Case Number: BC654741 Hearing Date: March 23, 2018 Dept: 32

law offices of calvin j. park,

Plaintiff,

v.

vivian chang, et al.,

Defendants.

Case No.: BC654715

Hearing Date: March 23, 2018

[TENTATIVE] order RE:

defendant bu ok kim’s demurrer to first amended complaint

BACKGROUND

This action arises out of Plaintiff Law Offices of Calvin J. Park’s (“Plaintiff”) representation of Defendants Vivian Chang, Yong Chang, Bu Ok Kim, and Yu Kim (“Client Defendants”) in an action arising out of a motor-vehicle accident (“Underlying Action”). Plaintiff alleges that the operating retainer agreement provided that in the event Plaintiff was discharged prior to obtaining a judgment, Plaintiff would be entitled to a certain percentage of the recovery. The retainer agreement was signed on September 7, 2010, Plaintiff was discharged on April 20, 2012, and the Underlying Action was settled in October 2013. Plaintiff’s original Complaint filed March 20, 2017 alleged that Defendants Brian Toppila; Callahan Thompson Sherman & Caudill LLP; and Carl Warren & Company; agreed not to include Plaintiff’s name on the settlement check, and that all Defendants continue to refuse to pay the amounts owed to Plaintiff. Plaintiff asserts causes of action for (1) breach of contract; (2) legal malpractice; (3) fraud and deceit; (4) unjust enrichment; (5) conversion; (6) intentional interference with prospective economic advantage; and (7) conspiracy.

Plaintiff’s First Amended Complaint (“FAC”), filed December 12, 2017, alleges one cause of action for Breach of Contract against the Client Defendants and Does 1-50.

DISCUSSION

A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff’s ability to prove those allegations. (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.) The court must treat as true all of the complaint’s material factual allegations, but not contentions, deductions or conclusions of fact or law. (Id. at 732–33.) The complaint is to be construed liberally to determine whether a cause of action has been stated. (Id. at 733.) To sustain a demurrer based on a statute of limitations defense, it must appear clearly and affirmatively from the complaint that that the statute of limitations has run. It is not enough that the complaint might be barred. (Childs v. State of California (1983) 144 Cal. App. 3d 155, 161.) Judicial notice will not be taken of an opposing party’s declarations that contradict the complaint. (Big Valley Band of Pomo Indians v. Sup. Ct. (2005) 133 CA4th 1185, 1191.)

A. Parties to the Agreement

Client Defendants demur to the first cause of action for breach of contract on the grounds that Yong Chang and Yu Kim are not parties to the attorney-retainer agreement because they did not sign the contract. However, the facts set forth in the Complaint are accepted as true on demurrer. (Blank v. Kirwin (1985) 39 Cal.3d 311, 318.) Plaintiff sufficiently alleges that he entered into a written contingency fee agreement with Yong and Yu without the Court’s consideration of Plaintiff’s counsel’s declaration. (FAC ¶13.)

B. Statute of Limitations

Client Defendants demur to the first cause of action for breach of contract on the grounds that it is barred by the statute of limitations. As set forth in the FAC, the retainer agreement provides: “If, for any reason, Client should discharge Attorney, Attorney shall have a lien on any recovery obtained by judgment, compromise or settlement on Client’s behalf by any subsequent attorney for services render by Attorney prior to his discharge at the rate of $250.00. . . per hour. However, Attorney’s compensation shall never be less than 10%. . . if Attorney is discharged after three (3) months from the date this Agreement is executed. Also, once litigation is initiated by filing a complaint, Attorney’s compensation shall never be less than 20% (twenty percent) of the total recovery.” (FAC. ¶ 13.) Thus, the alleged retainer agreement is a “hybrid” agreement, containing both an hourly-fee and a contingency fee.

The requirements of contingency fee contracts as set forth in California Business & Professions (“CBP”) Code §1647 apply to hybrid agreements. (Arnall v. Superior Court (2010) 190 Cal.App.4th 360, 371.) Plaintiff’s Retainer agreement satisfies the requirements of §1647(a)(3) because the agreement specifically provides for “Service Not Covered.” (FAC Exh. A ¶6.) Client Defendants fail to provide any authority demonstrating that such language is not sufficient.

Where an attorney with a contingency fee agreement is discharged, the attorney’s recovery is limited to quantum meruit—the attorney is not entitled to recover the agreed upon contingent fee. (Fracasse v. Brent (1972) 6 Cal. 3d 784, 791.) The rationale behind this rule is that a client has the absolute right to discharge his or her attorney, and awarding the full contingent fee would not reflect the services provided and poses the risk in a double payment of fees. (See id.) Without this rule, “clients will often feel required to continue in their service attorneys in whose integrity, judgment or capacity they have lost confidence.” (Id. at 790.) As such, Plaintiff cannot recover the contingency fee.

Where an attorney with an hourly-fee agreement is discharged, the attorney “would be entitled to count upon his contract. . . [and] would be entitled to recover the full amount agreed upon by its terms.” (Countryman v. California Trona Co. (1917) 35 Cal. App. 728, 736.) As such, Plaintiff maintains a viable contract action that was filed within the four-year statute of limitations for actions based on written contract. (CCP § 337.)

C. California Code of Civil Procedure §1060

Client Defendants contend that Plaintiff failed to comply with the CCP §1060 requirement to file an independent declaratory action against his client in order to enforce a contractual attorney fees lien. (Mojtahedi v. Vargas (2014) 228 Cal.App.4th 974, 977.) However, Plaintiff’s FAC alleges breach of contract against Vivian, Yong, Bu and Yu, the type of action contemplated by §1060, and thus factually distinguishable from Mojtahedi.

D. Conclusion

For the foregoing reasons, the demurrer to the first cause of action is DENIED.