Opinion
H041417
12-27-2017
RICHARD MALDONADO et al. Plaintiffs and Respondents, v. HAYLEY GIBLIN et al. Defendants; DUNNION LAW FIRM, Claimant 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-13-CV247114)
I. INTRODUCTION
The issue presented by this appeal is whether a wife needs evidence of agency in order to retain an attorney on behalf of her husband after he has been incapacitated in an accident, thereby giving the attorney a lien against anticipated damages for the husband's personal injuries.
Here a wife signed a legal services agreement on behalf of her husband, who had been seriously injured in a motor vehicle accident. After the wife discharged the attorney, she successfully resisted the attorney's assertion of a lien on the ground that she lacked authority to enter into the agreement. Relying on recent case law grounded on decisions dating back to a time when husbands had exclusive management and control of community property, the trial court found that, because there was no evidence of agency, the wife was not authorized to sign the agreement on her husband's behalf. Because the principle on which that case law is based has been outdated since 1975, when wives gained equal management and control of community property, we hold that the wife had the statutory authority to enter into the agreement for her husband. Accordingly, we will reverse the order denying the attorney's lien.
II. OVERVIEW
On January 4, 2013, a car driven by defendant Hayley Giblin and owned by her father, defendant James Giblin, struck plaintiff Richard Michael Maldonado, then age 44, as he was riding his bicycle. Richard suffered serious injuries, including a traumatic brain injury which resulted in an inability to speak. Later that month, on Richard's behalf, his wife, Annette, entered into an agreement for legal services with the Dunnion Law Firm APC (Dunnion). In March 2013, Annette agreed to retain Larry Rothstein to represent her and Richard and, through Rothstein, she discharged Dunnion.
We will refer to Richard Michael Maldonado as "Richard" and to his wife, Annette Maldonado, as "Annette" solely to avoid confusion over their common surname.
Rothstein filed this action in May 2013 on behalf of Richard and Annette, seeking damages for Richard's personal injuries and Annette's loss of consortium. Dunnion filed a notice of lien in the action for reasonable attorney fees and costs based on the agreement for legal services that Annette had signed on Richard's behalf.
Rothstein settled the claims of Richard and Annette against the Giblins for $1 million, the limits of two applicable insurance policies issued by the California State Automobile Association (CSAA). In February 2014, he sought judicial approval of the settlement.
Relying on Flores v. Evergreen At San Diego, LLC (2007) 148 Cal.App.4th 581 (Flores) and related cases, the trial court denied Dunnion's claims for a lien and for recovery in quantum meruit, concluding that there was no evidence of agency that would have authorized Annette to sign the agreement for Dunnion's legal services on Richard's behalf. Dunnion therefore had no reasonable expectation of compensation. The trial court awarded Rothstein fees of $169,835.81 and costs of $20,042.37 out of Richard's recovery of $700,000.00.
As we will explain, the trial court understandably relied on recent appellate opinions holding that the marital relationship does not automatically establish agency. Those opinions followed precedent developed when husbands had exclusive management and control of community property. However, those opinions did not consider the significance of major statutory changes in 1975 which conferred the management and control of community property equally on husbands and wives.
Because we hold here that each spouse is a statutory agent of the other spouse for the purpose of entering a contract for legal services to recover for a spouse's personal injuries during the marriage, we will reverse the order denying Dunnion's lien. We will also determine that a trial court cannot, over objection, decide a contested claim for attorney fees in a probate proceeding based only on affidavits and declarations.
III. THE FACTS
Because the trial court's denial of Dunnion's lien rested on its determination that there was no valid contract between Dunnion and the plaintiffs, our summary of the procedural history will focus more on the evidence of contract formation than on the evidence of the legal services that Dunnion and Rothstein claim to have provided.
A. RETENTION OF THE DUNNION FIRM AND INITIAL SERVICES RENDERED
According to a declaration by Annette, after Richard was injured on January 4, 2013, her brother-in-law told her he had found a lawyer and put her in contact with an investigator from The Dunnion Law Firm. Annette met with the investigator at the Santa Clara Valley Medical Center on January 17, 2013. At the investigator's invitation, she signed a written agreement for legal services "arising out of" the January 4, 2013 incident. The agreement identified the client as "Annette Maldonado on Behalf of Richard Maldonado." Annette also signed an authorization on Richard's behalf to release medical records to Dunnion.
The retainer agreement contained the following relevant provisions. In paragraph 3, "Client" agreed, as compensation for Dunnion's services, to pay 39 percent "of any and all total amounts received by compromise, if the case is settled without mediation or the filing of a lawsuit" or 45 percent of "all total amounts received after the filing of a lawsuit or demand for arbitration or mediation. [¶] 4. In the event that the services of [Dunnion] herein are terminated prior to the settlement, arbitration, or adjudication of this matter, [Dunnion] shall be compensated for attorney services at the rate of $485.00 per hour, plus all costs incurred, with case analyst time billable at the rate of $150.00 per hour plus all costs incurred, both hourly rates having a minimum billable time increments of .33 hours per activity. Client agrees that the 'quantum meruit' or the reasonable value of services of attorneys shall be calculated at time of settlement or judgment of this claim at either: (a) the hourly rates as stated above; or (b) a reasonable percentage of the total ATTORNEY'S fees, plus costs, upon settlement, if no settlement offer has been tendered to attorney; or (c) the percentage, the percentage as agreed to in paragraph 3 above, of the last offer of settlement to client; or the greater of either (a), (b), or (c) at the option of [Dunnion]. . . . [¶] . . . [¶] 8. [Dunnion is] hereby given a first priority lien upon the proceeds of any recovery, whether by settlement or judgment, for professional fees stated in Paragraph 4 together with all costs incurred or paid out in connection with the prosecution of Client's claim. . . . [¶] . . . [¶] 22. In the event Client is married, Client's spouse may have a claim for damages resulting from the spouse's loss of marital rights such as the care, comfort, society and affection of client as a result of client's personal injury. The lawyer refers to this type of claim as one for 'loss of consortium.' . . . [Dunnion] will accept the representation of said spouse and/or loved ones relative to such claim(s) only upon consultation with said spouse and/or loved ones and upon the signing of a separate written 'Agreement for Legal Services' by both said spouse and/or loved ones and [Dunnion]. Absent such an agreement, [Dunnion] shall have no responsibility for prosecuting such claim(s) and Client agrees to indemnify and hold [Dunnion] harmless for failing to make such claim(s)."
Annette declared that Dunnion did not mention to her the availability of a loss of consortium claim. Annette did not believe she had authorized Dunnion to negotiate to settle Richard's claims.
According to a declaration by Sargis G. Atanous, he was the attorney at Dunnion who represented Richard after receiving the agreement signed by Annette. He obtained and reviewed the traffic collision report and nearly 1000 pages of Richard's medical bills and records, conducted DMV searches on the car's driver and owner, and contacted the Giblins' insurer, CSAA. Atanous discovered that a second CSAA excess policy was also applicable.
On February 22, 2013, Atanous sent a letter to a senior CSAA adjuster he knew, Robert Pereira, identifying himself as Richard's attorney, listing two claim numbers as the subject, and stating in part: "I value the case at $10,000,000.00. Please review the enclosed documents and make me an offer to resolve the matter within seven (7) days." CSAA did not respond within the seven days, and Atanous extended the deadline to March 6. On March 5, 2013, CSAA offered its policy limits, which it mistakenly believed were $600,000. By that time, however, Annette was represented by her current attorney, Larry Rothstein.
B. RETENTION OF ROTHSTEIN, DISCHARGE OF DUNNION, AND FURTHER SERVICES
According to Annette's declaration, in her last telephone conversation with Atanous he told her he was trying to ascertain the insurance policy limits. She decided to discharge Dunnion primarily due to a concern about its high fees, so she met with Larry Rothstein on Saturday, March 2, 2013.
On March 3, Annette entered into a contingency fee agreement with Rothstein that listed "Richard + Annette Maldonado" as the client. She signed her own name as a client and also signed for Richard as a client "by Annette Maldonado." Under Rothstein's retainer agreement, client agreed to pay Rothstein one-third of any gross recovery for client's injuries on January 4, 2013 before the filing of either court papers or a demand for arbitration and 40 percent thereafter. Annette also signed a document authorizing the release of the records of a disabled adult as Richard's guardian ad litem.
The appellate appendices contain no judicial appointment of Annette as Richard's guardian ad litem as provided in Code of Civil Procedure section 373. And Annette's declaration states, "The fact is that I have never been appointed as having my husband's Power of Attorney, nor as his Guardian, nor as Conservator of his Estate, although I was later appointed as Co-Conservator of his Person."
On Sunday, March 3, 2013, Rothstein faxed Atanous a message stating in part: "We now represent your clients Richard Maldonado and Annette Maldonado in regard to Richard's injury accident of 1/4/2013, Annette's related claims, and all matters concerning their contractual relations with your firm. Your cooperation in the transition of counsel will be greatly appreciated." The subject of the message was "Your Former Clients/Our Clients: Richard and Annette Maldonado."
According to Atanous, his assistant was out on March 4, so he did not receive Rothstein's fax until March 5. On March 5, CSAA litigation specialist Karen Light- Auther called Atanous and tendered $600,000, the assumed total policy limits of $500,000 on the primary policy and $100,000 on the excess policy. Atanous sent a confirming letter to Light-Auther the same day, asking for various documents. The letter noted, "Due to Mr. Maldonado's condition, we will need to petition the court for approval of the settlement."
Light-Auther faxed Atanous a letter the same day confirming these offers, $500,000 on claim number 01-1KR9378 and $100,000 on claim number 08-T336037, and asking for the release to include a potential wrongful death claim, a conservatorship or power of attorney on behalf of Richard due to his incapacity, and Annette's loss of consortium claim. Also on March 5, Atanous called Annette to advise her of the CSAA offers of settlement and to ascertain the role of Rothstein, but he was unable to reach her or to leave a message. He left a message with her brother-in-law asking Annette to contact him.
On March 6, 2013, Rothstein notified CSAA adjuster Robert Pereira and Light-Auther advising them that he was substituting in as attorney for the Maldonados and asking Pereira to cease contact with Dunnion. He asked Light-Auther for the Giblins' income and asset information and said he would be discussing CSAA's settlement offer with Annette. Light-Auther faxed a letter advising Rothstein that CSAA had extended the known policy limits to Dunnion the day before, but that it had subsequently discovered the applicable policy limits for the Giblins had been incorrectly stated in the offer to Dunnion. After acknowledging a telephone conversation with Rothstein, Light-Auther extended to him a settlement offer of the actual policy limits, which totaled $1 million. CSAA stated that the release would include Annette's loss of consortium claim and a conservatorship power of attorney on behalf of Richard due to his incapacity.
On March 12, Light-Auther wrote to Atanous, confirming Dunnion's settlement offer but advising Atanous that CSAA could not "adhere to your request for settlement in this matter due to your client's subsequent representation by Larry J. Rothstein. . . ."
On March 14, 2013, Rothstein faxed Atanous a letter from Annette which stated, "As you have been advised by Mr. Rothstein, he was retained on March 2, 2013, to replace you in this matter, and to deal with your firm, and you personally, on my behalf, and on behalf of my husband Richard Maldonado." She instructed Atanous to stop working on her file and to stop contacting her, her family members, and CSAA. She signed the letter "ANNETTE MALDONADO, For My Self, and for My Husband RICHARD MALDONADO."
On March 15, 2013, Atanous sent Light-Auther a letter, with a copy to Rothstein, acknowledging that Dunnion was no longer representing plaintiffs and asserting Dunnion's claim of a lien on any insurance settlement.
C. LEGAL PROCEEDINGS
On March 28, 2013 in a separate conservatorship action (Santa Clara County Superior Court Case No. 1-13-PR-172257), Richard's son, Richard Jaime Maldonado, and Annette jointly petitioned for appointment of them as conservators for Richard. On April 9, 2013, the court appointed them temporary co-conservators of Richard's person.
Dunnion's appellate appendix has included the dockets of this case and also Santa Clara County Superior Court Case No. 1-13-PR-172257. This court has taken judicial notice of the Superior Court's public record docket entries. (Evid. Code, § 452, subd. (d); Truong v. Nguyen (2007) 156 Cal.App.4th 865, 872, fn. 3; Tabarrejo v. Superior Court (2014) 232 Cal.App.4th 849, 855, fn. 2.)
On May 28, 2013, Richard's son entered into a contingency fee agreement with Rothstein as Richard's "Guardian Ad Litem." The terms of the agreement differed from the original in part by conditioning attorney fees on court approval and limiting the percentage of fees to one-third of the gross recovery from the Giblins. The agreement also ratified the legal work already done by Rothstein. Two days later, Rothstein filed the complaint in this action, stating a claim for personal injuries on Richard's behalf and a separate claim for loss of consortium on Annette's behalf. On June 12, the superior court appointed Richard's son as his guardian ad litem due to Richard's severe traumatic brain injury. Subsequently, Annette and Richard's son were confirmed in the separate conservatorship proceeding as co-conservators of Richard's person.
On July 12, 2013, Dunnion filed a notice of lien in this action, claiming reasonable attorney fees and costs.
On February 10, 2014, Rothstein filed a petition seeking the court's approval of a compromise based on CSAA's paying Richard $700,000.00 and Annette $300,000.00. Rothstein requested fees equal to 25 percent of the remainder of Richard's $700,000 after subtracting costs, which he identified as $20,042.37. In a declaration supporting the petition, Rothstein argued that Dunnion, before being discharged on March 3, 2013, had merely sent 11 letters and received four letters and faxes, while Rothstein had spent 510.5 hours on the case, including successful negotiations with Richard's self-insured employer, PG & E, to waive its claim for reimbursement of more than $1.4 million in medical payments. In a memorandum supporting the petition, Rothstein argued that Dunnion had never had a contract with Richard because Annette had no authority to act on his behalf. Rothstein also argued that the competing claims for attorney fees should be resolved by motion rather than a separate action.
Dunnion filed a request for an award of fees and costs on February 25, 2014, and a supplemental request on March 7. Dunnion asked for fees of $150,000 representing 25 percent of the $600,000 offer that CSAA made on March 5, 2013, plus costs of $614.36. Atanous declared that he had personally spent at least 30 hours on the case and his assistant spent five hours. Dunnion asserted its entitlement to an evidentiary hearing on its claim for a lien for attorney fees, stating that it was necessary to depose Adjuster Light-Auther, as she had been prevented by CSAA's attorney from signing a declaration in this case. Attached was an unsigned declaration from Light-Auther.
Plaintiffs assert that Dunnion also requested fees in the amount of $195,599.76. This is inaccurate. That total was intended to include both Dunnion's request for fees and costs of $150,614.36, plus what it calculated to be $44,985.42 due Rothstein, which included $19,985.42 in costs.
The superior court took under submission Dunnion's claim for a contractual lien or quantum meruit recovery. On April 18, 2013, it denied Dunnion's request for an evidentiary hearing and approved the proposed insurance settlement.
On May 30, 2014, the court denied Dunnion's claim for attorney fees and costs, reasoning in part, "Dunnion failed to prove the existence of a direct contractual relationship with Richard. Richard did not sign the subject retainer agreement, and there is no evidence showing that the signatory - Richard's wife - was authorized to execute the agreement on Richard's behalf and bind him thereto. (See Pagarigan v. Libby Car Center (2002) 99 Cal.App.4th 298 (Pagarigan); Flores v. Evergreen at San Diego, LLC[, supra,] 148 Cal.App.4th 581; Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160.) . . . Dunnion, therefore, does not have a valid attorney's lien against Richard's settlement funds." The court also rejected Dunnion's reliance on the principle of quantum meruit: "[T]he claimant must show that services were rendered at the request of the person to be charged. (Strong v. Beydoun (2008) 166 Cal.App.4th 1398, 1404.) There is no evidence in this case of Richard, or any person legally authorized to act on his behalf, requesting services from Dunnion. As such, Dunnion cannot recover fees and costs from Richard under a quantum meruit theory." The court awarded Rothstein attorney fees of $169,835.81 and costs of $20,042.37. Dunnion filed a timely notice of appeal from that May 30, 2014 order.
Some post-appeal proceedings are relevant. By orders dated September 16 and October 22, 2014, over Dunnion's objection, the court granted two petitions by Rothstein to release to Richard first $10,000.00 and then $500,121.82, the remainder of the funds in Rothstein's trust account. Attached to the first petition were declarations by two doctors that Richard was no longer mentally incapacitated. In the conservatorship action, the court ordered the conservatorship of Richard's person terminated on October 21, 2014.
IV. SCOPE OF REVIEW AND FORFEITURE
On appeal, Dunnion relies on Family Code sections 780, 1100, subdivision (a), and 1103, as well as Probate Code sections 3012, 3051, 3071, and 3101, in asserting, "The foregoing provisions of the Family and Probate Codes make it clear that a conservatorship or guardianship is not a prerequisite to the approval of a transaction entered into by a person on behalf of a disabled spouse. That person has a duty to protect her spouse and the community property irrespective of whether legal proceedings have been implemented to formalize her representative function." Plaintiffs respond that this argument is unavailable on appeal as Dunnion did not make it in the trial court.
In Resolution Trust Corp. v. Winslow (1992) 9 Cal.App.4th 1799 at page 1809, this court reiterated, " 'Although ordinarily a party may not deprive his opponent of an opportunity to meet an issue in the trial court by changing his theory on appeal, this rule does not apply when, as in this case, the facts are not disputed and the party merely raises a new question of law.' (Burdette v. Rollefson Construction Co. (1959) 52 Cal.2d 720, 725-726; accord Hale v. Morgan (1978) 22 Cal.3d 388, 394.)"
In this case the trial court determined, based on existing case law, that Annette lacked authority as Richard's wife to sign an agreement on Richard's behalf and that Dunnion therefore did not have a valid lien against any damages for Richard's injuries. Whether Annette was Richard's agent by virtue of their spousal relationship depends entirely on our construction of the relevant statutes as well as the undisputed facts that Richard was incapacitated and that Annette signed an agreement with Dunnion "on Behalf of" Richard. (AA 301) Questions of statutory interpretation are always considered de novo on appeal. (In re Marriage of Davis (2015) 61 Cal.4th 846, 851; Burroughs v. Precision Airmotive Corp. (2000) 78 Cal.App.4th 681, 688.)
Dunnion also asserts that the trial court should have conducted an evidentiary hearing regarding Dunnion's attorney fee claim. Plaintiffs point out that Dunnion did not appeal from the court's order denying its request for an evidentiary hearing. While an order precluding a party from presenting any evidence of the party's only claim might amount to an appealable final determination of that claim (Burton v. Santa Barbara Nat. Bank (1966) 247 Cal.App.2d 427, 432), a less drastic ruling that simply limits a party's evidentiary showing by sustaining an objection to offered evidence is not appealable. (Jacquemart v. Jacquemart (1956) 142 Cal.App.2d 794, 795; cf. Oak Grove School Dist. of Santa Clara County v. City Title Ins. Co. (1963) 217 Cal.App.2d 678, 709; Hamilton v. Carpenter (1942) 52 Cal.App.2d 449, 450.) As Dunnion observes, evidentiary rulings at a hearing are ordinarily not separately appealable, but are subject to review on appeal from the resulting appealable judgment or order. (Code Civ. Proc., § 906.)
V. A WIFE'S AUTHORITY TO ENTER A CONTRACT FOR HER HUSBAND
In its ruling the superior court relied on decisions rejecting a spouse's claim of agency status. Determining the applicability of those decisions to this case requires a review of the evolution of a wife's authority to enter contracts.
A. THE LAW BEFORE 1975
To understand the importance of statutory changes effective in 1975, it is helpful to identify four principles of California law established well before 1975.
First, before 1975 husbands were recognized by statute as having the exclusive right to manage and control the community personal property. (Former Civ. Code, §§ 168, 171c; Spreckels v. Spreckels (1897) 116 Cal. 339, 340-341; General Ins. Co. of America v. Schian (1967) 248 Cal.App.2d 555, 557 (Schian); In re Marriage of Pendleton and Fireman (2000) 24 Cal.4th 39, 51.) As the "agent of the community," the husband had the "power to divest the parties of their community property by his own act in the same manner that he might divest himself of his separate property, so long as he did not make a gift of the former without consideration." (Grolemund v. Cafferata (1941) 17 Cal.2d 679, 684; former Civ. Code, §§ 161a, 172; Schian, supra, at p. 557.) The husband also had management and control over the community real property, but after a 1917 statutory amendment, his wife's consent was needed to lease, sell, convey, or encumber community real property. (Former Civ. Code, § 172a; Stewart v. Stewart (1926) 199 Cal. 318, 339; In re Risse (1957) 156 Cal.App.2d 412, 418.)
Second, after 1874 a wife was authorized by statute to subject her own separate property to debts she contracted after marriage, but not the community property unless the husband executed a pledge or mortgage securing the wife's debt by the community property. (Former Civ. Code, § 167; Marlow v. Barlew (1879) 53 Cal. 456, 459; Greiner v. Greiner (1881) 58 Cal. 115, 119; Steinberger v. Young (1917) 175 Cal. 81, 87; Meyer v. Thomas (1940) 37 Cal.App.2d 720, 725; Schian, supra, at p. 557.)
California's original Civil Code provided that " '[a] wife cannot make a contract for the payment of money.' " (Butler v. Baber (1880) 54 Cal. 178, 178; In re Marriage of Pendleton and Fireman, supra, 24 Cal.4th 39, 51.)
Third, under this statutory scheme courts concluded that no presumption arose from the marital relationship alone that the husband, as agent of the community, was authorized to manage his wife's separate property. Courts required some evidence of agency before a husband could dispose of his wife's separate property. (Wagoner v. Silva (1903) 139 Cal. 559, 563 (Wagoner); cf. Williams v. Tam (1900) 131 Cal. 64, 67 (Williams).) Because a wife was not inherently the community's agent, courts likewise required evidence of her agency to make her contracts binding on her husband or the community property. (Hulsman v. Ireland (1928) 205 Cal. 345, 349.)
Fourth, in the absence of a contrary agreement between spouses, a "cause of action for personal injuries suffered by either spouse during marriage, to whatever extent such cause of action may constitute property [citation] as well as any recovery therefor, constitutes community property . . . ." (Zaragosa v. Craven (1949) 33 Cal.2d 315, 320-321 (Zaragosa).) Amendments to former Code of Civil Procedure section 370 in 1913 and 1920 authorizing a wife to sue for her own personal injuries without joining her husband in the action did not alter the community property nature of this chose in action. (Zaragosa, supra, at pp. 319-320.)
The Zaragosa decision remained good law until 1957, when statutory changes classified damages recovered due to a spouse's personal injuries as the injured spouse's separate property. The legislative intent was to avoid imputation of one spouse's contributory negligence to the other. Due to unintended and unfortunate consequences of this change, such damages were generally reclassified as community property by 1968 statutory changes with exceptions for amounts received after separation or dissolution. (Hand v. Superior Court (1982) 134 Cal.App.3d 436, 439-440; 8 Cal. Law Revision Com. Rep. (1967) pp. 1397-1398.)
The right to recover money by judicial proceeding is deemed a "thing in action" by Civil Code section 953. At the court's request, the parties submitted supplemental briefs on the hypothetical distinction between a chose in action and entitlement to damages from such claim, and the consequence of such distinction for a spouse's authority to engage counsel to represent the injured party. The parties' thorough, articulate responses do not alter our conclusion in this case.
B. THE STATUTORY SCHEME SINCE 1975
1. The Family Code
Dramatic statutory changes to a wife's authority to make a contract affecting community property took effect in 1975. Those amendments of former Civil Code sections have been essentially incorporated into the Family Code that was enacted effective in 1994, which "drew together a number of statutes scattered throughout various parts of the California codes, and enacted some new provisions." (In re Marriage of Fellows (2006) 39 Cal.4th 179, 186.)
One major change was that wives gained an equal interest in the management and control of community property. "[T]he Legislature repealed the declaration that 'The husband is the head of the family" (former [Civ. Code] § 5101); it provided that 'either spouse' rather than 'the husband' has the management and control of both the community personal property ([former Civ. Code] § 5125, subd. (a)) and the community real property ([former Civ. Code] § 5127); and throughout the Family Law Act it gave the wife the same property rights as the husband by use of the sex-neutral designation of 'spouse' [citations]." (In re Marriage of Schiffman (1980) 28 Cal.3d 640, 643.)
Family Code section 1100 states in part: "(a) Except as provided in subdivisions (b), (c), and (d) and Sections 761 and 1103, either spouse has the management and control of the community personal property, whether acquired prior to or on or after January 1, 1975, with like absolute power of disposition, other than testamentary, as the spouse has of the separate estate of the spouse." (Fam. Code, § 1100.) "Section 1100 continues former Civil Code Section 5125 without change" other than adjusted section references. (23 Cal. Law Revision Com. Rep. (1993) p. 175.)
A related statutory change authorized either spouse to make a contract binding on the community property. Family Code section 910 states in part: "(a) Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt." Family Code section 902 defines " 'Debt' " as "an obligation incurred by a married person before or during marriage, whether based on contract, tort, or otherwise," and Family Code section 903 states that "(a) [i]n the case of a contract," a debt is " 'incurred' " "at the time the contract is made."
The 1975 amendment of former Civil Code section 5116 expressly stated that community property was "liable for the contracts of either spouse which are made after marriage." (Stats. 1974, ch. 1206, § 2, p. 2609.) The language now found in Family Code section 910, subdivision (a), was intended to preserve the effect of that amendment. (18 Cal. Law Revision Com. Rep. (1986) p. 56.) Since 1976, Code of Civil Procedure section 370 has stated, "A married person may be sued without his or her spouse being joined as a party, and may sue without his or her spouse being joined as a party in all actions." (Stats. 1975, ch. 1241, § 2, p. 3187.)
Family Code section 780 has essentially codified what Zaragosa, supra, 33 Cal.2d 315 determined to be the community property nature of the right to recover money for personal injuries suffered during marriage by a married person. This provision states, "Except as provided in Section 781 and subject to the rules of allocation set forth in Section 2603, money and other property received or to be received by a married person in satisfaction of a judgment for damages for personal injuries, or pursuant to an agreement for the settlement or compromise of a claim for such damages, is community property if the cause of action for the damages arose during the marriage." (Italics added; Cf. 23 Cal. Law Revision Com. Rep. (1993) p. 154.)
The allocation rules in Family Code section 2603 provide the method for assigning " '[c]ommunity estate personal injury damages' " when dividing community property upon dissolution. (In re Marriage of Devlin (1982) 138 Cal.App.3d 804, 807 [" 'Community property personal injury damages' are thus a species unique to the Family Law Act; they are held as community property during marriage, but upon dissolution such damages are subject to special assignment rules."].)
With respect to an incapacitated spouse, Family Code section 1103, subdivision (a), adverts to the Probate Code, providing, "[T]he procedure for management and control . . . of the community property" when one spouse "either has a conservator of the estate or lacks legal capacity to manage and control community property . . . is that prescribed in Part 6 (commencing with Section 3000) of Division 4 of the Probate Code."
2. The Probate Code
Probate Code section 3012 provides that "(b) [a] spouse lacks legal capacity to: [¶] (1) Manage and control, including legal capacity to dispose of, community property if the spouse is substantially unable to manage or control the community property. [¶] (2) Join in or consent to a transaction involving community property if the spouse does not have legal capacity for the particular transaction measured by principles of law otherwise applicable to the particular transaction." In general, however, one spouse's "lack or alleged lack of legal capacity" does not affect the other spouse's right "to manage and control community property" "[s]ubject to [Probate Code] [s]ection 3071." (Prob. Code, § 3051, subd. (a).) This is true even if the other spouse has a conservator. (Prob. Code, § 3051, subd. (b).) "Subdivisions (a) and (b) [of section 3051] make clear that the lack of legal capacity of one spouse does not affect the right of the spouse having legal capacity to manage and control community property or to dispose of the property, whether or not the other spouse has a conservator." (20 Cal. Law Revision Com. Rep. (1990) pp. 1343-1344.)
Probate Code section 3051, subdivision (a) states, "Subject to Section 3071, the right of a spouse to manage and control community property, including the right to dispose of community property, is not affected by the lack or alleged lack of legal capacity of the other spouse."
Probate Code section 3071 describes how to satisfy a requirement of joinder or consent for any "transaction for which the joinder or consent of both spouses is required by Section 1100 or 1102 of the Family Code or by any other statute . . . ." (Prob. Code, § 3071, subd. (a).) Family Code section 1102 requires joint action and consent of both spouses with regard to disposition of community real property by sale, conveyance, encumbrance, or lease for a longer period than one year, and Family Code section 1100 requires joint action and consent for certain community personal property transactions such as gifts of personal property and disposition of furniture and furnishings. (20 Cal. Law Revision Com. Rep. (1990) p. 254.)
C. RECENT DECISIONS
1. Decisions Requiring Spouses to Produce Evidence of Agency
With this statutory authority in mind, we will analyze the two key decisions on which the trial court relied in finding that Dunnion produced no evidence that Annette was authorized to execute the agreement with Dunnion on behalf of Richard. Each of these cases — Flores, supra, 148 Cal.App.4th 581 and Goldman v. SunBridge Healthcare, LLC (2013) 220 Cal.App.4th 1160 (Goldman) — involved the effectiveness of arbitration agreements executed by a family member on behalf of a patient of a care facility.
In Flores, supra, 148 Cal.App.4th 581, which plaintiffs claim is "directly on point," a nursing facility sought to enforce an arbitration agreement signed by a husband as the " 'Legal Rep/Responsible Party/Agent' " of his wife, who had dementia when she was admitted to the facility. (Id. at p. 585.) The appellate court upheld the trial court's denial of the petition to compel arbitration on three grounds.
First, there was no evidence that the husband was actually the wife's agent when he signed the arbitration agreement. "At the time he signed these documents, Luis did not have a power of attorney to act for Josephina, nor had he been declared her conservator or guardian." (Flores, supra, 148 Cal.App.4th at p. 585.) "[T]here was no written instrument conferring agency power on Luis." (Id. at p. 587.) There was no evidence that the wife expressly or implicitly consented "to have her husband act as her agent." (Id. at p. 589.)
Flores, supra, 148 Cal.App.4th at page 588, relied on Pagarigan v. Libby Care Center, Inc., supra, 99 Cal.App.4th 298 to support its conclusion that there was no evidence that the wife had authorized her husband to sign an arbitration agreement for her. The trial court in this case also relied on Pagarigan, but as Dunnion points out, Pagarigan is readily distinguishable as not involving a spousal relationship. That appellate court upheld a denial of a motion to compel arbitration in the absence of "any evidence this comatose and mentally incompetent woman did anything [that] caused them to believe either of her [adult] daughters was authorized to act as her agent in any capacity." (Id. at p. 302.)
We note that this court followed Pagarigan in Young v. Horizon West, Inc. (2013) 220 Cal.App.4th 1122, which presented the issue whether a mother's advanced health care directive authorized her daughter to sign a binding arbitration agreement with a nursing facility. (Id. at p. 1127.) We concluded that the directive did not apply by its terms. (Id. at pp. 1128-1129.)
Second, in rejecting a contention by the nursing facility that "Luis's status as Josephina's spouse was sufficient to confer agency status on him" based "on the fiduciary and support duties owed between spouses, including the duty to provide medical care[] ([s]ee Fam. Code, § 4300 [general duty to support spouse]; [citation])," the appellate court held: "Although we agree that spouses are fiduciaries and owe a duty of support in the family law context, these duties do not create a power to contractually bind each other in the agency context. '[I]t is well established that an agency cannot be implied from the marriage relation alone.' (Lovetro v. Steers [(1965)] 234 Cal. App. 2d [461,] 475 [(Lovetro)]; see Russell v. Dopp (1995) 36 Cal.App.4th 765, 783; Avedissian v. Manukian (1983) 141 Cal. App. 3d 379, 385.)" (Flores, supra, 148 Cal.App.4th at p. 589.) "Here . . . Evergreen presented no evidence of agency apart from the marital relationship." (Ibid.)
The third ground analyzed in Flores was "a detailed and comprehensive statutory scheme governing nursing homes" in the Health and Safety Code. (Flores, supra, 148 Cal.App.4th at p. 590; fn. omitted.) The court concluded that, while "[i]t is likely the Legislature . . . intended to allow next of kin to sign a nursing home contract for the limited purpose of admitting a mentally incompetent relative to the facility, even if the family member did not technically qualify as an agent, legal representative or responsible party," "it has failed to specify that next of kin have authority to agree to arbitration." (Flores, at pp. 593-594.)
Goldman, supra, 220 Cal.App.4th 1160 involved unsuccessful attempts by two nursing facilities to compel arbitration. Unlike Flores, the patient husband "was lucid and mentally capable at the time of his admission to" each facility. (Goldman, supra, at p. 1170.) This mental alertness rendered inoperative an advance care directive that authorized his wife to make health care decisions for him when he was incapable of doing so. (Ibid.) His wife had signed one arbitration agreement as his " 'Legal Representative' " and the other as the " 'Responsible Party.' " (Id. at pp. 1174-1175.) Goldman quoted Flores at length (id. at pp. 1171-1172) in rejecting the argument that "Judy's mere status as Edward's wife gave her authority to sign the arbitration agreements on his behalf . . . ." (Id. at p. 1171.) Citing Flores, supra, 148 Cal.App.4th 581 and Russell v. Dopp, supra, 36 Cal.App.4th 765, the court stated, "[T]he status of marriage cannot substitute for the act of conferring agency to a spouse." (Goldman, at p. 1172.) Like Flores, the court further concluded that there was no evidence of the wife's actual agency. (Id. at p. 1173.)
We believe that Flores and Goldman did not sufficiently consider the impact of the 1975 statutory changes on the status of wives with respect to community property. We do not otherwise question their results, as each decision also relied on the statutory scheme regulating nursing homes, a scheme that apparently limits the kind of care facility admission documents one spouse can sign on behalf of the other spouse.
In rejecting a contention that the spousal relationship alone authorized a wife to sign arbitration agreements on behalf of her husband, Goldman, supra, 220 Cal.App.4th 1160 relied almost exclusively on Flores, supra, 148 Cal.App.4th 581. Flores, in turn, relied primarily on Lovetro, supra, 234 Cal.App.2d 461 and secondarily on Russell v. Dopp, supra, 36 Cal.App.4th 765 (Russell) and Avedissian v. Manukian, supra, 141 Cal.App. 3d 379 (Avedissian). As the 1965 Lovetro decision appears to be the linchpin of these more recent decisions, we will consider it next.
The more recent decisions on which Flores relied do not merit extended discussion. Avedissian, supra, 141 Cal.App.3d 379, 385, and Russell, supra, 36 Cal.App.4th 765, 783, each involved routine quotations and citations of Lovetro that did not reconsider its continuing validity in light of the subsequent evolution of community property law.
Russell did involve the hiring of a purported attorney who represented a wife as a defendant in a civil action, but the imposter was hired by a third party, neither the wife nor her husband. The plaintiff sought to impute to the wife the husband's knowledge that the man was not an attorney, but there was no evidence he was aware of that. (Russell, supra, 36 Cal.App.4th. at p. 783.) Lovetro was one of four grounds in Russell for not charging the wife with knowledge the man was an imposter.
In Lovetro, supra, 234 Cal.App.2d 461 a wife, Joan, challenged a trial court ruling upholding a release signed by her since-deceased husband, Sam, relieving borrowers of liability for a promissory note payable to the husband and wife. (Id. at pp. 465-466.) The appellate court stated, "the trial court was entitled to find that Sam[, as the manager of the community personal property,] had the right without Joan's express authority or consent to enter into the release and agreement in partial extinguishment of the note . . . ." (Id. at pp. 473-474.) The appellate court quoted with approval a statement by the trial court, " 'The position of the husband, in whom the management and control of the entire community estate is vested by statute, [statutory citations] has been frequently analogized to that of a partner, agent, or fiduciary. [Citations.]' (Italics added; [citations]." (Id. at p. 473.) In other words, the husband was the wife's statutory agent.
The appellate court also concluded that there was sufficient evidence that Joan had actually authorized Sam to execute the release on her behalf, though stating that this finding "was unnecessary to the trial court's decision." (Lovetro, supra, 234 Cal.App.2d at p. 474.) In the course of its lengthy analysis of evidence of actual agency between husband and wife, the court stated, "[I]t is well established that an agency cannot be implied from the marriage relation alone. [Citations.] However, it is also true that much less evidence is required to establish a principal and agent relationship between husband and wife than between nonspouses. [Citations.]" (Lovetro, supra, 234 Cal.App.2d at p. 475.)
The proof of agency requirements applied in Lovetro derived from the 1900 decision in Williams, supra, 131 Cal. 64 and the 1903 decision in Wagoner v. Silva (1903) 139 Cal. 559, both of which were decided at a time when husbands had exclusive management and control of the community property and wives were precluded by statute from entering into contracts binding the community property. It was appropriate for Lovetro to rely on Williams and Wagoner in 1965, as California's statutory law had remained essentially the same. But as we have explained above, the statutory law has since changed dramatically regarding the management and control of community property and a wife's authority to make contracts affecting community property. The Flores and Goldman courts relied on Lovetro without acknowledging the significance of those statutory changes and their relevance to the facts presented.
2. Decisions Construing the Current Statutes
We have noted above several decisions identifying the husband as the community's agent under the former statutory scheme. Because management and control of the community estate has vested equally in wives since 1975, wives must be equally regarded as statutory agents of the community estate, subject to the same restrictions requiring joint actions to dispose of community real property (Fam. Code, § 1102). We have not found a decision that so holds, nor have we found a decision that discusses the interplay of Family Code sections 780, 910, 1100, and 1103 with Probate Code sections 3051 and 3071. Yet some decisions have yielded useful examinations of individual statutes.
The California Supreme Court discussed Family Code section 910 in Lezine v. Security Pacific Financial (1996) 14 Cal.4th 56 (Lezine): "We consider first the applicable rules governing the liability of community property for debts incurred during the marriage (such as the loan obligation incurred by [husband] owing to Security Pacific). In general, '[e]xcept as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.' (Fam. Code, § 910, subd. (a).) Thus, the liability of community property is not limited to debts incurred for the benefit of the community, but extends to debts incurred by one spouse alone exclusively for his or her own personal benefit." (Id. at pp. 63-64.)
In In re Marriage of Stitt (1983) 147 Cal.App.3d 579, one of the issues on appeal was whether the community was responsible in that dissolution for attorney fees the wife had incurred while married in defending civil and criminal actions charging her with embezzlement from her employer, Zingo's. The appellate court stated: "Wife argues the attorney fees incurred during the marriage for her defense in the Zingo's case should be regarded as a community debt and that payment should therefore be taken from the community property as a whole, rather than from her share of the community property. Ordinarily, if a married person employs an attorney, the contractual obligation to the attorney would be the responsibility of both spouses. The community property is liable for contracts made by either spouse after marriage under [former Civil Code ]section 5116." (Id. at pp. 586-587.)
The husband conceded that the community was liable for the attorney fees, but contended that as between parties to a dissolution, the court could allocate the obligation solely to the separate property of the spouse responsible for the obligation. (In re Marriage of Stitt, supra, 147 Cal.App.3d at p. 587.) The appellate court agreed. (Id. at p. 588.)
In Farag v. ArvinMeritor, Inc. (2012) 205 Cal.App.4th 372 (Farag) the court relied on Family Code section 780 in concluding that "a [Code of Civil Procedure] section 998 offer may be made jointly to spouses because, under California's community property law, a cause of action for personal injury damages is community property (Fam. Code, § 780) and under Family Code section 1100, subdivision (a), either spouse has the power to accept the offer on behalf of the community." (Farag, at p. 374.) "[T]he Farags' causes of action—Nasseem's cause of action for personal injury and Sanna's cause of action for loss of consortium—arose during the marriage and constituted community property. (Fam. Code, § 780; [citation]." (Id. at p. 382; cf. Barnett v. First Nat. Ins. Co. of America (2010) 184 Cal.App.4th 1454, 1460.)
As we have explained, under the current statutes, Richard's undisputed lack of legal capacity did not affect Annette's right to manage and control community property under Probate Code section 3051, subdivision (a). Included in community property subject to her management and control is money "to be received" pursuant to a settlement or compromise of a claim for personal injuries suffered by a married person during the marriage. (Fam. Code, § 780.) It is inconsistent with these statutes to continue to require proof of actual agency in addition to statutory agency before a spouse can effectively retain an attorney on behalf of an incapacitated spouse. If plaintiffs' view is correct, then Annette had no more authority to retain Rothstein on March 3, 2013 than she did to retain Dunnion on January 17, 2013. In March she signed a document as Richard's guardian ad litem, but she later admitted in a declaration that she was never appointed his guardian or conservator of his estate, just of his person. We note that his son was appointed his guardian ad litem 13 days after the son signed a contingency fee agreement with Rothstein as Richard's guardian ad litem and 11 days after this lawsuit was filed. We see no evidence that a conservator of Richard's estate was ever appointed in the conservatorship action.
We recognize that "a person who lacks legal capacity to make decisions" cannot appear in a court action unless represented by a guardian ad litem, guardian, or conservator of the estate. (Code Civ. Proc., § 372, subd. (a)(1).) The statute does not, however, appear to require the appointment of a guardian or conservator before a spouse may retain an attorney to represent an incapacitated spouse when no action has been filed. On the other hand, Probate Code section 3101, subdivision (a)(1), cited by Dunnion—which authorizes a proceeding to obtain judicial approval of a proposed transaction if "[o]ne of the spouses is alleged to lack legal capacity for the proposed transaction, whether or not that spouse has a conservator"—appears to be permissive, not mandatory. We agree with plaintiffs that this statute does not deputize one spouse as the other's agent.
We conclude that the ancient rule that agency cannot be presumed from the mere existence of a spousal relationship did not survive unmodified the 1975 statutory changes creating equal rights in both spouses to manage and control community property and to enter into contracts binding the community. In that role each spouse is the statutory agent of the other absent circumstances that restrict authority to enter into a contract. Considering this statutory agency and a spouse's "community property" stake in "money . . . to be received" as damages "for personal injuries" suffered by the other spouse "during the marriage," (Fam. Code, § 780), we conclude that Annette was authorized to retain an attorney to represent her incapacitated spouse, Richard, without producing additional evidence of agency, thereby establishing a basis for the attorney's lien.
In concluding that Dunnion has a lien based on the agreement Annette signed, we express no view on the amount that Dunnion may be entitled to recover. The trial court is free to consider the value, if any, provided by Dunnion's brief representation, during which it apparently sought to settle the entire matter without asserting a loss of consortium claim on behalf of Annette or making any effort to have Richard's self-insured employer waive its $1.4 million claims for reimbursement of medical payments.
VI. NECESSITY OF AN EVIDENTIARY HEARING
Dunnion further contends that the court should have held an evidentiary hearing on the allocation of fees and costs between Dunnion and Rothstein. For the guidance of the court in further proceedings, we will review the procedure involved in judicial recognition of an attorney's lien when a party seeks to compromise an action involving an incapacitated adult.
In Cetenko v. United California Bank (1982) 30 Cal.3d 528 (Cetenko), the California Supreme Court explained: "Section 2881 of the Civil Code declares that a lien may be created by contract, and section 2883 provides that an agreement may provide for a lien to be created as security for property to be acquired in the future. . . . [¶] A lien in favor of an attorney upon the proceeds of a prospective judgment in favor of his client for legal services rendered has been recognized in numerous cases. Such a lien may be created either by express contract . . . [citations], or it may be implied if the retainer agreement between the lawyer and client indicates that the former is to look to the judgment for payment of his fee [citations]." (Id. at p. 531; cf. Brown v. Superior Court (2004) 116 Cal.App.4th 320, 327.)
Waltrip v. Kimberlin (2008) 164 Cal.App.4th 517 elaborated at page 525: "An attorney's contractual lien is created and takes effect when the fee agreement is executed. (Cetenko, supra, 30 Cal.3d at p. 534; Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1175 [Carroll].) A contractual lien for attorney fees is a secret lien; no notice is required before it is effective against a judgment creditor who levies on the judgment. (Cetenko, supra, at p. 533; Carroll v. Interstate Brands Corp., supra, at p. 1172; [citation].)" While no notice is required to perfect an attorney's contractual lien, case law has approved of the practice of attorneys filing notice of their liens in pending actions. (Hansen v. Jacobsen (1986) 186 Cal.App.3d 350, 357-358, and cases there cited.)
Attorneys are not usually allowed to enforce liens in the client's action to recover damages. "[B]ecause the attorney is not a party to the underlying action and has no right to intervene, the trial court acts in excess of its jurisdiction when it purports to determine whether the attorney is entitled to foreclose a lien on the judgment. [Citations.] . . . After the client obtains a judgment, the 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. [Citations.]" (Carroll, supra, 99 Cal.App.4th 1168, 1173.)
Courts have recognized an exception to this separate action requirement, however, when, as here, a court is asked to approve a settlement entered by a guardian or conservator. When a court "approves a compromise of a pending action or proceeding to which a . . . person with a disability is a party" (Prob. Code, § 3600, subd. (a)(2)), or when "[t]he compromise . . . provides for the payment or delivery of money . . . for the benefit of the . . . person with a disability" (id. at subd. (b)) the court, as part of approving the compromise, "shall make a further order authorizing and directing that reasonable . . . costs, and attorney's fees, as the court shall approve and allow therein, shall be paid from the money or other property to be paid or delivered for the benefit of the . . . person with a disability." (Prob. Code, § 3601, subd. (a).) " '[P]erson with a disability' " includes "[a] person for whom a conservator may be appointed." (Prob. Code, § 3603, subd. (a).)
Because a court is obligated under the Probate Code to approve the attorney fees component of a compromise of an action involving an incapacitated adult, the court is authorized to resolve any competing claims for attorney fees, including an attorney's lien claim, without a separate action. (Curtis v. Fagan (2000) 82 Cal.App.4th 270, 279; Padilla v. McClellan (2001) 93 Cal.App.4th 1100, 1105-1106 (Padilla); contra, Goldberg v. Superior Court (1994) 23 Cal.App.4th 1378, 1383 ; Law Offices of Stanley J. Bell v. Shine, Browne & Diamond (1995) 36 Cal.App.4th 1011, 1021.) Plaintiffs properly invoked Padilla in asking the trial court to resolve Dunnion's lien claim in this action instead of requiring a separate action.
In approving the evidentiary hearing procedure employed by the trial court in Padilla, the appellate court observed that "courts determine the reasonableness of attorney fees every day by ruling on motions. (See Code Civ. Proc., § 1033.5, subd. (c)(5).) In those hearings, the court has before it evidence in the form of declarations only, not live testimony, and detailed billing records are not required to support an award. [Citation.] These hearings are usually short, not lasting an entire day as was the case here. Trial courts are afforded wide discretion to determine the amount of attorney fees within that framework." (Padilla, supra, 93 Cal.App.4th at pp. 1106-1107.)
In making this observation, Padilla overlooked a rule peculiar to proceedings under the Probate Code. "It has long been the rule that in probate matters 'affidavits may not be used in evidence unless permitted by statute. [Citation.]' (Estate of Fraysher (1956) 47 Cal.2d 131, 135.) Consequently, 'when challenged in a lower court, affidavits and verified petitions may not be considered as evidence at a contested probate hearing. [Citations.]' (Evangelho v. Presoto (1998) 67 Cal.App.4th 615, 620; see also Estate of Duncan (1969) 1 Cal.App.3d 212, 215 ['This was a contested hearing' and '[i]n the absence of a stipulation, each allegation of the verified petitions and the facts in the affidavit filed in support . . . had to be established by competent evidence'].) [¶] Under [Probate Code] section 1000, 'Except to the extent that this code provides applicable rules, the rules of practice applicable to civil actions . . . apply to, and constitute the rules of practice in, proceedings under this code.' In addition, 'All issues of fact joined in probate proceedings shall be tried in conformity with the rules of practice in civil actions.' (Ibid.) While it is true [that] Code of Civil Procedure section 2009 generally permits the use of affidavits in hearings on motions in civil litigation, the Probate Code limits the use of affidavits to 'uncontested proceeding[s].' (Prob. Code, § 1022.)" (Estate of Bennett (2008) 163 Cal.App.4th 1303, 1308-1309.)
Probate Code section 1022 states, "An affidavit or verified petition shall be received as evidence when offered in an uncontested proceeding under this code."
Thus, in resolving competing claims for attorney fees contingent on compromising an action on behalf of a person represented by a guardian as authorized by the Probate Code, a court may proceed without an evidentiary hearing when the parties so stipulate, but otherwise the court may not, over objection, rely on affidavits or declarations to determine contested matters.
Dunnion relies on Estate of Bennett, supra, 163 Cal.App.4th 1303, while plaintiffs seek to distinguish that case as involving "a probate proceeding, not an attorney fee determination." But in this case plaintiffs did initiate "a probate proceeding" by petitioning for approval of the proposed compromise of Richard's action under Probate Code sections 3600 and 3601. We see no reason why attorney fee claims heard pursuant to the probate statutes should be an exception to the application of Estate of Bennett and Probate Code section 1022.
Plaintiffs' petition for approval of a compromise was on a preprinted Judicial Council of California form MC-350 as revised January 1, 2011. Printed on the form was this admonition: "Except as noted below, you must use this form to request court approval of . . . (2) the compromise of a pending action or proceeding in which a minor or a person with a disability (including a conservatee) is a party . . . . (See Code Civ. Proc., § 372; Prob. Code, § 3600 et seq.)"
Plaintiffs also suggest that rule 7.952(b) of the California Rules of Court confers discretion on courts to take testimony when considering whether to approve the compromise of a claim by a minor or person with a disability. We agree that courts have discretion to decline testimony so long as the compromise petition is uncontested or the parties so stipulate.
Plaintiffs similarly invoke Probate Rule 20C of the Santa Clara County Superior Court, which states: "Attorney fee disputes will generally be resolved on the pleadings and declarations." "A trial court is without authority to adopt local rules or procedures that conflict with statutes or with rules of court adopted by the Judicial Council, or that are inconsistent with the Constitution or case law." (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1351.) Probate Code section 1022, of course, supersedes this local rule of court to the extent that they are inconsistent, but we believe the rule may be partly reconciled with the statute. The parties may stipulate to the probate court's resolution of an attorney fee dispute on the pleadings and declarations, or they could stipulate to proceed by way of offers of proof in lieu of testimony. But otherwise, the dispute is governed by the statute.
Because we are reversing the order denying Dunnion's lien claim for other reasons, we need not determine whether there was error or prejudice in the trial court's denial of Dunnion's request for an evidentiary hearing. However, on remand, if disputed issues arise concerning what legal services were rendered or the value of those services, absent stipulation of the parties the trial court will have to obey the dictates of Probate Code section 1022 and the cases that interpret it.
VII. DISPOSITION
The order denying Dunnion's assertion of an attorney's lien is reversed, and the trial court is directed to conduct further proceedings consistent with this opinion.
/s/_________
ELIA, Acting P. J. WE CONCUR: /s/_________
PREMO, J. /s/_________
MIHARA, J.