Olsen v. Harbison
191 Cal. App. 4th 325
Cal. Ct. App.2010Background
- Client hired plaintiff Olsen for a personal injury action and later associate counsel Harbison was brought in with a fee-sharing arrangement.
- Klawitter (the client) signed a rule 2-200 consent form authorizing fee sharing, giving defendant two-thirds or 60% depending on outcome; plaintiff 40% or 1/3 if trial.
- Klawitter fired Olsen and retained Harbison; case settled for $775,000 with Olsen not receiving fees.
- Olsen alleged six causes of action including quantum meruit, breach of contract, fraud and deceit, intentional interference with contractual relations, and constructive trust.
- Trial court sustained demurrers and granted summary adjudications in favor of Harbison; final judgment was entered for defendant, which Olsen appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Quantum meruit against the associate attorney | Olsen sought reasonable value of services rendered to Klawitter by Olsen, alleging defendant’s failure to pay and unjust enrichment. | No quantum meruit against defendant since Olsen performed for Klawitter, not Harbison; fee-sharing under Rule 2-200 invalid without client consent. | Demurrer proper; no quantum meruit against Harbison because services were rendered to Klawitter via Olsen. |
| Fraud and deceit and related communications | Defendant made false representations to induce Olsen to associate in Klawitter action with intent to claim all fees. | Communications fall within the litigation privilege and are immune from such claims. | Litigation privilege bars fraud and deceit claims as to communications connected to Klawitter litigation. |
| Interference with contractual relations | Defendant’s statements interfered with Olsen’s contract with Klawitter. | Privilege applies; no viable interference claim because communications related to litigation. | Summary adjudication upheld; privilege bars the claim. |
| Breach of contract (fee-sharing agreement) | Fee-sharing agreement survived Klawitter’s discharge and bound Harbison to pay Olsen a share. | Contractual obligations extinguished when Klawitter discharged Olsen; no ongoing contract post-discharge. | No breach; fee-sharing agreement extinguished with discharge; no contractual duty thereafter. |
| Unjust enrichment/constructive trust | If tort/contract claims revive, constructive trust could be imposed on defendant for funds. | No viable predicate entitlement remaining; none reinstated. | Constructive trust not appropriate; claims not reinstated. |
Key Cases Cited
- Huskinson & Brown v. Wolf, 32 Cal.4th 453 (Cal. 2004) (quantum meruit when fee division is unenforceable; recover from co-counsel OK)
- Fracasse v. Brent, 6 Cal.3d 784 (Cal. 1972) (quantum meruit remedy when contract unenforceable)
- Strong v. Beydoun, 166 Cal.App.4th 1398 (Cal. App. 4th 2008) (adverse party requirement not always necessary for recovery against fee-sharing co-counsel)
- Levin v. Gulf Ins. Group, 69 Cal.App.4th 1282 (Cal. App. 1999) (cocontract issues in insurance/defense context (illustrative))
- Mattco Forge, Inc. v. Arthur Young & Co., 5 Cal.App.4th 392 (Cal. App. 1992) (litigation privilege and cocounsel protections context)
- Joseph A. Saunders, P.C. v. Weissburg & Aronson, 74 Cal.App.4th 869 (Cal. App. 1999) (cocounsel relationship and privilege relevance)
- Scalzo v. Baker, 185 Cal.App.4th 91 (Cal. App. 2010) (litigation privilege scope in prelitigation contexts)
- Edwards v. Centex Real Estate Corp., 53 Cal.App.4th 15 (Cal. App. 1997) (prelitigation communications linked to litigation privilege)
- Action Apartment Assn., Inc. v. City of Santa Monica, 41 Cal.4th 1232 (Cal. 2007) (broad scope of litigation privilege in judicial proceedings)
- Silberg v. Anderson, 50 Cal.3d 205 (Cal. 1990) (litigation privilege immunizes communications in litigation)
- Rothman v. Jackson, 49 Cal.App.4th 1134 (Cal. App. 1996) (communication nexus to litigation required)