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Keywords

contractbreach of contractplaintiffdefendantattorneyappealmalpracticeunjust enrichment
plaintiffdefendantattorneylawyermalpracticewill

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Huskinson & Brown v. Wolf, 32 Cal.4th 453, 84 P.3d 379, 9 Cal.Rptr.3d 693, 04 Cal. Daily Op. Serv. 1473, 2004 Daily Journal D.A.R. 2254

Facts

Plaintiff Huskinson & Brown, a law firm, provided legal services to Beverly Sanchez in a medical malpractice case, referring her to defendants Mervyn H. Wolf and Appell & Wolf. The plaintiff performed 20 hours of legal work and paid $800 to a medical expert, expecting to receive 25% of the attorney fees from the defendants based on an oral agreement. After Sanchez won a $250,000 judgment, the defendants failed to pay the agreed amount, leading the plaintiff to sue for breach of contract, unjust enrichment, and quantum meruit.

Plaintiff Huskinson & Brown is a law firm that specializes in defending health care providers. Beverly Sanchez approached plaintiff with a potential medical malpractice claim against a health care provider. Plaintiff referred the matter to defendants Mervyn H. Wolf and the law firm of Appell & Wolf.

Issue

Whether a law firm can recover in quantum meruit for legal services rendered when the fee-sharing agreement between the firms violated professional conduct rules requiring written client consent.

The central issue here is whether, in the absence of written client consent to an agreement between law firms to divide fees, a law firm that is barred from dividing fees under 2 rule –200 may nonetheless recover from the other law firm in quantum meruit for the reasonable value of services it rendered to advance the client's case.

Rule

Rule 2–200 of the California Rules of Professional Conduct prohibits attorneys from dividing fees without written client consent after full disclosure of the terms, but does not categorically bar recovery in quantum meruit for services rendered.

Rule 2–200 Rule 2–200 provides in relevant part that a member of the State Bar 'shall not divide a fee for legal services with a lawyer who is not a partner of, associate of, or shareholder with the member unless … [¶] … [t]he client has consented in writing thereto after a full disclosure has been made in writing that a division of fees will be made and the terms of such division ….'

Analysis

The court analyzed whether allowing quantum meruit recovery would undermine the purpose of Rule 2–200, which is to protect clients' rights to know how their fees are determined. The court concluded that a quantum meruit award does not constitute a division of fees as it compensates for the reasonable value of services rendered, rather than apportioning client-paid fees. Thus, the plaintiff could recover for the services provided despite the lack of a valid fee-sharing agreement.

To resolve this issue, we look first to rule 2–200 rule 2–200 to ascertain what it seeks to accomplish. By its terms, the rule expressly prohibits attorneys from 'divid[ing] a fee for legal services' when certain requirements, such as written client consent to the fee division after a full written disclosure of its terms, have not been met.

Conclusion

The California Supreme Court reversed the Court of Appeal's decision, allowing the plaintiff to recover the reasonable value of the legal services rendered in quantum meruit, despite the invalidity of the fee-sharing agreement.

We conclude that, even though rule 2–200 rule 2–200 precludes plaintiff from recovering on its fee-sharing agreement with defendants, plaintiff may nonetheless recover from defendants the reasonable value of the legal services it rendered on the client's behalf.

Who won?

Plaintiff Huskinson & Brown prevailed in the case because the Supreme Court determined that the lack of a written fee-sharing agreement did not preclude recovery for the reasonable value of services rendered.

Plaintiff Huskinson & Brown prevailed in the case because the Supreme Court determined that the lack of a written fee-sharing agreement did not preclude recovery for the reasonable value of services rendered.

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