Judge Teresa A. Beaudet, Case Number: 22STCV15251, Date: 2024-08-08 Tentative Ruling

This matter came on for trial on April 17-23, 2024, in Department 50 of the above-entitled Court before the Hon. Teresa A. Beaudet, sitting without a jury. The Court, having considered the evidence and read the arguments of counsel, issues this tentative and proposed Statement of Decision. This tentative and proposed Statement of Decision will become the Statement of Decision unless, within 15 days hereafter, a party serves and files objections to the proposed Statement of Decision.

A. Did Defendant Kurshid Khan Muhammad (“Defendant”) breach the contingency retainer agreement (the “Agreement”) he entered into with Plaintiff Law Offices of Ramin R. Younessi (“Plaintiff”) by failing to pay Plaintiff $101,250.00 in attorney fees and $8,054.16 in costs due under the Agreement?

B. Did Plaintiff forfeit the right to enforce the Agreement by voluntarily withdrawing from the representation of Defendant in the case Defendant brought against his former employer, AltaMed Health Services Corporation (the “AltaMed Case”)?

C. If Plaintiff cannot enforce the Agreement, is Plaintiff entitled to recover fees and costs based on promissory estoppel, quantum meruit or unjust enrichment?

Defendant never disputed he entered into a valid agreement for legal services with Plaintiff on July 8, 2019. From July 8, 2019, to May 26, 2021, Defendant did not claim that the terms of the Agreement were vague or unenforceable. From July 8, 2019 through May 26, 2021 Plaintiff fully performed under the Agreement with Defendant’s knowledge that Plaintiff was performing legal services on behalf of and for the benefit of Defendant. Plaintiff obtained a Right to Sue Letter from the California Department of Fair Employment and Housing on June 18, 2020 and served the Right to Sue Letter on AltaMed. Plaintiff thereafter filed a lawsuit on Defendant’s behalf against AltaMed for discrimination and related causes of action on August 18, 2020. Back and forth communications transpired between Plaintiff and AltaMed’s legal counsel in connection with Defendant’s lawsuit as part of the litigation process. During this time, Plaintiff was in communication with Defendant himself regarding the case and how it was proceeding.

In an effort to avoid protracted litigation and reach an early agreeable resolution of Defendant’s case against AltaMed, the parties agreed to participate in mediation. With Defendant’s consent, the all-day mediation took place on May 26, 2021. Defendant was an active participant in the proceedings. The mediation resulted in a gross settlement amount being agreed upon between Defendant and his former employer AltaMed. Defendant was presented with settlement documents which included a long-form agreement and an MOU. Both documents were explained to him. Defendant signed the MOU which memorialized the parties’ settlement. At the conclusion of the mediation on May 26, 2021, when the MOU was executed, the services to be rendered by Plaintiff to Defendant were concluded.

The Court finds that Defendant breached the Agreement by failing to pay Plaintiff the $101,250.00 in attorney fees and $8,054.16 in costs due under the Agreement. In accordance with the Agreement, Plaintiff had represented Defendant in the AltaMed case through the settlement at the mediation. After agreeing to the terms of the settlement and signing a binding MOU, Defendant refused to perform his part under the MOU. Thereafter, Defendant also refused to pay Plaintiff the attorney fees and costs in breach of the Agreement.[1]

B. Did Plaintiff Forfeit the Right to Enforce the Agreement by Withdrawing from the Representation of Defendant?

The Court finds that Plaintiff did not forfeit the right to enforce the Agreement by withdrawing from the representation of Defendant. When Defendant insisted upon asserting a position in the AltaMed Case that lacked probable cause, under the State Bar Rules of Professional Conduct, Plaintiff was required to withdraw from representation of Defendant.

C. Is Plaintiff Entitled to Recover Fees and Costs Based Upon Promissory Estoppel, Quantum Meruit or Unjust Enrichment?

Even if Plaintiff could not recover under a breach of contract theory, Plaintiff would be entitled to recover its fees and costs pursuant to Quantum Meruit.

As an alternative to an action on the express contract, an attorney may sue on the basis of quantum meruit to recover for the reasonable value of the attorney’s services. See, Hardy v. San Fernando Valley Chamber of Commerce (1950) 99 Cal.App.2d 572, 576-577. Even if a fee contract is void as against public policy, an attorney may still recover in quantum meruit for the reasonable value of the services that were rendered under the contract. (Rosenberg v. Lawrence (1938) 10 Cal.2d 590, 593-594); (Calvert v. Stoner (1948) 33 Cal.2d 97, 104-105); see also, Denton v. Smith (1951) 101 Cal.App.2d 841, 844-845. A quantum meruit fee is based on the reasonable value of services rendered rather than the amount due under a contract or the “resulting benefit” of services performed. (Earhart v. William Low Co. (1979) 25 Cal.3d 503, 505). To recover on a quantum meruit theory, an attorney must establish that: (1) the plaintiff attorney was acting pursuant to either an express or implied request for such services from the defendant; and (2) the services rendered were intended to and did benefit the defendant. Day v. Alta Bates Med. Ctr. (2002) 98 Cal.App.4th 243, 248-249; Huskinson & Brown, LLP v. Wolf (2004) 32 Cal.App.4th 453, 458 [attorney must show services were rendered under some understanding or expectation of both parties that compensation would be paid.]

The starting point for determining a “reasonable fee” is the “number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer’s services.” Mardirossian & Assocs., Inc. v. Ersoff (2007) 153 Cal.App.4th 257, 272; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 [“lodestar is the basic fee for comparable legal services in the community.”] In the case of attorney discharge, when such discharge occurs “on the courthouse steps” where the client executes a settlement obtained after work by the attorney, the factors involved in determination of a reasonable fee “would certainly justify a finding that the entire fee was the reasonable value of the attorney’s services.” (Fracasse v. Brent (1972) 6 Cal.3d 784, 791). Recovery under quantum meruit is not limited to hours spent. The pro rata contract price measure allows a party to recover the “benefit of the bargain” to the extent the contract has been performed. (Cazares v. Saenz (1989) 208 Cal.App.3d 279, 290).

Plaintiff seeks the benefit of Plaintiff’s written agreement with Defendant. Plaintiff seeks the full contingency fee of 45% of the gross settlement of $225,000.00, or $101,250.00. Plaintiff performed valuable legal services on Defendant’s behalf in reliance on the parties’ agreement. Plaintiff assumed the risk if there was no recovery on Defendant’s behalf, then Plaintiff would receive no fee as that was the risk Plaintiff bore. Defendant received a financial monetary recovery benefit through Plaintiff’s work and efforts, which monetary recovery Defendant agreed to accept when he signed the MOU. That settlement was upheld by the underlying trial court and the court ordered AltaMed to pay the agreed gross settlement proceeds to Defendant. He received the full amount of his share of the undisputed settlement proceeds to which he was entitled under the Agreement. Consequently, the Court finds that Plaintiff is entitled to recover the value of the services rendered under the quantum meruit theory.

The Court finds in favor of Plaintiff and awards damages in the amount of $101,250.00 in attorney fees and $8,054.16 in costs. The Court also finds that Plaintiff has a valid and enforceable lien against the settlement proceeds from the AltaMed Case.

Within ten days after this Statement of Decision becomes final, Plaintiff is ordered to file and serve a proposed judgment in accordance with these findings (with a courtesy copy delivered to Dept. 50). The Court hereby dismisses the Doe defendants.

Plaintiff is ordered to give notice of this tentative and proposed Statement of Decision.

[1] The Court notes that Defendant understood that Plaintiff had a lien for services rendered and costs advanced (Plaintiff’s Second Cause of Action) given that Defendant initialed Section 8 of the Agreement.

Superior Court of California

County of Los Angeles

Department 50