*1 Dist., Div. One. Aug. No. 45399. Second 1975.] [Civ. GASTON, Plaintiff AND
DUNNE Appellant, KELTNER, Defendant H. DONALD Respondent.
Counsel Brand, Jr.,
Dunne & Gaston and F. Warde for Plaintiff and Appellant. Schreiber, & & Goodheart and Edwin C. Schreiber for Kregal Defendant and Respondent.
Opinion defendant’s withdrawal LILLIE, J. plaintiff, In conjunction entered into an law agreement pertaining they continuing successful would receive fee defendant to the share of an Later firm. case retained a certain termination of (Brower) by plaintiff counsel who settled it took 60 referred case to other their A arose total fee as share. dispute the fee was to diminished defendant’s whether accordingly, portion It relief.1 from the filed this action thus declaratory appeals *3 adverse judgment. defendant, an a law
The facts are Plaintiff is partnership; undisputed. which at one time and were during Wayne attorney, plaintiff partners defendant; this contact the Brower, a contacted through seeking lawyer, it thereafter referred firm Brower’s case which Gaston-Keltner obtained Dunne, In 1969 a new law then an associate. to another not lawyer, Keltner, Gaston, Dunne a of and was formed consisting partnership from the fourth who withdrew eventually partnership lawyer, Bringgold, a action. On June and never became to this Partnership a herein executed document titled “Amendment Agreement reciting Bringgold, Dunne, Keltner” of Gaston & and a withdraw from defendant was to provision partnership with- of this After defendant’s 10),2 litigation. subject (paragraph from the referred the Brower cause to drawal partnership plaintiff firm; in entered and that firm into a another this legal respect plaintiff was written to receive of percent agreement whereby plaintiff Brower, of the firm share and by handling attorneys’ any recovery case, the latter firm settled Brower’s case thereof. Ultimately $98,771.73. fee of Under which resulted in a total for a attorney’s figure $39,508.68 firm, of received out with the plaintiff plaintiff’s to be one-sixth of what was fee defendant sent reputed whereupon but that under sum, $6,584.78, he retained advised this and owed to him under Defendant for a different sum cross-complained separate This sum is included in another he was entitled thereto. obligation; plaintiff stipulated not at but is issue on judgment, appeal. certain has the partnership CASES. Keltner into brought 2“10. PERSONAL INJURY cases, all which are on set forth Exhibit attached personal injury hereto and ‘B\ herein reference. KELTNER shall by take with him as his own incorporated cases those on said leave so indicated Exhibit and shall those partnership personal ‘B\ so indicated cases on Exhibit those cases left for the injury being ‘B\ DUNNE, GASTON, & BRINGGOLD and will said KELTNER the jointly severally Exhibit fees recovered on said cases as set forth on *-B\ in that a lien the fees particular fees will become paid said GASTON, DUNNE, hold KELTNER & jointly severally case. BRINGGOLD made DE excess of by or claim DAVID LOACH harmless other KELTNER and'will suffered damages on these cases pay any KELTNER’S Exhibit “B” to therewith.” a reasonable incurred connection including attorney’s.fee CASES Retained contained Partnership,” titled INJURY “PERSONAL Fee to vs. HARDING Referral “WAYNE BROWER the following pertinent language: 1/6” KELTNER one-sixth himself entitled to he believed 10 of their paragraph $16,461.95. a total of of the entire attorneys’ recovery, The that the of this cause rests resolution entirely parties stipulated construction of 10 of this proper paragraph agreement.3 10 as trial court providing interpreted defendant, one-sixth of the entire attorneys’ recovery paid that after defendant withdrew as of the circumstance partner regardless reduced new firm made an share; which awarded and entered judgment plaintiff’s corresponding entitled the difference the sum to which he was thus defendant between which he had The trial court took no arid that by plaintiff. paid *4 extrinsic evidence as to the intent of the in connection parties 10, the that the cause be submitted paragraph parties having stipulated without oral thus construction of testimony; provision presented of law. We are not bound the court’s construction (Ecco- question White, Inc., 266, Phoenix Electric v. Howard 1 272 J. Cal.3d Corp. [81 Ltd., 234, 849, 461 56 P.2d Prickett v. Ins. Co. Cal.2d 33]; Royal Cal.Rptr. 675, 907, 237 363 P.2d 86 v. A.L.R.2d State 711]; Meyer [14 Cal.Rptr. 376, Board 42 Cal.2d 381 P.2d but our 257]) Equalization, [267 accord therewith. of the 10 is in interpretation paragraph that at the time the There is in the record to show intended, or even was executed the contemplated, agreement parties firm Brower’s case was to be referred to another legal subsequently trial court which would also share in the total (the no intention)4; found that there was such stipulated expressly new entered into the facts establish that firm to the execution of containing agreement paragraph subsequent Moreover, after there is 10 and defendant had withdrawn as partner. consented to this new no that defendant thereafter showing personally that defen- referral and The trial court found fee-sharing arrangement. 3Each contends that other agreement, including party vigorously “prepared” 10, and that of its terms must be construction accordingly ambiguous 1654, The record does not the other to section Civil Code. against pursuant applied resolve the deemed to be the but of who should be “preparer,” plainly question and it has the terms of the instrument were evolved through negotiations; discloses that arrived at held that when an is by negotiating, “preparer” principle 369, Evans, (Indenco, Inc. v. 201 either Cal.App.2d not be against party. should applied 90].) 375 Cal.Rptr. [20 had reason to believe KELTNER no 4“At time dissolution and, him to could the case to the contrary, rightfully expect DUNNE would not handle 14B.) do so.” (Finding 564 .5 One vital
dant not even been in this had consulted respect element in the construction of a contract is the intention of the parties execution; the court relation to its and in this intention may determining look to the circumstances surrounding making nature, matter of the including object, subject writing, itself’ for this in the same situation in which the thereby “place purpose Code, 1647; found themselves at the time of (Civ. § contracting. Proc., 1860; Code Civ. E. Co. v. G. W. Thomas Gas & § Drayage Pacific Co., 33, 38, 561, 641, etc. 5 442 P.2d 40 69 Cal.2d fn. Cal.Rptr. [69 Co., etc. 20 Cal.2d A.L.R.3d Universal Sales v. Cal. 1373]; Mfg. Corp. Williams, 751, 368, 29 761 P.2d In re 665]; Cal.App.3d Marriage [128 1, 8 P.2d v. 77 406]; Jegen Berger, Cal.App.2d [174 Cal.Rptr. [105 circumstance, an and client In an wherein 489].) attorney analogous thereafter the former is not enter into a contingency consent, without the client’s knowledge employ permitted, the associate out of associate counsel and ultimately compensate Elizalde, v. 125 Cal. 206-207 client’s share of his (Porter [57 recovery. Assn., 322, 335 P. cf. I. M. T. Johnson 899]; Cal.App.2d California P. 360].) P.2d Cormac v. 1073]; Murphy, Cal.App. [208 10 uses this will Paragraph language, “[plaintiff] *5 the of the fees recovered.” The words “recovery” or “recovered” have the common the connotation of representing of a sum obtained and course of law includes entirety by process Reis, Holmes, 269, settlement 16 Cal. 279 P. Rowe v. 309]; (People [18 P.2d Cordes v. 27 45]; Cal.App.2d Harding, Cal.App. [146 479-480 P. were to the 650]); attorneys parties agreement Thus, who would of such a connotation. to think in terms expected that and in consideration of the fact that it was not then contemplated share in the case later would be referred to other counsel who too would we find the intended that it reasonable to assume that parties defendant would receive a of the entire fee one-sixth share resulting case; further, from of the Brower that had the disposition parties intended that defendant was to one-sixth of the sum be paid only was reason diminution plaintiff ultimately through paid by referral,6 would “earned or have used a clause similar to subsequent they are 5Plaintiffs for the of the The Plaintiffs were entirely genesis responsible dispute. KELTNER, aware AGREEMENTwith and it was their decision to refer the case to office, the HARNEY without KELTNERand their consulting reconsidering [new counsel] 14H.) with him in the context of the association.” proposed (Finding Below no either cited made to nor did it objection findings, any plaintiff propose and has raised no to either on counterfindings, objection appeal. unrealistic, if it had extension of 6By logical, although admittedly position, plaintiff’s received rather than to by relating partnership” Moreover, of fees. we note that reference to “recovery” complete defendant, “B,” Brower case on fee to Exhibit one-sixth providing is followed five other named to cases also be “Retained directly by by likewise identified with an “referral fee” amount of Partnership”—each defendant, to be received three for “1/6.” We this form by being regard when viewed listing, light provision binding to defendant “the fees recovered on pay ”‘B’ said cases as set forth in Exhibit (italics ours), clearly manifesting an intention the Brower to case was be treated by parties as would be the others listed—without intent that an precisely could be created as to the manner in exception unilaterally in the “one-sixth” Brower case was to be only computed. that even it it be conceded Appellant continuously urges defendant could be entitled to the full one-sixth under a “referral” the situation should be because a differently regarded dissolution” is involved here. The rationale “partnership behind this bare citation of is not argument authority) (unsupported by enunciated. We can assume that it means to that a clearly only suggest who is a dissolution of a can look to partner partnership only the actual assets in the amount of (here possession partnership received Were we it). circumstance of actually accept defendant’s withdrawal from the which thereafter continued existence, its as such a “dissolution” “B” which we cannot do [Exhibit recites, “Referral fee to it is hornbook law that Keltner”], desire; arms make at bargaining length may they any arrangement even in a true dissolution there is one prevent partner another a share of agreeing partnership disproportionate *6 assets. also that referral Brower case to the new its
Appellant urges firm was a one and a overall sensible legal produced greater probably However, fee than it earned otherwise. this is could have a to do with matter of which has clearly argument nothing speculative the merits of the cause.
The is affirmed. judgment
Wood, J.,P. concurred. fee, the new entire to firm the defendant would thereafter have been entitled agreed give “1 his /6” share. nothing by way
THOMPSON, J. I concurin the I which view as a majority opinion of the issues raised scholarly analysis clearly concisely disposing the combating lawyer-litigants.
I add to that view that contained in our opinion my personal should construed the referral fee opinion approving which rise to the funds in facts an indicate gave dispute. stipulated the us involved in the before arrangement by litigation referred the Brower action to a skilled personal injury-malpractice an an counsel retained arrangement by specialist referring interest of the eventual fee.1 The record is silent contingent referral, to which the client as to the extent was informed the client’s lawyers’ right compensate referring while on other than a basis contingent reducing referring lawyers fee what would otherwise referred lawyer’s contingent extent to which the have been the referral referring percentage, acted in their client’s interest and not their own making lawyers to whom the case was referred. lawyer of a his client In fiduciary duty lawyer requires my judgment, another, before a refer the client’s matter to he: inform (1) lawyer client intention to refer the matter and the reasons (2) of his why; client the inform the client of referral fee (3) arrangement; give value of reasonable attorney compensating referring option to the date of referral so that the services performed up fee will would otherwise be referral benefit go contingent client; if the inform the client of the conflict in interest (4) potential of a total client elects to a referral fee based permit proportion the fee with the fee so that the client himself may negotiate contingent the case is referred. to whom lawyer the client is so informed and then
Unless knowingly intelligently view that the in the referral fee is my referring acquiesces arrangement, trust for the client. From the holds his referral fee in constructive lawyer facts, in the case at well be the situation tenor of the such may stipulated bench.
I reach conclusion lawyer’s obligation my referring *7 of a of basic duty fiduciary. Arguments public policy principles In an era where in tort is founded dictate the same result. recovery fee and not as an association of 1The as a referral briefs discuss done. counsel a fee the basis of the value of work actually dividing upon loss occasioned socialization by injury person primarily Arsdale v. Cal.2d (Fun Cal.Rptr. Hollinger, property that loss must be 437 P.2d which bears 508]), protected society recovery reaching against arrangements prevent reduced fees other expenses by necessary legal injured, only with a one lawyer litigation. compensates pure more than of a fee for obtaining contingent doing nothing to whom while the of a client a retainer lawyer signature work, is far from is referred case necessary performs fee is the referral To extent that paid injured person’s recovery. Rather, has loss not socialized. obtaining purpose, who, motion, his his has conceded business own inability lawyer to handle it has been subsidized.