Opinion
A164113
12-05-2022
In re Marriage of VICKI and WALTER ORR. v. VICKI TOLIVER, Respondent; WALTER ORR, Respondent, DUSHAWN JOHNSON, Appellant.
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. C-813494
VAN AKEN, J. [*]This appeal concerns a third party claimant's motion to join a family law proceeding. Respondents Walter Orr and Vicki Toliver purchased a house during their marriage but transferred the property to Orr's father soon thereafter. Almost 20 years later-a decade after Orr and Toliver divorced and shortly after the death of Orr's father-Orr initiated legal proceedings with his brother that resulted in a settlement agreement for Orr to repurchase the house. Dushawn Johnson, the appellant here, represented Orr in that case by contingency fee agreement. The case settled, but Johnson and Orr disagreed about the amount of fees Orr owed Johnson. Separately, Toliver filed a request in the family law proceeding seeking division of the house as an omitted community asset. Johnson tried to join the family law proceeding, claiming an interest in the house. The trial court denied Johnson's request for joinder, and Johnson appealed. We affirm the trial court's decision.
We refer to respondent Vicki Orr by the last name restored to her upon entry of the dissolution judgment to avoid any confusion with Walter Orr.
BACKGROUND
A. House Purchase and Family Law Action
In 1990, Orr and Toliver purchased a house in Oakland. Orr's father loaned them the funds for the down payment. By 1992, Orr and Toliver could no longer afford the mortgage and property tax payments, so they transferred the property to Orr's father. Orr's father paid off the mortgage in its entirety. Orr and Toliver divorced many years later; a judgment was entered in 2002, dissolving their marital status as of 1999.
B. Settlement Between Orr and Brother
After Orr's father died in 2019, Orr initiated a civil action in Alameda County Superior Court and a probate action in Los Angeles County Superior Court with his brother regarding ownership of the house. Orr entered into a contingency fee agreement with Johnson to represent him in these actions. According to Johnson, the agreement provided that if the case was settled after the initiation of litigation but at least 30 days prior to trial or arbitration, Johnson would receive 33.3 percent of Orr's" 'net recovery.'" " 'Net recovery'" is defined in the agreement as:" '(1) the total of all amounts received by settlement, arbitration award or judgment, including any award of attorneys' fees, (2) minus all costs and disbursements set forth in Paragraph 8" and "will also include the reasonable value of any non-monetary proceeds.' "
In 2020, Orr and his brother entered into a settlement agreement to resolve the civil and probate actions. Orr paid his brother $75,000 for the purchase of the house. Orr paid Johnson $23,664.30 in attorneys' fees. According to Orr, his settlement statement contained entries for the fees owed to Johnson, "which were discussed and verbally agreed upon prior to the payment of said fees."
C. Johnson's Civil Action
In March 2021, Johnson filed a civil action against Orr in Alameda County Superior Court and recorded a lis pendens with the Alameda County Recorder's Office. Johnson also filed a notice of attorney's lien in the civil and probate actions between Orr and his brother. According to Johnson, Orr engaged a realtor in May 2021 to open a pre-sale escrow and, "fearing [Orr] was attempting to sell the Subject Property without satisfying the attorney lien," Johnson filed a motion for the preliminary injunction in his civil action that the trial court granted in part, "enjoining [Orr] from encumbering/selling the Subject Property."
Johnson also named Toliver and an escrow company as defendants, contending that the escrow company is "a stakeholder holding some of the funds [he] asserts should be paid towards the attorney's fees and costs due."
In the civil action, Johnson contends that if the "reasonable value" of the house was $500,000, he is entitled to $166,500 (one-third) plus one-third of any rent Orr has collected since reacquiring the house. Orr and Johnson proceeded to fee arbitration and the hearing took place in May 2022. The record does not reflect the outcome of their arbitration.
The asserted basis for Johnson's entitlement to one-third of the value of rent is not apparent from the briefing or record. According to Johnson, the house has not generated any rental income since ownership was transferred to Orr. Also, Johnson concedes that his claim for one-third of the value of the house plus one-third of rents does not take into account the $75,000 Orr paid to his brother, or the $23,664.30 Orr has already paid to Johnson in fees.
D. Toliver's Request for Order in Family Law Action
In September 2021, Toliver requested an order in the family law action dividing the house as marital property. According to Johnson, Toliver contends that the house was a community asset omitted from the dissolution judgment. According to Orr, Toliver is renewing a claim she made in the underlying dissolution proceeding: that she signed the transfer deed under duress.
E. Johnson's Request for Joinder in Family Law Action
Shortly after Toliver filed her request, Johnson filed a motion for joinder in the family law action. Johnson requested that he be "allowed to join/intervene in this action as an indispensable party" because he had claimed "an interest relating to the Subject Property" (the house), such that complete relief could not be accorded between Orr and Toliver without him, and his absence might impair or impede his ability to protect his interest. Specifically, Johnson stated that he had" 'a colorable argument to one-third of the value of the Subject Property after expenses.'" The family court denied Johnson's request, finding the joinder "would confuse and delay the issues in this case." It also advised both parties that "pending the outcome of these proceedings, the Automatic Temporary Restraining Orders are still in effect with regard to the real property . . . . Neither party shall transfer, encumber, hypothecate, conceal, or in any way dispose of this property without the written consent of the other or an order of the court."
This appeal followed.
DISCUSSION
Johnson argues that the family court abused its discretion in denying his request to join the proceeding between Orr and Toliver because Johnson has a "competing ownership claim" and "attorney's lien" against the house at issue in that proceeding. We begin with the general framework regarding joinder in family law actions.
I. Joinder Framework in Family Law Actions
Family Code section 2021, subdivision (a), provides the statutory basis for joinder to a family law action: a court "may order that a person who claims an interest in the proceeding be joined as a party to the proceeding in accordance with rules adopted by the Judicial Council . . . ." California Rules of Court, rule 5.24 states that "[a] person who claims or controls an interest in any matter subject to disposition in the proceeding may be joined as a party to the family law case only as provided in this chapter." (Italics added.)
Further references to rules are to the California Rules of Court.
A. Requests for Joinder
California Rules of Court, rule 5.24(c), identifies the persons who may seek joinder in a family law case. It provides, in relevant part, that "[t]he petitioner or the respondent may apply to the court for an order joining a person as a party to the case . . . who has in his or her possession or control or claims to own any property subject to the jurisdiction of the court in the proceeding." (Rule 5.24(c)(1).) It also provides that a person "served with an order temporarily restraining the use of property that is in his or her possession or control or that he or she claims to own . . . may apply to the court for an order joining himself or herself as a party to the proceeding." (Rule 5.24(c)(3).)
B. Permissive Joinder
Rule 5.24(e) sets forth the categories of mandatory and permissive joinder in family law proceedings. Mandatory joinder is not relevant here; it applies to claims related to child custody or visitation. (Rule 5.24(e)(1).) As for permissive joinder, the trial court may join additional persons "if the court finds that it would be appropriate to determine the particular issue in the proceeding and that the person to be joined as a party is either indispensable for the court to make an order about that issue or is necessary to the enforcement of any judgment rendered on that issue." (Rule 5.24(e)(2).) "In deciding whether it is appropriate to determine the particular issue in the proceeding, the court must consider its effect on the proceeding, including: [¶] (A) Whether resolving that issue will unduly delay the disposition of the proceeding; [¶] (B) Whether other parties would need to be joined to make an effective judgment between the parties; [¶] (C) Whether resolving that issue will confuse other issues in the proceeding; and [¶] (D) Whether the joinder of a party to determine the particular issue will complicate, delay, or otherwise interfere with the effective disposition of the proceeding." (Rule 5.24(e)(2)(A)-(D).)
C. Standard of Review
Where joinder is permissive, we review the denial of a joinder request for abuse of discretion. (Schnabel v. Superior Court (1994) 30 Cal.App.4th 758, 763.) With this framework in mind, we turn to Johnson's arguments on the merits of his request.
II. Johnson's Joinder Request under Rule 5.24(c)
Johnson argues that his joinder request was proper under rule 5.24(c) because he has a "competing ownership claim" in the house for which Toliver has sought division in the family law proceeding. We disagree because a rule 5.24(c) joinder request is specifically limited to certain categories of persons. Rule 5.24(c)(1) provides that "the petitioner or respondent" in the family law action may seek joinder of a third party with an ownership claim. Johnson offers no authority for his position that a third party claimant may move for joinder under rule 5.24(c)(1). Nor are we persuaded that Johnson satisfies the definition under rule 5.24(c)(3) as a person "served with an order temporarily restraining the use of property" that he claims to own. While Johnson may have sought and obtained some temporary injunctive relief in his civil action, he was not "served" with any such order.
Even assuming his third party request was proper, we are not persuaded that Johnson meets the standard under either rule 5.24(c) category as a party with an ownership claim. Johnson's assertion that he has an "ownership interest" in the house is plainly contrary to the contingency fee agreement he entered with Orr. According to Johnson, the contingency fee agreement entitled him to receive 33 percent of Orr's "net recovery" in the settlement, defined to include "the reasonable value of any non-monetary proceeds." By these express terms, Johnson asserts a potential monetary interest (the "reasonable value") against Orr; Johnson does not have a claim to ownership of the house. (See, e.g., Century Transit Systems, Inc. v. American Empire Surplus Lines Ins. Co. (1996) 42 Cal.App.4th 121, 126 ["The principal rule of contract interpretation is to give effect to the parties' intent as expressed in the terms of the contract"].) Johnson argues otherwise by citing to authority regarding joinder of entities with ownership interests; these cases are inapposite because they involve parties with ownership interests but do not establish that Johnson's contingency-fee agreement creates such an ownership interest. (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1455 [family law court properly granted wife's request for joinder of third party property owner]; Ranch at the Falls LLC v. O'Neal (2019) 38 Cal.App.5th 155, 172 [homeowners were indispensable parties to lawsuit involving easements on private streets abutting lots]; Sierra Club, Inc. v. California Coastal Com. (1979) 95 Cal.App.3d 495, 498 [developer of real estate project was indispensable party in action to set aside permit authorizing project].)
In sum, we conclude that Johnson was not a person who could seek permissive joinder pursuant to rule 5.24(c), and the family court did not abuse its discretion in denying his request.
III. Johnson's Attorney's Lien
Having rejected Johnson's ownership claim, we now turn to rule 5.24(e)(2) to determine whether the trial court abused any discretion to join Johnson as an indispensable party based on his alternative claimed interest: an attorney's lien on the property.
"[C]ontingent 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.'" (Isrin v. Superior Court of Los Angeles County (1965) 63 Cal.2d 153, 159.) "To hold that a contingent fee contract or any 'assignment' or 'lien' created thereby gives the attorney the beneficial rights of a real party in interest, with the concomitant personal responsibility of financing the litigation, would be to demean his profession and distort the purpose of the various acceptable methods of securing his fee." (Id. at p. 161.) "In California, an attorney's lien is created only by contract-either by an express provision in the attorney fee contract [citations] or by implication where the retainer agreement provides that the attorney is to look to the judgment for payment for legal services rendered." (Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1172.)
It is well-settled that an attorney "must bring a separate, independent action against the client to establish the existence of the lien, to determine the amount of the lien, and to enforce it." (Carroll v. Interstate Brands Corp., supra, 99 Cal.App.4th at p. 1173.) "[T]he trial court in the underlying action has no jurisdiction to determine the existence or validity of an attorney's lien on the judgment." (Ibid.) Given this authority, the family law proceeding is not the forum to determine the attorney lien issue between Orr and Johnson. Johnson has already filed a separate, independent action to resolve his claim.
None of the other cases cited by Johnson alter our conclusion. In re Marriage of Ramirez (2011) 198 Cal.App.4th 336 involved a written settlement agreement between husband and wife dividing real property with existing encumbrances. (Id. at p. 339.) Prior to that agreement, counsel representing the wife had executed a declaration effecting a family law attorney's real property lien (FLARPL) to attach to the property. (Ibid.) Claiming he had no notice of the FLARPL, the husband initiated a family law proceeding to force the wife and her counsel to remove the FLARPL. The family court vacated the FLARPL. (Ibid.) Ramirez reversed, concluding that the attorney should have been joined as an indispensable party to the FLARPL proceeding because she was the lienholder whose interests were extinguished in the proceeding. (Id. at pp. 345-346.) Here, unlike Ramirez, there is no FLARPL and Toliver did not initiate the family law proceeding to vacate Johnson's purported attorney's lien on the property. There is no basis to conclude that the proceeding would cause an attorney lien to be extinguished. Moreover, as Johnson concedes, the family law action appears to be proceeding in a manner consistent with the relief Johnson has so far obtained in his civil action: upon denying the joinder request, the family court advised Orr and Toliver that the temporary restraining orders prohibiting transfer, encumbrance, or disposition of the property were still in effect.
Family Code section 2033, subdivision (a) provides that a party may encumber his or her interest in community real property through an FLARPL "to pay reasonable attorney's fees in order to retain or maintain legal counsel in a proceeding for dissolution of marriage, for nullity of marriage, or for legal separation of the parties."
In Kaczorowski v. Mendocino County Board of Supervisors (2001) 88 Cal.App.4th 564, the plaintiff filed an action claiming the Board had violated the California Environmental Quality Act by not requiring an environmental impact report for a proposed project. (Kaczorowski, at pp. 566-567.) Kaczorowski concluded that the plaintiff had failed to join the California Coastal Commission (the entity that issues the permits and hears an appeal of the Board's decision) as an indispensable party, and thus any judgment against the Board would not bind the Commission and would be vulnerable to collateral attack by the Commission. (Id. at p. 570.) Here, unlike Kaczorowski, complete relief between Orr and Toliver can be afforded in the family law proceeding without intervention by Johnson. At base, Johnson's request for joinder appears to have been motivated by his interest as a potential creditor of Orr: if Orr retains full ownership of the house, Orr will have assets to satisfy any recovery Johnson obtains in his civil action. But that monetary interest against Orr does not make Johnson an indispensable party in the family law proceeding between Orr and Toliver. Orr has the same interest in protecting his ownership of the house. (See, e.g., Imperial 152 Cal.App.4th 13, 38 [absent party is not indispensable where interests with existing party are sufficiently aligned].)
In sum, we conclude that the family court did not abuse its discretion under rule 5.24(e) in denying Johnson's request for joinder.
DISPOSITION
The order is affirmed. Respondent Orr is entitled to his costs on appeal.
We concur: Stewart, P.J., Richman, J.
[*] Judge of the San Francisco Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.