Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County No. 06CC12065, Daniel J. Didier, Judge.
Law Offices of Michael G. York and Michael G. York for Defendants and Appellants.
Strong Law Office and Kathleen Strong for Plaintiff and Respondent.
OPINION
SILLS, P. J.
Ali Beydoun and Edwin Craig Sheldon (the Defendants) appeal from the order denying their motion for attorney fees following judgment in their favor on the complaint against them for legal fees by Kathleen Strong. We find Strong’s action against the Defendants did not involve a contract containing an attorney fee provision and affirm the order.
FACTS
Kathleen Strong sued for the reasonable value of legal services she rendered for the Defendants under a fee-sharing agreement with their attorney, Bill Suojanen. The Defendants had entered into a contingency fee agreement with Suojanen, agreeing to pay him 33 1/3 percent of any recovery in their case. Allegedly, Suojanen promised to obtain the Defendants’ signatures approving the fee-sharing agreement with Strong, but, unknown to her, he failed to do so, and she continued to work on their case for one year. The Defendants were ultimately successful and recovered in excess of $600,000. Strong alleged causes of action for quantum meruit, unjust enrichment, and declaratory relief against the Defendants, claiming they knew she performed work on their case and that she expected payment.
The trial court sustained the Defendants’ demurrer to Strong’s second amended complaint without leave to amend, finding that rule 2-200 of the Rules of Professional Conduct of the State Bar (Rule 2-200) rendered the fee-sharing agreement unenforceable because the clients did not sign it and Strong was barred from recovering any form of compensation from them. Judgment was entered in Defendants’ favor. The Defendants then moved for attorney fees, claiming they were the prevailing parties under the contingent fee agreement they entered into with Suojanen, which contains an attorney fee clause.
The judgment was affirmed by this court in Strong v. Beydoun (2008) 166 Cal.App.4th 1398.
Strong opposed the motion on the grounds that her complaint against the Defendants was not grounded in their contingency fee agreement with Suojanen, to which she was not a party, but was based on unjust enrichment and quantum meruit, which are not contractual actions. She also contended that no attorney fees could be recovered under the fee-sharing agreement she made with Suojanen because it was found to be illegal and unenforceable.
The trial court denied the motion for attorney fees: “[Strong]’s causes of action for unjust enrichment and quasi-contract involved the Contingency Fee Agreement which was ruled unenforceable against [D]efendants because it violated public policy in violating R[ule] 2-200. Thus, neither party was entitled to recovery of attorneys’ fees under the provision of the Agreement that never matured due to the illegality of the contract.”
DISCUSSION
The Defendants loosely group the fee-shifting agreement and the contingency fee agreement and contend they are merely unenforceable, not illegal per se, and thus they should be able to recover attorney fees under a contractual theory. The Defendants also contend Strong’s complaint against them was an action on the contingency fee agreement and the attorney fee clause can be enforced against her notwithstanding she was not a signatory to that contract. We disagree.
The attorney fee clause in the contingency fee agreement provides: “In the event that litigation or other judicial process, including arbitration, or any other action is necessary to enforce the terms of this Contract, the prevailing party shall be entitled to Attorney’s fees and costs....” The Defendants claim Strong’s action against them was essentially an action to enforce the contingency fee agreement because she “sought compensation from [the Defendants] for services rendered by her in representing them in the very action that is the subject of the [contingency fee agreement], alleged the [contingency fee agreement] provided for a one-third (1/3rd) contingency fee, and incorporated the allegation into her other allegations against them.” But Strong’s action did not seek to enforce the Defendant’s obligation to pay Suojanen a contingency fee and was not based on that contract. It was based on what she alleged was the Defendants’ implied promise to pay her the reasonable value of her services. There is no basis for the Defendants to insert an attorney fee clause in that alleged implied agreement.
The trial court correctly denied the attorney fee motion, although its reasoning does not withstand scrutiny. Apparently, it confused the contingency fee agreement and the fee-sharing agreement. The contingency fee agreement, between the Defendants and Suojanen, contained an attorney fee clause; the fee-sharing agreement, between Suojanen and Strong, did not. The fee-sharing agreement was found to be unenforceable; the contingency fee agreement was not. Strong’s action against the Defendants was based on their unjust enrichment because they received the benefit of her legal services without paying her. Because the fee-sharing agreement did not follow the requirements of Rule 2-200, Strong could not recover compensation from the Defendants under any theory. Her only connection to the Defendants was through the unenforceable fee-sharing agreement, not through the contingency fee agreement.
The Defendants argue they are entitled to recover attorney fees against Strong because if she had prevailed in her unjust enrichment action against them, she would have been entitled to recover attorney fees from them. Their reasoning goes like this: Because Strong alleged that Suojanen entered into the fee-sharing agreement with her as the agent of the Defendants, she could enforce the fee-sharing agreement against the Defendants and thus recover attorney fees from them if she prevailed. But there is no attorney fee clause, implied or otherwise, in the fee-sharing agreement.
The cases cited by the Defendants do not advance their argument. In Cano v. Glover (2006) 143 Cal.App.4th 326, the court held that a defendant who was sued on a contract containing an attorney fee clause could recover attorney fees after he was dismissed from the action, notwithstanding the existence of the contract was questionable. In Dell Merk, Inc. v. Franzia (2005) 132 Cal.App.4th 443, the court held where a nonsignatory defendant is sued on a contract as if he were a party to it, and the contract contains an attorney fee clause, the prevailing defendant can recover attorney fees if the plaintiff would have been entitled to attorney fees had he prevailed. In Milman v. Shukhat (1994) 22 Cal.App.4th 538, the court held that if a plaintiff sues on a contract containing an attorney fee provision, and the defendant prevails by arguing the unenforceability or nonexistence of that contract, the defendant is entitled to attorney fees because the action “‘involves’ a contract.” (Id. at p. 545.) Finally, in Hastings v. Matlock (1985) 171 Cal.App.3d 826, the court held a plaintiff who sued to enforce the rescission of a contract containing an attorney fee provision was entitled to recover attorney fees when he prevailed.
The subject of each of the foregoing cases is a contract containing an attorney fee provision. Here, the subject of Strong’s action was the fee-sharing agreement, which did not contain an attorney fee provision. Had Strong prevailed against the Defendants in her action, she would not have been entitled to attorney fees, and neither are they.
DISPOSITION
The order denying the motion for attorney fees is affirmed. Strong is entitled to costs on appeal.
WE CONCUR: MOORE, J., IKOLA, J.