Opinion
Page 1711a
110 Cal.App.4th 1711a __ Cal.Rptr.3d __ FARIDEH JALALI, Plaintiff and Respondent, v. WALTER H. ROOT III, Defendant and Appellant. G029474 California Court of Appeal, Fourth District, Third Division July 8, 2003(Super. Ct. No. 810531)
ORDER DENYING REHEARING AND MODIFYING OPINION; CHANGE IN JUDGMENT
SILLS, P.J.
The petition for rehearing is DENIED. The opinion filed June 9, 2003, 109 Cal.App.4th 624 is hereby modified as follows;
1. On page 10 of the slip opinion, at the end of the first complete paragraph (the one ending with “her proof of damage fails”) insert the following citation:(See Orrick Herrington & Sutcliffe v. Superior Court (2003) 107 Cal.App.4th1052, 1057 [132 Cal.Rptr.2d 658] [“A plaintiff alleging legal malpractice in the prosecution or defense of a legal claim must prove that, but for the negligence of the attorney, a better result could have been obtained in the underlying action”].)
2. On page 12 of the slip opinion, in the last pargraph, insert the following parenthetical comment after the sentence which ends with the words “against the IRS in federal court”: (That said, we express no opinion on Root’s argument that Jalali was required to do it the hard way and fight her battle all the way through the federal courts before she could bring her malpractice claim.)
3. On page 13 of the slip opinion, in the paragraph which ends with the words “unintended consequences,” substitute the words “civil rights” in place of the “personal injury.”
4. On page 13 of the slip opinion include a new centered subheading “D” just before the pargraph which begins with the words “Because we conclude that Root ....”
5. On page 13 of the slip opinion, insert the following material after the sentence in the first complete paragraph:Our decision as to fiduciary duty also technically obviates another basis for upholding the award, which is a quasi-contractual money had and received claim. The jury awarded Jalali $248,160 on this cause of action, but made it clear in a special finding that
Page 1711b
the money was to be included in the $310,000 malpractice award. The award is supported in Jalali’s respondent’s brief solely on a fraud theory, and, as we have just concluded, there was no fraud.
However, several months after the respondent’s brief was filed, Division Four of the First Appellate District handed down Orrick Herrington & Sutcliffe, supra, 107 Cal.App.4th1052, a case which, in a petition for rehearing, Jalali stresses should allow her to keep at least $248,160 of the $310,000 on the theory that she had an “independent” quasi-contract action against Root. As of this writing, Orrick Herrington & Sutcliffe is not final. Given the possibility, however, that it will remain on the books, we take this opportunity to explain why the case does not support Jalali’s quasi-contract claim.
Essentially, Jalali cites Orrick Herrington & Sutcliffe for the proposition that where an attorney’s fee exceeds the value of his or her services (as would be the case when the attorney commits malpractice), the client can get at least a portion of the fee back on a quasi-contract claim. And regardless of whether the client has sustained any damages from the malpractice.
No. Orrick Herrington & Sutcliffe cannot be read for such a blanket, and untenable, proposition. Jalali’s reading of the case would put the courts in the business of rewriting attorney-client contracts any time a client was dissatisfied with the “value received,” even when malpractice had not been committed.
An actual reading of Orrick Herrington & Sutcliffe shows that the case stands for far less than Jalali would have us believe it does. The case arose in the context of alleged malpractice committed by an attorney handling the divorce of a very wealthy client. The attorney did not include certain terms in a property settlement agreement done in the wake of a two-day mediation session, thinking it was only a “‘term sheet.’” Unexpectedly, however, the family law court decided that the agreement was fully enforceable as written. (Orrick Herrington & Sutcliffe, supra, 107 Cal.App.4that p. 1055.) The client then spent large sums in an unsuccessful quest to undo the settlement. (Ibid.) It was that money -- the money spent on legal fees trying to undo the result in the underlying litigation -- that the client sought in his malpractice claim, as well as a contract claim. As in the case before us, the client was never able to show that he would have done better in the underlying case absent his first attorney’s malpractice.
After an unsuccessful summary judgment motion, the first attorney sought writ relief. Almost all of the opinion is devoted to demonstrating that because the client did not show he could have obtained a more favorable result in the
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underlying action, he had, absolutely, no tort claim for legal malpractice. (See Orrick Herrington & Sutcliffe, supra, 107 Cal.App.4that pp. 1057-1060.) Only at the end of its discussion, by way of briefly explaining why it was not having the entire case dismissed, the court, without elaboration save for one footnote, summarily stated that the client had produced “sufficient evidence to proceed with his contract claims.” (Id. at p. 1061.)
But that one footnote is important. It tells us the nature of the contract claims which the court was allowing to survive the summary judgment.
The footnote follows an otherwise unremarkable statement in the text to the effect that “overpayment for services is contract damages.” (Orrick, Herrington & Sutcliffe, supra, 107 Cal.App.4that p. 1060.) It is unremarkable because it is almost a self-evident proposition. If, for example, after your divorce is over you accidentally write a check to your lawyer (who you agreed to pay for on an hourly basis) for more than you actually owe, of course you have a claim for the balance if he or she refuses to return it to you. The footnote, however, goes on to indicate that what the court is talking about are “fees paid to a second attorney to correct the first attorney’s error.” (Id. at p. 1060, fn. 4.) That is -- to use the context of the facts in Orrick, Herrington & Sutcliffe themselves -- if your first divorce attorney bungles a settlement, the money you pay the second attorney to correct his error in the underlying case can be the basis for a quasi-contract claim for overpayment.
That is the most that can be wrung from Orrick Herrington & Sutcliffe. It hardly stands for the idea that you can substitute a contract claim for a malpractice tort claim if your tort claim is not viable. In fact, the case itself warns of the tendency to circumvent the need for actual malpractice damages just because the attorney was paid. (See Orrick Herrington & Sutcliffe, supra, 107 Cal.App.4that p. 1058.)
In the case before us now, Jalali has paid no fees to correct any “error” of Root’s. She did not, for example, to follow through with the parallel to Orrick Herrington & Sutcliffe, hire a new attorney to undo the settlement agreement so she could have a shot at obtaining more money—or, more tellingly—even just to have her moment of public vindication regardless of outcome. She didn’t hire tax lawyers to fight the IRS on the problem of the taxation of civil rights awards.
No, in substance, Jalali’s quasi-contract claim was merely a restatement of her tort malpractice claim. It was not independent of it -- in fact, as shown by the heavy reliance on the fraud theory to support it in her respondent’s brief, it was inextricably interwined with it. The amount of Root’s fee (which the jury thought should be reduced by $248,160) was only attacked because of
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Root’s malpractice, not because he kept more than the contingency fee contract allowed. Indeed, the jury itself treated it as a species of malpractice: When specifically asked whether it intended to award Jalali both the malpractice amount ($310,000) and the quasi-contract amount ($248,160), the jury said no—it was not a separate award.
Finally, we would note that Jalali’s “quasi-contract” claim for money had and received fails when considered under classic contract doctrine. The rule is that “until an express contract is avoided,” there cannot be an implied contract, which is “essential to an action on a common count.” (Lloyd v. Williams (1964) 227 Cal.App.2d 646, 649 [38 Cal.Rptr. 849].) If a “plaintiff cannot return the benefits conferred under the express contract the action for money had and received will not lie.” (Ibid.) Here, there is no way that Jalali could undo the express contingency fee agreement and give back the benefits she received. She hardly wants to return her share of the $2.75 million which Root obtained for her.
6. On page 13 of the slip opinion, in the second complete paragraph, after the words “bad tax advice” insert this materal:
as well as the $248,160 quasi-contract award for the same bad tax advice --
7. Because of the addition of substantive material regarding the validity of the jury’s award of $248,160 on a quasi-contract cause of action, we deem these modifications to be a change in judgment, thereby triggering the time for finality specified under Rule 24 of the California Rules of Court to begin to run anew as this date.
WE CONCUR:RYLAARSDAM, J., O’LEARY, J.