Case Name: The Law Firm of Kallis & Associates, P.C., et al. v. Joseph P. Padgett
Case No.: 16-CV-298149

Currently before the Court is motion by defendant and cross-complainant Joseph P. Padgett (“Defendant”) for summary judgment or, alternatively, summary adjudication.

Factual and Procedural Background

This action arises out of the alleged non-payment of legal fees and costs incurred in connection with the prosecution of a federal civil rights lawsuit.

In September 2008, Defendant and his wife, Darla Padgett, (collectively, “the Padgetts”) retained plaintiffs and cross-defendants The Law Firm of Kallis & Associates, P.C. (“K&A”) and Bustamante & Gagliasso, P.C. (“B&G”) (collectively, “Plaintiffs”) as their counsel in connection with a lawsuit filed against the City of Monte Sereno and members of the City Council, alleging violations of their civil rights. (First Amended Complaint (“FAC”), ¶¶ 22-23.) The Padgetts executed a written fee agreement (“Fee Agreement”) with Plaintiffs, stating that Plaintiffs would provide legal services in connection with the federal civil rights lawsuit in exchange for payment of attorney fees and costs. (Id., at ¶¶ 34-37, 39, 44, 48-49, 51, 53.) The Fee Agreement provided that the case would be handled as a modified contingency fee case. (Id., at ¶¶ 35, 37, 39, 48-49, 51, 53, 55.) If the case went to trial, Plaintiffs would get twenty percent of the award plus their hourly attorney fees. (Ibid.) If the case settled, Plaintiffs would receive the greater of a set percentage of the total settlement or their hourly fee. (Ibid.) Plaintiffs would be entitled to one-third of any punitive damages award. (Ibid.) If the Padgetts fired Plaintiffs, they would pay Plaintiffs’ hourly fees within ten business days of the date of termination and Plaintiffs would have a contractual lien for the reasonable value of their services. (Ibid.) The Fee Agreement also provided that the Padgetts would provide a retainer deposit in the amount of $144,000. (Ibid.) The Padgetts were also obligated to make timely payments for costs incurred by Plaintiffs in connection with the case. (Ibid.)

During the course of their representation of the Padgetts, Plaintiffs put on a three-week trial in federal district court. (FAC, ¶ 24.) At trial, Defendant prevailed on one cause of action; his wife did not prevail on any of her claims. (Ibid.) Subsequently, post-trial motions were filed and argued, and three appeals were filed. (Id., at ¶ 25.) Plaintiffs represented the Padgetts in the appeals. (Ibid.)

Following the appeals, the Ninth Circuit Court of Appeals remanded the case to the district court for recalculation of the attorney fee award. (FAC, ¶ 26.) Prior to the submission of renewed motions for fees, Defendant asked the district court to relieve Plaintiffs as his counsel of record. (Id., at ¶ 27.) The court subsequently relieved Plaintiffs as Defendant’s counsel on October 11, 2013. (Ibid.)

Shortly after Defendant requested that Plaintiffs be removed as his counsel of record, Plaintiffs issued a written demand to Defendant for payment of their contract fees. (FAC, ¶ 40.) The district court instructed Plaintiffs to file a motion for attorney fees for their work on the case and Defendant to file a motion for attorney fees for the work performed by his prior attorneys, McManus Faulkner. (Id., at ¶ 28.) Defendant did not file a motion as instructed by the district court. (Id., at ¶ 29.) The court ruled that “the reasonable lodestar amount of attorney fees and costs” for the worked performed on the case was $1,682,345.14 plus interest and the reasonable value of the services rendered was $1,682,345.14. (Id., at ¶¶ 30-31.) However, the district court “ultimately awarded fees and costs of $520,586.28 due to limited success.” (Id., at ¶ 32.) Defendant “appealed that ruling to the Ninth Circuit Court of Appeals, but did not appeal the fee amount.” (Id., at ¶ 33.)

Plaintiffs allege that Defendant breached the Fee Agreement by failing to make any payments towards the $101,028 in costs incurred in connection with the lawsuit; failing to pay their hourly fees within ten business days of the date of their termination; refusing to pay any fees; refusing “to allow … [them] to collect the respective attorneys’ fees set by the District Court”; refusing to recognize their lien; refusing “to pay … [them] the amount awarded by the Court or fees owed”; and failing to pay them one-third of the $10,000 punitive damages award. (FAC, ¶¶ 38, 40-42, 46, 48, 50, 52-55.)

Plaintiffs further allege, in the alternative, that if “there is no written contract” they should be awarded fees based on “the equitable principals [sic] of quantum meruit, unjust enrichment, and promissory estoppel.” (FAC, ¶ 1.)

Based on the foregoing allegations, on July 26, 2016, Plaintiffs filed a complaint against Defendant. Approximately two months later, Plaintiffs filed the operative FAC against Defendant, alleging causes of action for: (1) breach of contract; (2) restitution; (3) quantum meruit; (4) promissory estoppel; (5) account stated; and (6) declaratory relief.

Defendant subsequently demurred to the FAC. On January 18, 2017, the Court issued its order on Defendant’s demurrer, sustaining the demurrer without leave to amend as to the fourth cause of action for promissory estoppel and overruling the demurrer in all other respects.

A few weeks later, Defendant filed an amended answer to the FAC, generally denying the allegations of the FAC and alleging various affirmative defenses. As is relevant here, the amended answer alleges that the Fee Agreement is unenforceable and void and Plaintiffs’ second and third causes of action are time-barred by the statute of limitations.

Thereafter, on February 10, 2017, Defendant filed the operative first amended cross-complaint (“FAXC”) against Plaintiffs, alleging a single cause of action for declaratory relief. In the FAXC, Defendant alleges that there is an actual controversy relating to the legal rights and duties of the parties under the Fee Agreement. (FAXC, ¶¶ 4-5.) Defendant alleges that the Fee Agreement is unenforceable because: (1) it does not comply with Business and Professions Code section 6147, subdivision (a) and it has been voided; and (2) “an undisclosed conflict of interest pervaded the attorney-client relationship between” him and Plaintiffs. (Id. at ¶ 6.) Defendant further alleges that paragraph 9 of the Fee Agreement “is ineffective to create a lien” because Plaintiffs “did not comply with Rule of Professional Conduct 3-300[ ] and because it is part of a contract which itself is not enforceable.” (Id. at ¶¶ 7-8.) In light of the foregoing, Defendant seeks a declaration that the Fee Agreement is void and no lien was created by the Fee Agreement. (Id. at Prayer for Relief, ¶ 1.)

In November 2017, Defendant filed the instant motion for summary judgment or, alternatively, summary adjudication. The motion was originally set for hearing on February 8, 2018, but later continued to June 5, 2018.

On February 26, 2018, K&A filed a request for dismissal, without prejudice, of “[a]ll causes of action other than Quantium [sic] Meruit and injunctive relief” from the complaint. On the same day, the court clerk entered the dismissal as requested.

Subsequently, on May 16, 2018, B&G filed a request for dismissal, without prejudice, of “Counts 1; 4; 5; and 6 of the Complaint only.” On the same day, the court clerk entered the dismissal as requested.

A few days later, on May 22, 2018, Plaintiffs filed papers in opposition to the pending motion for summary judgment or, alternatively, summary adjudication.

Discussion

Pursuant to Code of Civil Procedure section 437c, Defendant moves for summary judgment of the FAC and the FAXC. In the alternative, Defendant moves for summary adjudication of the first, second, third, fifth, and sixth causes of action of the FAC.

I. Effect of Dismissals

As a preliminary matter, the Court considers the effect of Plaintiffs’ dismissals on the instant motion. As indicated above, after the filing of the instant motion, Plaintiffs dismissed various claims from the FAC. Specifically, on February 26, 2018, K&A filed a request for dismissal, without prejudice, of “[a]ll causes of action other than Quantium [sic] Meruit and injunctive relief” from the complaint. On the same day, the court clerk entered the dismissal as requested. Thereafter, on May 16, 2018, B&G filed a request for dismissal, without prejudice, of “Counts 1; 4; 5; and 6 of the Complaint only.” On the same day, the court clerk entered the dismissal as requested.
In their opposition papers, Plaintiffs acknowledge the filing of the dismissals and assert that, as a result of the filings, they dismissed all causes of action other than their claims for quantum meruit and declaratory relief. (Opp’n., p. 9:12-15.)

Plaintiffs are mistaken. First, in the February 26, 2018 dismissal, K&A dismissed “[a]ll causes of action other than Quantium [sic] Meruit and injunctive relief” from the FAC. Notably, the FAC does not allege a claim for injunctive relief. Thus, K&A dismissed all of its claims against Defendant except its third cause of action for quantum meruit. Second, in the May 16, 2018 dismissal, B&G dismissed “Counts 1; 4; 5; and 6” of the FAC. Thus, B&G dismissed all of its claims against Defendant except its second cause of action for restitution and third cause of action for quantum meruit.

In light of the foregoing, the Court finds that the motion for summary adjudication of the first, second, fifth, and sixth causes of action as alleged by K&A is MOOT. Additionally, the Court finds that the motion for summary adjudication of the first, fifth, and sixth causes of action as alleged by B&G is MOOT.

II. Requests for Judicial Notice

A. Defendant’s Request

Defendant asks the Court to take judicial notice of: the original complaint; the FAC; the amended answer to the FAC; and the FAXC.

These documents are generally proper subjects of judicial notice as they are court records relevant to issues raised by the pending motion. (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 (Lockyer) [“There is … a precondition to the taking of judicial notice in either its mandatory or permissive form—any matter to be judicially noticed must be relevant to a material issue.”]; People v. Woodell (1998) 17 Cal.4th 969B, 455 (Woodell) [“Evidence Code sections 452 and 453 permit the trial court to ‘take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached-in the documents such as orders, statements of decision, and judgments-but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.’”].)

Accordingly, Defendant’s request for judicial notice is GRANTED as to the existence of the subject court records.

B. Plaintiffs’ Request

Plaintiffs ask the Court to take judicial notice of: the docket in the underlying federal civil rights action; orders and judgments entered in the underlying federal civil rights action; Business and Professions Code section 6147, subdivision (b); Code of Civil Procedure section 339; and “[a]ll documents Defendant requested judicial [n]otice of.” (Opp’n. RJN, p. 2:1-6.)

As an initial matter, the court docket in the underlying federal civil rights case is a proper subject of judicial notice under Evidence Code section 452, subdivision (d). (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; see also First American Title Co. v. Mirzaian (2003) 108 Cal.App.4th 956, 960 [taking judicial notice of superior court docket].)

Next, the documents filed in the underlying federal civil rights case are generally proper subjects of judicial notice as they are court records relevant to issues raised by the pending motion. (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; see also Lockyer, supra, 24 Cal.4th at p. 422, fn. 2 [“There is … a precondition to the taking of judicial notice in either its mandatory or permissive form—any matter to be judicially noticed must be relevant to a material issue.”]; Woodell, supra, 17 Cal.4th at p. 455 [“Evidence Code sections 452 and 453 permit the trial court to ‘take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached-in the documents such as orders, statements of decision, and judgments-but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.’”].)

Business and Professions Code section 6147, subdivision (b) and Code of Civil Procedure section 339 are also proper subjects of judicial notice under Evidence Code sections 451, subdivision (a) and 452, subdivision (a). (See Evid. Code, §§ 451, subd. (a) [courts must take judicial notice of the decisional, constitutional, and public statutory law of California and the United States] and 452, subd. (a) [courts may take judicial notice of the decisional, constitutional, and statutory law of any state of the United States and the resolutions and private acts of the Congress of the United States and of the Legislature of this state].)

Finally, as previously articulated, the pleadings filed in this action are generally proper subjects of judicial notice. (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; see also Lockyer, supra, 24 Cal.4th at p. 422, fn. 2 [“There is … a precondition to the taking of judicial notice in either its mandatory or permissive form—any matter to be judicially noticed must be relevant to a material issue.”]; Woodell, supra, 17 Cal.4th at p. 455 [“Evidence Code sections 452 and 453 permit the trial court to ‘take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached-in the documents such as orders, statements of decision, and judgments-but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.’”].)

Accordingly, Plaintiffs’ request for judicial notice is GRANTED as to the court docket in the underlying federal civil rights case, the existence of the documents filed in the underlying federal civil rights case (and the truth of the results reached in orders and judgments), Business and Professions Code section 6147, subdivision (b) and Code of Civil Procedure section 339, and the existence of the court records filed in this action.

III. Legal Standard on Motions for Summary Judgment or Adjudication

The pleadings limit the issues presented for summary judgment or adjudication and such a motion may not be granted or denied based on issues not raised by the pleadings. (See Government Employees Ins. Co. v. Super. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion”].)

A motion for summary judgment must dispose of the entire action. (Code Civ. Proc., § 437c, subd. (a).) “Summary judgment is properly granted when no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. A defendant moving for summary judgment bears the initial burden of showing that a cause of action has no merit by showing that one or more of its elements cannot be established or that there is a complete defense. Once the defendant has met that burden, the burden shifts to the plaintiff ‘to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.’ ‘There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.’ ” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272, internal citations omitted.)

Where a plaintiff moves for summary judgment, the plaintiff bears the initial burden of showing that there is no defense to a cause of action by proving each element of the cause of action entitling the plaintiff to judgment. (Code Civ. Proc., § 437, subd. (p)(1); Paramount Petroleum Corporation v. Super. Ct. (2014) 227 Cal.App.4th 226, 241.) If the plaintiff makes such a showing, the burden then shifts to the defendant to show that a triable issue of one or more material facts exists as to a cause of action or a defense thereto. (Ibid.)

“Summary adjudication works the same way, except it acts on specific causes of
action or affirmative defenses, rather than on the entire complaint. ([Code Civ. Proc.,] §
437c, subd. (f).) … Motions for summary adjudication proceed in all procedural respects
as a motion for summary judgment.’ ” (Hartline v. Kaiser Foundation Hospitals (2005)
132 Cal.App.4th 458, 464 (Hartline).)

For purposes of establishing their respective burdens, the parties involved in a motion for summary judgment must present admissible evidence. (Saporta v. Barbagelata (1963) 220 Cal.App.2d 463, 468.) Additionally, in ruling on the motion, a court cannot weigh said evidence or deny summary judgment on the ground that any particular evidence lacks credibility. (See Melorich Builders v. Super. Ct. (1984) 160 Cal.App.3d 931, 935; see also Lerner v. Super. Ct. (1977) 70 Cal.App.3d 656, 660.) As summary judgment “is a drastic remedy eliminating trial,” the court must liberally construe evidence in support of the party opposing summary judgment and resolve all doubts concerning the evidence in favor of that party. (See Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 717-18.)

IV. Substantive Merits of the Motion

Following Plaintiffs’ dismissals, the matters that remain before the Court are: Defendant’s the motion for summary judgment of the FAXC; Defendant’s motion for summary judgment of the FAC, which now consists of the second cause of action, only as alleged by B&G, and the third cause of action; and Defendant’s alternative motion for summary adjudication of the second cause of action, only as alleged by B&G, and the third cause of action.

A. Motion as to the FAXC

Defendant argues that he is entitled to summary judgment of the FAXC because there is no defense to his cause of action for declaratory relief, which seeks a declaration that the Fee Agreement is void and no lien was created by the Fee Agreement. (FAXC, Prayer for Relief, ¶ 1.) Defendant contends that the Fee Agreement is void and unenforceable because it does not comply with Business and Professions Code section 6147, subdivision (a) and he elected to void the Fee Agreement on January 24, 2017. Defendant further asserts that no lien was created by the Fee Agreement because the Fee Agreement—the only basis for the lien—is void.

In support of his arguments, Defendant proffers a copy of the Fee Agreement, a January 24, 2017 letter voiding the Fee Agreement, and Plaintiffs’ responses to requests for admission.

Defendant’s arguments are well-taken. Business and Professions Code section 6147 states, in relevant part:

(a) An attorney who contracts to represent a client on a contingency fee basis shall, at the time the contract is entered into, provide a duplicate copy of the contract, signed by both the attorney and the client, or the client’s guardian or representative, to the plaintiff, or to the client’s guardian or representative. The contract shall be in writing and shall include, but is not limited to, all of the following:
…

(4) Unless the claim is subject to the provisions of Section 6146, a statement that the fee is not set by law but is negotiable between attorney and client.
…

(b) Failure to comply with any provision of this section renders the agreement voidable at the option of the plaintiff, and the attorney shall thereupon be entitled to collect a reasonable fee.

(Bus. & Prof. Code, § 6147.)

“Where … a client exercises his right to void a contingency fee agreement, section 6147 does not permit the trier of fact to consider the contingent nature of the fee arrangement in determining a reasonable fee. If the contingency fee agreement is void, there is no contingency fee arrangement. ‘A void contract is no contract at all; it binds no one and is a mere nullity. [Citation.] Consequently, such a contract cannot be enforced. [Citation.]’ [Citation.]” (Fergus v. Songer (2007) 150 Cal.App.4th 552, 573.) It therefore follows that if a client decides to void a contingency fee agreement, then the lien within that agreement would be voided with it. (See Hartford Life & Acc. Ins. Co. v. White (N.D. Cal., June 25, 2010, No. C09-05668) 2010 WL 2573926, at *4.)

Here, it is undisputed that the Fee Agreement was handled as a modified contingency fee case. (FAC, ¶¶ 35-36; D’s Undisputed Material Fact (“UMF”), Issue 1, Nos. 1-2 and Issue 2, No. 2.) In other words, the Fee Agreement was a hybrid agreement whereby Defendant was charged both contingent and hourly fees. (FAC, ¶¶ 35-36, 39.) The requirements of Business and Professions Code section 6147 apply to hybrid agreements. (Arnall v. Super. Ct. (2010) 190 Cal.App.4th 360, 371.) Thus, that statute applies to the parties’ Fee Agreement. Furthermore, as Defendant persuasively argues, Plaintiffs did not comply with Business & Professions Code section 6147 because the Fee Agreement does not include the requisite language that “the fee is not set by law but is negotiable between attorney and client.” (Padgett Dec., Ex. A; D’s UMF, Issue 1, No. 3 and Issue 2, No. 3.) The undisputed evidence further demonstrates that Defendant elected to void the Fee Agreement on January 24, 2017, and Plaintiffs admitted that the Fee Agreement is void and unenforceable. (Padgett Dec., Ex. B; Torbet Dec., Exs. L-s and M-2; D’s UMF, Issue 1, Nos. 4-5 and Issue 2, Nos. 4-5.)

This evidence sufficiently establishes that the Fee Agreement is now void as well as any lien that the Fee Agreement purported to create.

In opposition, Plaintiffs explicitly concede that the Fee Agreement is void as of January 24, 2017 (Opp’n., p. 5:21-23), and they do not oppose the motion to the extent it seeks summary judgment of the FAXC. Therefore, Plaintiffs do not raise a triable issue of material fact as to the FAXC.

Accordingly, Defendant’s motion for summary judgment of the FAXC is GRANTED.

B. Motion as to the FAC

Following Plaintiffs’ dismissals, the FAC as alleged by K&A consists only of the third cause of action for quantum meruit, and the FAC as alleged by B&G consists only of the second and third causes of action for restitution and quantum meruit, respectively.

In the second cause of action for restitution, B&G alleges that the court in the underlying federal civil rights action awarded Defendant a judgment for attorney fees that was intended for its benefit and “was for the provision of [its] legal services to [Defendant].” (FAC, ¶¶ 61-62.) Defendant allegedly sought court approval that the fees were his property, not B&G’s property “despite the agreement to the contrary.” (Id. at ¶¶ 63 and 65.) B&G further alleges by keeping the judgment, Defendant denied it the benefit of the money. (Id. at ¶ 64.)

In the third cause of action for quantum meruit, Plaintiffs allege that they performed legal services for Defendant, at his request, in the underlying federal civil rights case from September 9, 2008 and October 11, 2013. (FAC, ¶¶ 66-69.) The reasonable value of the legal services provided by Plaintiffs “was determined by the District Court to be $1,682,345.14.” (Id. at ¶ 70.) In addition, Plaintiffs “expended $101,028 in expenses that [Defendant] is responsible for and has not paid for these costs.” (Id. at ¶ 71.) The court in the underlying federal civil rights case allegedly “awarded $100,000 in costs that [Defendant] owes to Plaintiffs.” (Ibid.) Lastly, Plaintiffs allege that Defendant has not paid for any of the services rendered to him. (Id. at ¶ 72.)

As an initial matter, Defendant contends the second cause of action for “restitution by unjust enrichment” is not legally cognizable because unjust enrichment is not a cause of action; unjust enrichment is a general principle synonymous with restitution; the right to restitution is quasi-contractual and may be brought as an action for the reasonable value of services, i.e., a claim for quantum meruit; Plaintiffs are suing for the reasonable value of their services; and a claim for restitution cannot be stated when a separate claim for quantum meruit is also alleged.

Defendant’s argument is not well-taken. Although there “is no cause of action in California for unjust enrichment” (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793), unjust enrichment is synonymous with restitution (Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1314) and courts will overlook the label of a cause of action to determine whether a claim warranting restitution has been stated (McBride v. Houghton (2004) 123 Cal.App.4th 379, 387-88). Moreover, Defendant concedes that the second cause of action states a claim for restitution of the reasonable value of Plaintiffs’ services. Finally, Defendant is not entitled to summary adjudication of the claim simply because it may be duplicative of the third cause of action for quantum meruit. A defendant is only entitled to summary adjudication of a claim if the defendant shows that one or more of its elements cannot be established or that there is a complete defense. (See Code Civ. Proc., § 437c, subd. (f); Hartline, supra, 132 Cal.App.4th at p. 464 [“Motions for summary adjudication proceed in all procedural respects as a motion for summary judgment.’ ”].) The fact that the second cause of action may be duplicative of the third cause of action does not show that one or more of its elements cannot be established or that there is a complete defense to the claim.

Next, Defendant argues that the second and third causes of action are time-barred by the applicable statute of limitations. Defendant contends that the two-year statute of limitations provided by Code of Civil Procedure section 339 governs both claims. He asserts that the statute of limitations accrued on October 11, 2013, when the federal court in the underlying civil rights action formally relieved Plaintiffs of their representation of him. Defendant cites Cullinan v. McColgan (1927) 87 Cal.App. 684 and E.O.C. Ord, Inc. v. Kovakovich (1988) 200 Cal.App.3d 1194 to support his contention that a cause of action for quantum meruit accrues on the date the lawyer’s services are terminated or the date on which the lawyer’s services are completed, if later than the date of termination. Defendant also states that he terminated Plaintiffs on July 28, 2013, and Plaintiffs did not perform any work on his behalf after they were terminated. Defendant concludes that this action is time-barred because this lawsuit was filed on July 26, 2016, more than two years after October 11, 2013.

In opposition, Plaintiffs agree that the facts before the Court are undisputed and the two-year statute of limitations provided by Code of Civil Procedure section 339 applies. However, they contend that the statute of limitations accrued either on January 24, 2017, when the Fee Agreement was voided by Defendant, or it has yet to accrue because the contingency—Defendant’s receipt of recovery from the underlying judgment—has not occurred. Plaintiffs assert that their claim for quantum meruit was not ripe until Defendant voided the Fee Agreement. They point out that a claim for quantum meruit cannot be brought while the parties have an actual contract covering compensation and Business and Professions Code section 6147, subdivision (b) states that “[f]ailure to comply with any provision of this section renders the agreement voidable at the option of the plaintiff, and the attorney shall thereupon be entitled to collect a reasonable fee.” (Bus. & Prof. Code, § 6147, subd. (b), italics added.) Plaintiffs also assert that Chambers v. Kay (2002) 29 Cal.4th 142 (Chambers) and Huskinson & Brown, LLP v. Wolf (2004) 32 Cal.4th 453 (Huskinson) “state that the statute of limitations on a quantum meruit claim for attorneys’ fees arising from an unenforceable fee agreement accrues when the client receives recovery from the underlying judgment.” (Opp’n., p. 16:4-8.)

On the issue of accrual of the statute of limitations, the recent case of Leighton v. Forster (2017) 8 Cal.App.5th 467 (Leighton) is instructive. In Leighton, the Court of Appeal held that an attorney fee contract violated Business and Professions Code section 6148, subdivision (a) because there was no written fee contract. (Leighton, supra, 8 Cal.App.5th at p. 486.) The court further held that the contract was void because the client exercised her option to void an attorney fee agreement under section Business and Professions Code 6148, subdivision (c). (Id. at p. 487.) That subdivision states that “[f]ailure to comply with any provision of this section renders the agreement voidable at the option of the client, and the attorney shall, upon the agreement being voided, be entitled to collect a reasonable fee.” (Bus. & Prof. Code, § 6148, subd. (c), italics added.)

The Court of Appeal also held that the attorney’s quantum meruit claim was time-barred by the two-year statute of limitations set forth in Code of Civil Procedure section 339. (Leighton, supra, 8 Cal.App.5th at p. 490.) Explaining its holding, the court opined, “[w]here the claim of quantum meruit is based upon services performed under a contract that was void or voidable, the limitations period commences to run on either the date the last payment was made toward the attorney fees, or the last date that the attorney performed services in the case. [Citation.]” (Ibid.) The Court of Appeal further explained:

In the present case, appellant filed her complaint against Rochelle in June 2012, three years 10 months after she formally terminated her limited scope representation of the Forsters. By that time, a cause of action to recover the reasonable value of appellant’s services from Rochelle pursuant to a common count for quantum meruit or by virtue of any other obligation not founded in a writing was barred by the two-year statute of limitations governing such claims. [Citation.]

(Ibid.)

The statute at issue here, Business and Professions Code section 6147, subdivision (b), is virtually identical to the statute at issue in Leighton, Business and Professions Code section 6148, subdivision (c). Both statutes provide that a failure to comply with any provision of the respective sections renders the agreement voidable at the option of the plaintiff and, upon the agreement being voided, the attorney is entitled to collect a reasonable fee. (Bus. & Prof. Code, §§ 6147, subd. (b) [“Failure to comply with any provision of this section renders the agreement voidable at the option of the plaintiff, and the attorney shall thereupon be entitled to collect a reasonable fee.”] and 6148, subd. (c) [“Failure to comply with any provision of this section renders the agreement voidable at the option of the client, and the attorney shall, upon the agreement being voided, be entitled to collect a reasonable fee.”], italics added.) It follows that the Court of Appeal’s holding in Leighton—that where a claim to recover the reasonable value of services is based upon services performed under a contract that was void or voidable, the limitations period commences to run on either the date the last payment was made toward the attorney fees or the last date that the attorney performed services in the case—applies in this case as well.

The cases cited by Plaintiffs do not compel a different conclusion. Chambers and Huskinson in no way stand for the proposition “that the statute of limitations on a quantum meruit claim for attorneys’ fees arising from an unenforceable fee agreement accrues when the client receives recovery from the underlying judgment.” (Opp’n., p. 16:4-8.) In fact, the issue of accrual of the statute of limitations was not an issue before the California Supreme Court in either case. In Chambers, the court expressly states,

The Court of Appeal also reversed the trial court’s ruling that the two-year statute of limitations (Code Civ. Proc., § 339) bars the quantum meruit claim. To the extent Kay argues in his brief that the Court of Appeal decided that issue incorrectly, or contends that Chambers has no right to recover the reasonable costs of services rendered, even under a quantum meruit theory, because of the absence of written client consent to the agreed fee division, he has forfeited the issues by failing to petition for their review.

(Chambers, supra, 29 Cal.4th at p. 162.) Thus, the court had no occasion to address the accrual of the statute of limitations. In Huskinson, the court simply makes no reference whatsoever to the statute of limitations. Consequently, these cases do not undermine Leighton.

When the accrual rule set forth in Leighton is applied to the facts of this case, it is readily apparent that Plaintiffs’ remaining claims are time-barred by the applicable statute of limitations. The undisputed facts establish that Plaintiffs were formally terminated and did not perform any services for Defendant after October 11, 2013. (D’s UMF, Issue 3, Nos. 1-5.) Additionally, this lawsuit was filed on July 26, 2016, more than two years after the last date that Plaintiffs performed services for Defendant. (D’s UMF, Issue 3, Nos. 6-7.) Consequently, Defendant meets his initial burden to demonstrate that the second and third causes of action are time-barred by the statute of limitations.

As Plaintiffs concede that the material facts relevant to this issue are undisputed, they fail to raise a triable issue of material fact.

Accordingly, Defendant’s motion for summary judgment of the FAC is GRANTED.