Opinion
This is an appeal from a judgment of dismissal after the trial court sustained a demurrer to the first amended complaint without leave to amend in an action by an attorney against a former client and his wife for fraud and intentional interferеnce with prospective advantage. The gist of the action is that the attorney agreed to change the terms of his compensation from the payment of an hourly fee to a contingency fee in reliance on his client’s fraudulent promise to take the case to trial or settlement, the wife conspired to defraud the attorney, and she also interfered with the attorney’s prospective economic advantage by supporting her husband’s decision to abandon his lawsuit. Finding public policy articulated in well-established California Supreme Court authority bars this action, we affirm the judgment.
BACKGROUND
Plaintiff Don S. Lemmer, doing business as the Lemmer Law Firm, represented Jeffrey Charney (defendant) in a lawsuit against defendant’s
However, defendant did not intend to take the case to trial if a settlement could not be reached, because he knew Teleflоra’s owner was extremely litigious and vindictive and would appeal any judgment in favor of defendant to drag out the litigation and exhaust defendant’s resources. Defendant did not disclose his true intent to plaintiff, who relied on defendant’s promise to proceed with the case to either settlement or trial. Plaintiff believed defendant had a strong likelihood of prevailing on his claims, for which plaintiff expected to recover contractual and statutory attоrney fees and an additional contingency fee. If plaintiff had known defendant would not go to trial against Teleflora and its owners, plaintiff would not have agreed to the contingency fee arrangement.
Less than a month before trial, defendant and his wife called plaintiff. Defendant told plaintiff he was afraid to go to trial and instructed plaintiff to settle the case as soon as possible. Plaintiff objected and reminded defendant he had a strong case that should result in a judgment of several hundred thousand dollars for defendant, as well as attorney fees for plaintiff. Defendant’s wife responded, “You are our attorney, and you will do what we tell you to do.” Consequently, plaintiff initiated settlement disсussions with counsel for Teleflora, who offered only a “walk away” settlement with each side receiving nothing and bearing their own fees and costs. Plaintiff conveyed this offer to defendant and his wife, who directed plaintiff to accеpt- it. Plaintiff reminded defendant of his promise to ensure plaintiff was paid for his legal services. Defendant responded that he was “sorry about the financial hardship this is causing you and your family, but there is nothing I can do.” Plaintiff settled the Teleflora lawsuit for a “walk away” agreement and dismissed the case. Defendant never paid plaintiff a reasonable attorney fee for services rendered in the Teleflora lawsuit.
DISCUSSION
1. Standard of Review
“Because this case comes to us on a dеmurrer for failure to state a cause of action, we accept as true the well-pleaded allegations in plaintiffs’ first amended complaint. ‘ “We treat the demurrer as admitting all material facts properly pleаded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.” [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whоle and its parts in their context. [Citation.]’ ” (Evans v. City of Berkeley (2006)
“ ‘ “On appeal from a dismissal after an order sustaining a demurrer, we review the order de novo, exercising our independent judgment about whether the complaint states a cause of action as a matter of law. [Citations.] When the trial court sustains a demurrer without leave to amend, wе must also consider whether the complaint might state a cause of action if a defect could reasonably be cured by amendment. If the defect can be cured, then the judgment of dismissal must be reversed to allow the plaintiff аn opportunity to do so. The plaintiff bears the burden of demonstrating a reasonable possibility to cure any defect by amendment. [Citations.]” ’ ” (Batt v. City and County of San Francisco (2007)
2. First Cause of Action for Conspiracy to Commit Fraud
Plaintiff acknowledges that a clause in a retainer agreement between an attоrney and his client prohibiting the client from settling his lawsuit without
However, there is no real difference between a promise not to settle without the attorney’s consent and a promise, as alleged here, “to proceеd with the case to either settlement or trial.” Indeed, the former is the same as the latter, except the former is stated in the negative, and the latter in the affirmative. The practical effect of permitting plaintiff to sue his client for fraudulently inducing plaintiff to enter a contingency fee agreement with a false promise to take the case to trial or settlement is no different than permitting plaintiff to enforce an agreement not to abandon the lawsuit without the lawyer’s consent. It makes no difference whether or not plaintiff threatened to sue defendant for fraud at any time before or after plaintiff negotiated the walk away settlement. If, after carrying out the client’s instruсtions to abandon the case, a lawyer may sue the client for fraudulently inducing the contingency fee agreement, the client will be constrained to pursue a lawsuit he wants to abandon just as if the client had agreed at the outsеt not to settle without the attorney’s consent.
In Hall v. Orloff, supra,
Here, just as the law will not enforce an agreement between the parties constraining a client to pursue an unwanted lawsuit, the law does not recognize a tort cause of action for damаges for the client’s decision to abandon it, because that would equally constrain defendant to keep his lawsuit alive just for his attorney’s profit, despite his own fears and desire to abandon the case.
Plaintiff also may not sue his сlient’s wife for her alleged conspiracy to defraud plaintiff. All those who conspire to commit a wrongful act are liable for the resulting damage, including those who agree to the plan and those who carry it out. (Wyatt v. Union Mortgage Co. (1979)
3. Second Cause of Action for Intentiоnal Interference with Prospective Economic Advantage
In Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995)
The judgment is affirmed. Respondents are to recover their costs on appeal.
Bigelow, R J., and Flier, J., concurred.