Opinion
G052881
10-31-2017
THOMAS E. BECK, Plaintiff, Cross-defendant and Appellant, v. KATHERINE MEISLIN, Defendant, Cross-complainant and Appellant.
Thomas E. Beck, in pro. per., and for Plaintiff, Cross-defendant and Appellant. Bruce Adelstein, for Defendant, Cross-complainant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00724803) OPINION Appeal from a judgment of the Superior Court of Orange County, David E. McEachen, Judge. Affirmed as modified and remanded with instructions. Thomas E. Beck, in pro. per., and for Plaintiff, Cross-defendant and Appellant. Bruce Adelstein, for Defendant, Cross-complainant and Appellant.
In this attorney fee dispute, plaintiff Thomas E. Beck, an attorney, appeals from a judgment in favor of his former client, defendant Katherine Meislin. Beck seems to have lost sight of the foremost principle guiding the attorney-client relationship, that "an attorney has a '"duty to protect his client in every possible way, and it is a violation of that duty for him to assume a position adverse or antagonistic to his client . . . ."'" (Havasu Lakeshore Investments, LLC v. Fleming (2013) 217 Cal.App.4th 770, 777-778.)
After agreeing to represent Meislin in the underlying civil rights lawsuit on a contingent fee basis, Beck viewed himself as a co-owner of any settlement offer made to her, and he believed she had a duty to safeguard his financial interest in the case. Beck went so far as to inform Meislin that if she refused a proposed settlement he favored, he would "require" her to pay him his share of the amount offered before he would represent her at trial. Specifically, Beck told Meislin "you can feel free to roll the dice with your half, but not mine." (Italics added.) That was the antithesis of protecting Meislin's interests.
The underlying case ultimately settled, after Meislin informed Beck she would accept the proposed settlement only on the condition she receive a net payment of $150,000 from the settlement proceeds. In doing so, Meislin was effectively telling Beck he would have to accept a reduced percentage of the proposed settlement as his fee, if he wanted her to agree to it. Beck conveyed Meislin's acceptance of the settlement offer to the opposing side, but then ignored her condition. This litigation arose after Beck refused to pay Meislin the $150,000 net proceeds she specified as a condition of the settlement.
Although two different tribunals have already concluded Meislin had the right to condition her acceptance of the settlement offer and that by conveying her acceptance to the opposing side with knowledge of the condition, Beck agreed to it—he has consistently claimed she had no such right. Instead, he argues she wrongfully repudiated her contractual obligations to him by conditioning her agreement to settle on a reduction in his fee. We will be the third tribunal to reject his argument.
We will also reject Beck's contention the trial court erred by failing to award him compensation, on a quantum meruit basis, for appellate work he did in the underlying case. There are several problems with this claim, but the most notable is Beck acknowledges it was his decision to pursue the appeal, and that he and Meislin never agreed he would be compensated separately for doing so. It was not until after Meislin rejected his initial division of the settlement proceeds—which he characterized as a "final accounting" of his fees and costs and this litigation ensued, that Beck belatedly claimed an entitlement to additional compensation for his work on the appeal. We consequently find no error in the trial court's denial of Beck's quantum meruit claim.
Beck also contends the trial court erred by ruling that the provision in his retainer agreement which purportedly bumped his contingent share of any recovery to 50 percent was unconscionable. We need not reach that issue, however, in light of our conclusion that his acceptance of the condition Meislin placed on settlement operated as a modification of the retainer agreement.
Meislin has cross-appealed, seeking (1) a correction of the judgment to reflect Beck is obligated to pay her the entire $150,000 she was entitled to receive from the underlying settlement, rather than merely the amount in excess of the check for a lesser amount which he initially proffered to her, and (2) an award of prejudgment interest. We agree the judgment must be corrected. The trial court's clear intent was to award Meislin the full $150,000, and its statement of decision acknowledges she had returned Beck's initial check for a lesser amount uncashed.
And we simply disagree with Meislin's interpretation of the judgment on the issue of prejudgment interest. In our view, the court actually did award it to her. The judgment specifies she is entitled to an award of damages "plus interest, at the legal rate." (Italics added.) Because the right to postjudgment interest attaches to all judgments by statute, there is no reason for the court to award postjudgment interest as part of the judgment. We consequently conclude the court's award of "interest" refers to prejudgment interest.
FACTS
The underlying case arose out of an incident in which Meislin was arrested by police officers in the City of Hawthorne (Hawthorne), at the direction of Kumari Gossai (Gossai), a social worker employed by the County of Los Angeles (the County). Meislin's husband was also arrested. Meisslin was held in police custody for several hours, before finally being released at midnight.
Meislin thereafter retained Beck to represent her and her husband in a lawsuit against Hawthorne, several Hawthorne police officers, the County, and Gossai (collectively defendants). Paragraph 6 of Beck's written retainer agreement, under the heading "CONTINGENCY FEES," specified that his fee would be 33 percent of the gross recovery if the case settled before a certain point, and 40 percent if the case resolved after that point.
But paragraph 3 of the retainer agreement, under the heading "LEGAL SERVICES SPECIFICALLY EXCLUDED," included additional language referencing the amount of the contingent fee. That paragraph stated "[t]he legal services that are not to be provided by Attorney under this agreement specifically include, but are not limited to, the following: Representation with respect to (a) any claim for damages against Client arising out of the incident, (b) any appeal in which Client is an appellant from a court judgment on Client's personal injury claim (i.e. Attorney's obligation to represent Client under this agreement extends to an appeal only if Client is a respondent and subject to the greater of a 50% attorney fee or court awarded fees as provided in Paragraph 6)." (Italics added.)
However, at two other points in the agreement, Meislin interlineated the phrase "[i]n no event shall Attorney receive an amount greater than 40% of final judgment in this matter." And significantly, paragraph 10 of the agreement, under the heading "SETTLEMENT," stated "Attorney will not settle Client's case without the approval of Client, who will have the absolute right to accept or reject any settlement. Attorney will notify Client promptly of the terms of any settlement offer received by Attorney." (Italics added.)
Beck filed the underlying case in the United States District Court. The Hawthorne defendants moved for summary judgment, and when that motion was denied by the district court, they pursued an interlocutory appeal to the Ninth Circuit Court of Appeals. While the appeal was pending, the parties participated in a mediation program offered by the court for "all newly-filed cases." That mediation resulted in a successful settlement with the Hawthorne defendants.
Defendant Gossai also moved for summary judgment in the district court, and her motion was granted. Beck elected to file an appeal from that summary judgment, "to preserve" the claim. While that appeal was pending, the parties again participated in the court's mediation program.
In connection with a mediation in June, 2012 the County offered to settle Meislin's claims against itself and Gossai for $100,000. Meislin rejected that offer, believing the case was worth far more—in the range of $600,000. However, as Beck testified, he "felt [a $100,000 settlement] was very reasonable for the case—I informed . . . Meislin that I believed that that was a number she should take."
Beck continued to tell Meislin her settlement position was "terribly unreasonable," and in August 2012, he sent her an e-mail stating that if the case was "forced into trial because your demand remains untenable," he would "be expecting an up front payment in the sum of $50K to cover my fees in the event there is a defense verdict. If you should win, you will get credit for the payment. This way I am assured of compensation that you put at risk by refusing a reasonable settlement."
At trial, Beck characterized his insistence that Meislin pay him $50,000 in cash before he would try the case as an effort to "bring her feet to the ground" about the value of her case. But at another point in his trial testimony, he referred to it as an attempt "to safeguard my 50."
At a subsequent mediation on October 16, 2012, the County raised its settlement offer to $135,000, while Meislin lowered her demand to $300,000. The mediator made a proposal that the case settle for $200,000, and gave the parties time to separately consider that sum. After the mediation concluded, Beck sent Meislin an e-mail, informing her that "if you decide not to accept the mediator's proposal of $200,000, I will require your payment of one half of the $135K they offered today into my client trust account by November 5th. As I have said before, because there is a 50/50 fee split in this case, you can feel free to roll the dice with your half, but not mine."
Meisner responded to Beck's e-mail two days later, on October 18. In an e-mail sent at 3:00 p.m., she told Beck that her review of their retainer agreement did not reveal any provision for a "'50/50 fee split,' nor any provision that requires us to provide you with a 'deposit' of '$50,000, '$100,000, ' . . . one half of the $135K they offered . . . ' or any other amount in advance of trial." She expressed her deep concern that Beck was simply afraid to take the case to trial, and "[b]earing this in mind," Meisner said she came to a "pragmatic decision." She told Beck she would accept the $200,000 settlement proposed by the mediator, "provided you will guarantee us $150,000 in net proceeds. This way you are assured of the full compensation that you contended [in your August 21, 2012 e-mail] that we put 'at risk by refusing a reasonable settlement.'" She asked Beck to convey that acceptance to the settlement officer by the deadline.
Beck responded promptly to Meisner's e-mail, at 4:44 p.m., telling her "I will communicate your acceptance to [the settlement officer]. Now let's hope the County is not so pissed off that they won't meet the . . . proposal." But Beck also went on to answer Meislin's question about the "50/50 fee split," explaining why he believed "paragraph 3" of his retainer agreement set his contingent share of her recovery at 50 percent, and he also reiterated his reasons for demanding payment of his share of a proposed settlement upfront, before trying the case: "I did so because I was unwilling to throw the dice on my portion because you insisted on a trial for reasons wholly unrelated to the prospects of prevailing or recovering sums equal to or in excess of the proposed offer." (Italics added.) Beck then reiterated that demand: "If the County rejects the mediator's proposal, I have to try the case, but I insist that you insure that I have security for the half I am entitled to that can be had without the risk of trial. I have consistently urged you to consider carefully that there is no likelihood you will ever be awarded $300,000 or even $200,000 even if you won and winning completely is not assured. Quite plainly, I want you to put your money where your mouth is to put it bluntly which I feel should cool your ardor for excoriating Gossai in the trial. We are down to brass tacks with the $200K offer and I think it wise for you to accept."
Meislin responded to Beck's e-mail in terse, but clear, fashion, at 6:00 p.m. that same day: "Any and all prior agreements notwithstanding, by accepting our authority to convey acceptance of [the] mediator recommendation you agree to be bound by the terms outlined in the below email of October 18, 2012 3:00 PM"
Beck conveyed Meislin's acceptance of the $200,000 proposal to the settlement officer, and the County agreed to it too. After the parties negotiated the terms of a release, the County issued a $200,000 settlement check to Beck.
Beck claimed, both in written discovery and in his trial testimony, that he could not recall whether he had communicated Meislin's acceptance of the $200,000 proposal before, or after, he had received her 6:00 p.m. e-mail. However, he did not dispute receiving it, and did not claim he responded to it.
However, Beck sent Meislin a check for only $99,192.27 as her share of the settlement, not the $150,000 she had demanded as a condition of agreeing to it. Beck's cover letter transmitting the check stated it was "the final accounting" of fees and costs in the case. Meislin immediately sent a letter to Beck, protesting that the amount was not consistent with her conditional acceptance of the settlement, and asking him to send her another check for the balance of her $150,000.
Beck rejected Meislin's request. He explained to her in an e-mail that "[t]he distribution letter I sent you . . . reflects the contractual distributions between us as to my fees and unpaid costs, notwithstanding your desire to net some other amount. I have not consented to a modification of the original contractual terms, even though[] you wanted me to. The email chain you sent demonstrates it was your desire to net $150K but nowhere have I memorialized any agreement on my part to reduce my fees." (Italics added.)
Beck went on to tell Meislin "I am under no obligation to reduce my contractual expectations and . . . have no wish to do so. Accordingly, there will be no further payments from the County nor from my fee share of the settlement. I trust you will shortly come to understand that a retainer agreement means what it says and both of us are entitled to live up to its expectations."
Meislin then returned the check Beck had sent to her, and demanded he issue a new check to her for the full $150,000 she was entitled to. She told Beck that if she did not receive that check by February 20, 2013, she was demanding a fee arbitration. Beck responded by e-mail, informing Meislin that she would be receiving no additional payment from him, and that her money would remain in his trust account until she requested its return. He also told her that if she wanted to pursue a fee arbitration, it was up to her to initiate it.
Meislin did initiate a fee arbitration, before the Santa Monica Bar Association. In April 2014, the arbitrators issued a non-binding ruling in her favor, awarding her $150,000, plus costs and prejudgment interest. The panel explained in its ruling that when Beck took the affirmative step of communicating Meislin's acceptance of the settlement to the settlement officer, knowing she had conditioned that acceptance on her receipt of $150,000 in net proceeds, he was demonstrating his agreement to that condition.
More specifically, the panel pointed out Beck's retainer agreement gave Meislin the "absolute right" to accept or reject settlement offers, and she was therefore entitled to place whatever conditions she chose on her acceptance of any offer. If Beck had any issue with her announced conditions, he had an affirmative duty to communicate them to her. But instead of doing that, he had communicated her acceptance of the settlement proposal to the opposing side with full knowledge of the condition she had placed on it. He consequently "voluntarily accepted" that condition. The panel also reasoned that when Meislin returned Beck's initial check to him, he had an ethical obligation to immediately return that undisputed portion of the settlement to her, and to confirm to her in writing that the disputed portion of the fee—$50, 807.73—remained in his client trust account.
Beck responded to the arbitration award by filing a complaint in the Superior Court of Orange County in May 2014. In his first amended complaint, he alleged causes of action for breach of contract, declaratory relief, and quantum meruit. He sought judgment in the amount of "not less than $100,807.73 [the amount he claimed to be owed as fees pursuant to the retainer agreement] nor more than $501,300.00 [the amount he claimed was the reasonable value of all the services he had rendered to Beck based on a theory of quantum meriuit]."
Meislin filed a cross-complaint, alleging she had given Beck "written conditional approval to settle the . . . Lawsuit for $200,000 so long as [she] received $150,000 from the settlement proceeds," and he then "settled the . . . Lawsuit," but "refuses to pay [her] $150,000." Meislin alleged causes of action for, among other things, breach of contract. She prayed for damages, and for both prejudgment and postjudgment interest.
The case was tried to the court, sitting without a jury. The court ruled in Meislin's favor, explaining the "key question in the case is the power of the client to place certain conditions on the settlement offer which went against her attorney's wishes." The court concluded Meislin had the power to place conditions on her agreement to settle, noting that Beck's retainer agreement specifically confirmed she had the "absolute right" to accept or reject any settlement.
The court reasoned when Meislin told Beck she would settle the case on the condition she received a net payment of $150,000, he "had two choices. He could accept the settlement offer of $200,000 and pay Meislin $150,000 from the settlement or he could decline the settlement offer and proceed to trial or renegotiate." The court then noted Beck "accepted the settlement offer as it stood" and was consequently bound by the condition Meislin had placed on her acceptance of it.
The court expressly rejected Beck's claim for quantum meruit damages for the services he had rendered in connection with Gossai's appeal. The court concluded any such claim was trumped by the retainer agreement language stating that "[i]n no event shall attorney receive an amount greater than 40% of the final judgment in this matter." The court also rejected Beck's contention Meislin breached the retainer agreement when she refused to accept Beck's final accounting and returned his check. The court stated "Meislin had the right to return the payment as she would settle only on the terms that would provide her $150,000, net proceeds, not $99,192.27."
Although the trial court ruled Meislin was entitled to receive the full $150,000 net settlement she had negotiated with Beck, and also acknowledged she had returned Beck's proffered check for only $99,192.27, the judgment awarded her $50,807.00—representing the difference between Beck's proffered check and $150,000. The judgment also awarded her "interest, at the legal rate."
The court's statement of decision more accurately identifies Meislin's damages as $50,807.73, which is the difference between the $99,192.27 check Beck initially proffered to Meislin, and the $150,000 net payment she had specified she must receive as a condition of authorizing the underlying settlement. However, the "judgment" included within the same document states Meislin is awarded judgment "in the amount of $50,807.00." (Italics added.) We assume the latter reflects a minor clerical error.
DISCUSSION
1. Meislin's $150,000 Net Proceeds Claim
The primary issue on appeal is Beck's contention the trial court erred by ruling Meislin was entitled to enforce the $150,000 condition she placed on her acceptance of the proposed $200,000 settlement in the underlying case. Beck argues a client has no right to "unilaterally repudiate her contractual obligations with her lawyer without the lawyer's approval." True. But that is not what happened here.
What did happen was Meislin, who had the absolute right to accept or reject the settlement offer, gave Beck only conditional authority to settle. At that point Beck had a choice: he could accept her condition—which meant he would receive a smaller percentage of the settlement than he would otherwise have been entitled to under the retainer agreement—or he could refuse. Of course, refusing would very likely mean Meislin's case against Gossai would go to trial—an outcome Beck had made clear he did not want. But not liking his options is not the same thing as not having any. Beck could have refused to accede to Meislin's condition, and then conveyed her rejection of the settlement. He chose instead to move forward with the conditional settlement.
As we noted, Meislin's right to control settlement was expressly stated in Beck's retainer agreement. Also, existing law clearly provides it is the client, not the attorney, who owns the cause of action and thus has the authority to compromise it. As explained in Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 404, an attorney is merely acting as the client's agent in litigation, with limited decision-making authority. "An attorney is not authorized . . . , merely by virtue of his retention in litigation, to 'impair the client's substantial rights or the cause of action itself.'" Instead, "'[T]he law is well settled that an attorney must be specifically authorized to settle and compromise a claim, that merely on the basis of his employment he has no implied or ostensible authority to bind his client to a compromise settlement of pending litigation. . . .'" (Ibid.; see Levy v. Superior Court (1995) 10 Cal.4th 578, 583.) Further, that Beck's contingent fee entitled him to a percentage of Meislin's recovery in the litigation changes nothing. As explained in Isrin v. Superior Court (1965) 63 Cal.2d 153, 159, "contingent fee contracts 'do not operate to transfer a part of the cause of action to the attorney but only give him a lien upon his client's recovery.'"
Moreover, attorneys sometimes offer to do that as incentive for the client to accept a settlement the attorney believes would be the best opportunity to resolve the litigation. (See Chan v. Lund (2010) 188 Cal.App.4th 1159, 1177 [finding no impropriety in attorney's offer to discount fee in exchange for the client's agreement to settle].) As Meislin herself made clear, she understood Beck was far more interested in settling the litigation than she was, and she was willing to give him what he wanted only if she got her price for settlement.
And as Beck made clear, he knew Meislin's primary goal in the litigation was to have her day in court against Gossai—or as he characterized it, he believed Meislin had an "ardor for excoriating Gossai in the trial." What is disturbing is that Beck apparently viewed Meislin's litigation goal as merely an unreasonable obstacle that was impeding his desire to maximize his fee recovery.
But Meislin's litigation goal, not Beck's, was paramount. His obligation as her counsel was to serve her interests in the litigation, not elevate his own above them. "[T]he duty of loyalty to the client forbids any act that would interfere with the dedication of an attorney's 'entire energies to [the] client's interests.'" (Flatt v. Superior Court (1994) 9 Cal.4th 275, 289.) By focusing on preserving his fee, while disregarding Meislin's desire for public vindication, Beck failed to serve her interests.
Of course, attorneys are not without any options for protecting their own interest in collecting a contingent fee. In Ramirez v. Sturdevant (1994) 21 Cal.App.4th 904, 918 (Ramirez), the court held that an attorney could negotiate a reasonable limitation on a client's authority to refuse a proffered settlement, as part of a contingent fee agreement. In Ramirez, a discharged employee retained an attorney on a contingency fee basis to represent her in an action against her former employer. (Id. at pp. 910-912.) After the employer prevailed at the trial court level, the attorney agreed to represent the employee on appeal, but on the condition she would accept any settlement offer of at least $150,000. (Ibid.)
The Ramirez court concluded this agreed-upon limitation was enforceable because it promoted settlement for a reasonable estimate of the value of the employee's claims while also protecting the attorney's interest in being paid—and because the attorney took no unfair advantage of the client in negotiating the limitation. (Ramirez, supra, 21 Cal.App.4th at pp. 917-918.) As the court explained: "We cannot fault an attorney who has spent, or who anticipates spending, a substantial amount of time prosecuting a case under a contingency fee agreement, for being concerned that the client might reject a reasonable settlement offer. Such a rejection risks that the client, and thus the attorney, ultimately will recover nothing and be out-of-pocket the incurred costs of litigation." (Id. at p. 918.)
Although Ramierez was decided in 1994, and Beck entered into his retainer agreement with Meislin 12 years later, he included no similar provision limiting her authority to reject a proposed settlement. Had he done so, it might have prompted a productive, pre-retainer conversation about Meislin's expectations for the litigation, and whether they were consistent with his own beliefs about the value of her claim and her presumed interest in resolving it short of trial. But by agreeing to the retainer without including such a provision, Beck assumed the risk of a client who did not share his vision of a "reasonable" settlement, and thus the risk of having to go to trial on a case he would prefer to settle. By offering him conditional authority to settle the case, Meisner simply gave him an additional option for resolving the case, which he was free to accept or reject. There was nothing inherently unfair or improper in that.
Beck contends the court's judgment in favor of Meislin was flawed for other reasons as well. First, he asserts that her testimony about having entered into an "oral" agreement with him for a net $150,000 recovery from the settlement was fatally inconsistent with her cause of action for breach of the written retainer agreement, and thus she cannot recover damages based upon that supposed oral agreement. We reject the assertion.
The form of Meislin's agreement with Beck is not determined by how she referred to it at trial. The undisputed evidence demonstrated that Beck and Meislin exchanged a series of e-mails, which reflected the terms of what became an executed modification of their written retainer agreement once Beck conveyed Meislin's conditional acceptance of the proposed settlement to the opposing party in the underlying litigation. (Civ. Code, § 1698, subd. (b) ["A contract in writing may be modified by an oral agreement to the extent that the oral agreement is executed by the parties"].)
Moreover, that modification was entirely consistent with both the specific facts Meislin alleged in support of her cause of action for breach of contract, and the facts Beck alleged in his first amended complaint. There was certainly no unfair surprise when she relied on the e-mail exchange as the basis for finding a modification to the written retainer agreement at trial. Thus, the two cases Beck relies upon in support of his argument, Healy v. Brewster (1963) 59 Cal.2d 455, 464, and Seebach v. Kuhn (1908) 9 Cal.App.485,489, are both inapposite.
Meislin's cross-complaint alleges, in pertinent part, "Meislin gave . . . Beck written conditional approval to settle the . . . Lawsuit for $200,000 so long as . . . Meislin received $150,000 from the settlement proceeds. . . . Meislin reasonably and justifiably relied upon . . . Beck to provide her $150,000 in connection with approving the . . . Lawsuit settlement. . . . Beck settled the . . . Lawsuit." Those facts were incorporated into her breach of contract cause of action.
Beck alleged that "[a]fter multiple unsuccessful settlement conferences, on October 18, 2012, . . . Meislin communicated her acceptance of the District Court Mediator's Proposal in the sum of $200,000 in writing to . . . BECK and at the same time, purported to unilaterally abrogate the August 8, 2006 retainer contract by demanding BECK guarantee . . . Meislin net $150,000 rather than the 50% attorney fee provided by said contract. . . . BECK did not consent, expressly or impliedly, to . . . Meislin's attempted repudiation of the fees earned under the retainer agreement and advised . . . Meislin he would communicate [her] acceptance of the $200,000 offer to the County . . . while at the same time reiterating to . . . Meislin that her retainer agreement provided for 50% compensation."
Beck's second assertion is that the evidence was insufficient to support the trial court's conclusion that he accepted Meislin's proposed modification to the fee provision of the retainer agreement. Again we cannot agree. According to Beck, when he responded to Meislin's conditional offer to settle, he told her two things: first, that he would convey her acceptance to the mediator; and second that he was rejecting her proposal to reduce his fee, which he considered "an evasion of the fees and costs reimbursement provisions of the [retainer agreement]."
However, Beck's e-mail response does not convey any rejection of the proposed fee reduction. After informing Meislin "I will communicate your acceptance to [the mediator]"—and thus impliedly agreeing to the condition she had placed in it—Beck proceeded to respond to the other points made in Meislin's e-mail, including her statement that she had found "no provision for a '50/50 split'" in his fee agreement. Beck's response is "[a]s to the 50% provision in the retainer agreement, refer to paragraph 3 which states: '. . . Attorney's obligation to represent Client under this agreement extends to an appeal only if Client is a respondent and subject to the greater of a 50% attorney fee or court awarded fees as provided in Paragraph 6 . . . .' When the City . . . appealed, you were respondents." But after explaining the basis for the 50 percent fee claim he had asserted in his prior e-mail, Beck did not reiterate any insistence on enforcing it, or otherwise inform Meislin he was rejecting the $150,000 net recovery condition she had placed on her agreement to settle the case for $200,000.
In fact, Beck says nothing at all in his e-mail about what will happen if the County also accepts the mediator's $200,000 settlement proposal. Instead, he restates his assertion that "[i]f the County rejects the mediator's proposal, [and] I have to try the case," Meislin would be required to "insure that I have security for the half I am entitled to [referring to his half of the money on the table, i.e., $135.000] that can be had without the risk of trial." In short, whatever rejection of Meislin's proposal Beck may have believed he was conveying in his e-mail, the actual words of the e-mail conveyed none. And it is the words of the e-mail, rather than Beck's subjective intent, which matter. (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 956 ["'[i]t is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation'"].)
But even if there was some uncertainty created by Beck's initial response to Meislin's conditional settlement proposal, her reply could not have been more clear: "[a]ny and all prior agreements notwithstanding, by accepting our authority to convey acceptance of [the] mediator recommendation, you agree to be bound by the terms outlined in the below email of October 18, 2012 3:00 PM." (Italics added.) And while Beck testified he could not remember whether he received that second e-mail before, or after, he conveyed Meislin's acceptance of the proposed settlement to the mediator, he concedes he did receive it and did nothing in responset. He made no effort to dispute her characterization of what conveying her acceptance meant, or to withdraw her acceptance, if already conveyed to the mediator.
In either circumstance, Beck's inaction was itself sufficient evidence to support the trial court's determination he had implicitly agreed to Meislin's terms. "A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as the facts are known, or ought to be known, to the person accepting." (Civ. Code, § 1589; Durgin v. Kaplan (1968) 68 Cal.2d 81, 91 ["It is clear that a party will not be permitted to receive and enjoy benefits that he knows are being offered to him at a price without paying for them"].) Meislin made clear her price for authorizing the settlement, and she never waivered from it. Consequently, Beck's continued pursuit of the settlement implied his consent to her price.
Finally, Beck contends Meislin admitted in her testimony that she knew he had not agreed to take a fee reduction. Not so. Meislin merely testified that her focus was on communicating to Beck what she wanted, with the understanding he might not go along with it. As she explained, she was merely "telling [him] that I would accept the $200,000 as long as I netted $150,000," and at that point, she "wasn't even considering the $50,000 or the 50/50 split or the 40 percent or the 33 percent. What I knew was that we had come this far and I wanted to net $150,000." Meisner believed that if Beck wasn't "comfortable with that authorization to settle on that contingency . . . [he] could have said I don't agree with this. I will go back to the County and ask them to offer more. I quit." And she explicitly stated she understood Beck's statement "that 'I will communicate your acceptance to [the mediator]' as [Beck's] acceptance."
Having rejected all of Beck's arguments, we find no error in the trial court's determination that Meislin was entitled to recover a net $150,000 from the settlement in the underlying case. 2. Beck's Quantum Meruit Claim
In his reply brief, Beck also contends that Business and Professions Code section 6147 "bars enforcement" of the modification to his retainer agreement. However, "[p]oints raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument." (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.) Beck has offered no justification for his failure to raise this point in his opening brief, and thus we decline to consider it. "'[T]he rule is that points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before.'" (Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335, fn. 8.) --------
Beck also contends the court erred by rejecting his claim for a quantum meruit recovery for the value of the services he rendered in connection with Meislin's appeal of the summary judgment entered in favor of Gossai. Again, we are unpersuaded.
As Beck himself describes it, "[q]uantum meruit refers to the well-established principle that 'the law implies a promise to pay for services performed under circumstances disclosing they were not gratuitously rendered.'" (Huskinson & Brown v. Wolfe (2004) 32 Cal.4th 453, 458.) In this case, however, there is substantial evidence Beck's appellate services were gratuitously rendered.
Beck assumes paragraph 3 of his retainer agreement, which states he is not obligated to provide any legal services with respect to "any appeal in which Client is an appellant," also specifies the client would be obligated to compensate him separately if he nonetheless chooses to provide those services. But it does not say that. It merely states he is not obligated by the terms of that agreement to provide those services.
However, Beck acknowledges he did elect to pursue an appeal against Gossai on Meislin's behalf, even though he was not obligated to do so. He does not claim Meislin asked him to undertake the appeal. And as Beck concedes, "no separate retainer [was] executed for this second appeal, as should have been the case under Paragraph 3 . . . ."
Moreover, Beck does not claim he even informed Meislin—he expected separate compensation for his appellate services at the time he elected to perform them, nor does he claim he ever billed her for those services at or near the time they were performed. Indeed, as Meislin points out, the list of "Detail Charges" Beck relied upon at trial as evidence of his appellate services was dated July 27, 2015—more than two years after the underlying case settled, and only a month before trial in this case began. And finally, when Beck provided Meislin with his "final accounting" in the case, and proffered her a check for what he claimed was her share of the settlement funds, he made no mention of her supposed obligation to also compensate him for his appellate work.
As our recitation of the evidence makes clear, Beck failed to demonstrate he actually expected to receive separate compensation for his appellate work at the time he performed that work—let alone that he had ever conveyed that expectation to Meislin. Instead, it appears Beck elected to pursue the appeal against Gossai because he believed there was a good chance of securing a reversal of the judgment in her favor, and he could then share in any subsequent recovery obtained from the County by virtue of his contingent fee agreement—and he was right. No additional compensation was expected. 3. Meislin's Request to Correct the Judgment
The trial court's statement of decision and judgment stated the court was awarding "Judgment in favor of Meislin on the Cross-Complaint against Beck in the amount of $50,807.00, plus interest, at the legal rate." In her cross-appeal, Meislin asks us to correct the judgment to reflect that the amount she is entitled to recover from Beck is the full $150,000 she was supposed to receive as her share of the underlying settlement, rather than merely the difference between the $99,192.27 Beck had initially proffered to her and the full $150,000.
As Meislin points out, the trial court's statement of decision included findings that: (1) Beck was required to pay her the full $150,000 net amount she had specified as a condition of settling the underlying case; (2) she had refused Beck's check for $99,192.27, which he characterized as reflecting a "final accounting" of their shares in the settlement fund; and (3) she "had the right to return the payment as she would settle only on the terms that would provide her $150,000.00, net proceeds, not $99,192.27." In light of those findings, we agree Meislin was entitled to a judgment against Beck for the full $150,000 he was obligated to pay her from the underlying settlement, and not merely the difference between the amount he initially offered to pay—which she properly refused to accept—and the $150,000.
Beck opposes Meislin's request to correct the judgment, making two points. First, he claims Meislin "made this identical argument to the trial judge in a post trial motion to amend [the judgment] based on clerical errors which the court rejected." But as Meislin points out in reply, the court neither granted nor denied the motion. Instead, the court "decline[d] to rule on this motion" because the judgment was already on appeal, and the court concluded it "lacks jurisdiction to hear this motion at this time."
Second, Beck argues correcting the judgment would be improper as it would "materially alter the judgment to include sums and issues that were not before the court for resolution and cannot properly be added to the judgment." Specifically, Beck claims that because both his complaint and Meislin's cross-complaint "concerned only the disputed amount of $50,807 as between Beck and Meislin based on their [retainer agreement], the court lacked jurisdiction to award an uncontested sum greater than both sides disputed." Not so.
Beck's first amended complaint alleges that after Beck "paid . . . Meislin . . . a net of $99,192.29," she "returned [the check] to [Beck] insisting she was entitled to be paid $150,000.00 net." And Meislin's cross-complaint specifically alleges Beck breached the parties' retainer agreement by "failing to provide . . . Meislin $150,000 of the $200,000 . . . Lawsuit settlement proceeds . . . ." Thus, not only did both the first amended complaint and the cross-complaint reflect that Meislin's right to recover the full $150,000 was at issue, the first amended complaint explicitly acknowledged she had rejected Beck's attempt to pay her only a portion of that sum. Thus, there was no jurisdictional impediment to awarding Meislin the full $150,000.
And significantly, Beck nowhere claims he actually paid Meislin what he concedes is the undisputed amount of $99,192.29 he continued to owe her after her initial rejection of his check—and there is no evidence he did. To the contrary, Beck affirmatively pleaded in his first amended complaint that an aspect of Meislin's alleged breach of the retainer agreement was that she "refuses to accept payment of the only sum due to her, i.e., $99,192.29." And he acknowledged at trial that the undisputed portion of the funds he owes to Meislin remained in his client trust account. As he explained it, "she returned the check and made a demand on me for 50,000 additional dollars from the $200,000, which I refused to pay. And that's where the dispute remains." (Italics added.)
Because it is undisputed that as of the time of trial, Beck had not paid Meislin any portion of the $150,000 the trial court concluded he was obligated to pay her from the underlying settlement, it was error for the court to award her only $50,807 in damages. Meislin was entitled to a judgment for the full $150,000 she was owed.
And finally, Beck's suggestion that the judgment amount cannot be corrected "by amendment" because it constitutes a judicial error, rather than a clerical error, is misplaced. On appeal, we can certainly address, and correct, judicial error. In this case, we will modify the judgment to reflect Meislin is entitled to recover $150,000 from Beck. 4. Meislin's Pre-Judgment Interest Claim
Meislin also argues the trial court erred by failing to award her prejudgment interest. However, we conclude the court did award it.
Civil Code section 3287, subdivision (a) provides: "A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt." As explained in Watson Bowman Acme Corp. v. RGW Construction, Inc. (2016) 2 Cal.App.5th 279, 293, "[u]nder this provision, the trial court has no discretion—it must award prejudgment interest from the first day there exists both a breach and a liquidated claim."
In this case, the trial court concluded Meislin was entitled to payment of a sum certain—$150,000—and the evidence demonstrated she should have been paid that sum on January 29, 2013, which is the date Beck proffered her a check for only $99,192.27 and characterized it as a "final accounting" of his obligation to her. Meislin's refusal to accept that insufficient payment, accompanied by her insistence that Beck pay her the full amount due, did not prevent him from paying her what he owed. Under these circumstances, Meislin was entitled to prejudgment interest from that date.
And the judgment does reflect she was awarded damages "plus interest, at the legal rate." (Italics added.) And while it does not specify that the interest awarded is "prejudgment," rather than "postjudgment," we can conceive of no reason for the court to have included an award of postjudgment interest within the judgment, as the right to collect such interest automatically attaches to all money judgments by statute.
Code of Civil Procedure, section 685.010, subdivision (a) provides: "Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied." And Code of Civil Procedure 685.020, subdivision (a) states: "Except as provided in subdivision (b) [referring to judgments payable in installments], interest commences to accrue on a money judgment on the date of entry of the judgment." (See North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 829 [specifying that an award of interest is not automatic "except in the case of postjudgment interest"].)
By contrast, an award of prejudgment interest is an element of damages (North Oakland Medical Clinic v. Rogers, supra, 65 Cal.App.4th at p. 830), and a plaintiff will not be allowed to collect it in the absence of its affirmative inclusion in the judgment. In this case, the judgment included such an award.
Although Beck does not challenge Meislin's theoretical entitlement to prejugment interest in this case, he does argue the trial court would have erred by awarding it because Meislin did not timely request such an award. We disagree. As Meislin points out, she requested an award of prejudgment interest in her cross-complaint, and reiterated that request in her trial brief. That was a sufficient request to invoke the court's power to award prejudmgnet interest. "A general prayer in the complaint is adequate to support an award of prejudgment interest. 'No specific request for interest need be included in the complaint; a prayer seeking "such other and further relief as may be proper" is sufficient for the court to invoke its power to award prejudgment interest. [Citations.]'" (North Oakland Medical Clinic v. Rogers, supra, 65 Cal.App.4th at p. 829.)
We consequently affirm the trial court's award of prejudgment interest to Meislin. But because the court did not specify a date from which the prejudgment interest would accrue, we will modify the judgment reflect the award of prejudgment interest begins accruing on January 29, 2013. 5. Meislin's Attorney Fee Claims
The parties' retainer agreement provides "[t]he prevailing party in any action or proceeding to enforce any provisions of this agreement will be awarded reasonable attorney's fees and costs incurred in that action or proceeding or in efforts to negotiate the matter." Although Meislin clearly prevailed on both Beck's complaint alleging she breached the retainer agreement, and on her own cross-complaint alleging that he did, the trial court properly denied her an award of attorney fees on the basis "she is not entitled to attorney fees as a pro-per."
However, Meislin is represented by counsel on appeal, and she has requested an award of attorney fees incurred in this appeal. We conclude she is entitled to recover those fees as she remains the prevailing party (Butler-Rupp v. Lourdeaux (2007) 154 Cal.App.4th 918, 923 [contractual right to recover attorney fees applies to fees incurred on appeal]), and we will remand the case to the trial court for a determination of the amount of fees Meislin is entitled to for this appeal. 6. State Bar Referral
Although Business and Professions Code section 6086.7 does not require that we notify the State Bar of Beck's potential misconduct in this case, we exercise our discretion to do so. We are frankly startled by Beck's treatment of Meislin in the underlying case, including his apparent unwillingness to even consider there might be an ethical problem with an attorney demanding that his client pay his contingent fee in advance of any recovery, merely because he disapproves of her litigation goals. Having said that, however, we express no opinion as to whether Beck's treatment of Meislin was unethical or warrants discipline by the State Bar.
DISPOSITION
The judgment is modified to reflect (1) the amount of damages awarded in favor of Meislin, and against Beck, is $150,000, and (2) that prejudgment interest accrues on that amount from January 29, 2013. As modified, the judgment is affirmed. Meislin is entitled to her costs on appeal, including an award of reasonable attorney fees incurred on appeal. The case is remanded to the trial court for a determination of the amount of attorney fees to be awarded to Meislin.
The clerk of this court is directed to forward a copy of this opinion to the State Bar. (Bus. & Prof. Code § 6086.7, subd. (a)(2).)
THOMPSON, J. WE CONCUR: O'LEARY, P. J. IKOLA, J.