaid/nonexistent fees.

Plaintiff is granted 30 days leave to file a new complaint in support of the struck disgorgement claims only.

If Plaintiff declines to file a new complaint within the time frame, Defendant is ordered to answer the complaint within 10 days of the lapsed period for amendment.

Defendants to give notice.