Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC337088, Tricia Ann Bigelow, Judge.
Law Office of David M. Brandon and David M. Brandon for Defendants and Appellants.
Mink Law Firm and Lyle R. Mink for Plaintiffs and Respondents.
MANELLA, J.
INTRODUCTION
Defendants, Chaim Shefi, Nitza Shefi and Ron Hacker, appeal from a judgment for the reasonable value of legal services provided by respondent, attorney Lyle R. Mink. Respondent had sued on two theories, one in quantum meruit and a second cause of action in fraud, alleging a false promise to pay for the services. Appellants make five assignments of error: (1) the trial court erroneously refused to issue a statement of decision or, in the alternative, the oral statement of decision was insufficient; (2) there was no substantial evidence of promissory fraud; (3) the court erred in not finding an express agreement to pay no more than $50 per hour; (4) the award of the reasonable value of services amounted to reformation of the parties’ express agreement; and, (5) respondent’s recovery should have been barred under a theory of unclean hands. We find no merit in appellants’ contentions and affirm the judgment.
The parties refer to respondents, plural, although respondents are attorney Lyle Mink and his professional corporation. We shall refer to respondent in the singular.
BACKGROUND
The matter was tried to the court without a jury. Respondent testified that he had been licensed to practice law in 1972, after graduating from Loyola Law School, where he had been on the school’s law review and had been a teaching fellow. He testified that he had clerked on the California Court of Appeal and the California Supreme Court, and had worked as an associate with two law firms, before opening his own business-litigation practice in 1976. By 2005, respondent’s usual hourly rate was $375, although he knew attorneys who were charging $450.
In 2005, respondent met Ron Hacker, who offered to retain respondent to handle an unlawful detainer (UD) action that had already been filed. Hacker held a power of attorney from his aunt and uncle, appellants Chaim and Nitza Shefi, who had purchased a house at a foreclosure sale. The power of attorney gave Hacker authority to evict the occupants of the house and to retain an attorney. The house was worth nearly one million dollars, and Hacker wanted the occupants out quickly, so that appellants could sell the house before the market declined.
We summarize respondent’s testimony and other testimony in the light most favorable to respondent, disregarding any contrary showing, resolving all conflicts in respondent’s favor and accepting the trial court’s resolution of any issues of credibility. (Campbell v. Southern Pacific Co. (1978) 22 Cal.3d 51, 60.)
The UD complaint had already been filed by part-time in-house counsel, James E. Powell, who had handled simple evictions for Hacker at hourly rates of $25 to $35. Powell had used a standard discovery package, and none of the cases he had filed involved taking depositions, filing motions or responding to motions. Powell had never handled a UD action through trial.
Respondent and Hacker also discussed other work respondent might do for Hacker. Hacker told respondent that he managed or owned several businesses, and had many ongoing real estate cases in litigation. Hacker told respondent he regularly employed numerous attorneys and paralegals, paying them $25-$50 per hour, or $5,000 to $6,000 per month. Respondent replied that he would not be able to work for so little money, and that his normal hourly rate was $375.
Respondent agreed to take the case, although he and Hacker had not reached an agreement as to the amount of respondent’s fee. Respondent agreed to accept what Hacker thought was reasonable. Respondent told Hacker he thought $375 was a reasonable rate, but that he was willing to discuss the issue again, in order to agree on a specific amount. As respondent had already rejected figures of $50, $60 and $70 per hour, he thought Hacker understood that he would not except so little. Respondent thought that because Hacker was experienced employing and managing lawyers, he would agree that something in the neighborhood of $375 was reasonable, especially once Hacker saw his work and was satisfied. The parties did not have a written agreement.
When respondent substituted into the UD case on March 29, 2005, he found the defendant’s attorney to be “very difficult.” Opposing counsel brought motions to reclassify and transfer the case, an ex parte application to advance the motions and a motion for judgment on the pleadings. Respondent prepared oppositions to the motions. At Hacker’s request, respondent served written discovery requests, scheduled depositions and brought motions to compel. Respondent eventually took the defendant’s deposition. Respondent met with Hacker or spoke to him on the phone at least twice a week. In May 2005, respondent sent Hacker a bill for April, but it was not paid.
Trial of the UD case took place in May 2005, two months after respondent had substituted into the case, and respondent obtained a judgment in appellants’ favor for possession and approximately $20,000 in back rent. Hacker was “ecstatic.” He called someone on his cell phone, saying, “We won this case, we really kicked their butt,” and more.
At the time of the UD trial, there was still no agreement regarding respondent’s fees, and Hacker had paid nothing to respondent. Once the judgment was signed, respondent substituted out. Respondent then prepared a final bill, which he sent to Hacker June 1, 2005. It included time worked on another case for appellants, as well as some miscellaneous matters for Hacker, but the bulk of the time was attributable to the UD case. Respondent’s time entries for matters totaled 128.2 hours, which he billed at a rate of $375 per hour, for a total bill of $48,000. Hacker never objected to the number of hours or the amount, never said he thought the $375 hourly rate was unreasonable and never offered to pay a different amount. Appellants paid none of respondent’s fees and none of the costs.
At the trial of the instant case, Hacker admitted that he had failed to pay “a few” other attorneys with whom he had had fee disputes. He admitted that one employee filed a complaint with the labor board, alleging that Hacker had underpaid her because he claimed she was an independent contractor.
As the trial below lasted less than eight hours, the court orally pronounced its ruling and findings. The court found that the evidence supported two alternative findings: (1) that appellants had agreed to pay respondent what they deemed to be the reasonable value of his legal services; or (2) that the parties had reached no firm agreement regarding the amount to be paid for respondent’s services. The court concluded that in either event, because there was a meeting of the minds sufficient to create a contract for legal services, respondent was entitled to the reasonable value of the services rendered, which the court determined to be $20,000, consisting of 100 hours at $200 per hour.
The court also found that respondent had “presented evidence sufficient to show a false promise and also that [he] was entitled to quantum meruit relief as to the defendant, Ron Hacker,” but found the evidence insufficient to prove a false promise as to the other defendants. The court concluded that the defendants would be jointly and severally liable under the quantum meruit theory. Judgment was entered February 1, 2007, against all appellants jointly and severally, with no mention of a separate judgment against Hacker on the false promise cause of action. Appellants timely filed their notice of appeal.
DISCUSSION
1. Appellants’ Contentions
Appellants contend that the trial court erroneously refused their request for a statement of decision, or in the alternative, that the court’s oral remarks were an insufficient statement of decision. Appellants also contend that there was no substantial evidence of an intentionally false promise, precluding judgment under respondent’s theory of promissory fraud. They next contend that the evidence established an express oral contract, precluding an award of attorney fees in quasi-contract, and that the court’s determination of a reasonable fee amounted to reformation of the express contract. Finally, appellants contend that the doctrine of unclean hands should bar respondent from recovering the value of his services because he failed to obtain a written fee agreement as required by Business and Professions Code section 6148.
All further statutory references will be to the Business and Professions Code, unless otherwise noted.
2. The Trial Court’s Statement of Decision
Appellants first contend that the trial court refused to issue a statement of decision after their counsel requested one. Prior to testimony, the trial court noted that it had received a request for a statement of decision, and announced that should the trial last less than eight hours, the request would be denied. After closing argument, the court determined that the trial had lasted less than eight hours, and proceeded to give an extensive oral ruling. Appellants then repeated their request for a statement of decision. The court again denied the request.
Code of Civil Procedure section 632 provides that upon request, the trial court “shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial. . . .” However, “when the trial is concluded within one calendar day or in less than 8 hours over more than one day, the statement of decision may be made orally on the record in the presence of the parties.” (Ibid.)
Although the trial court refused appellants’ request for a statement of decision, it is apparent that the court refused only a written statement of decision. In denying the request, the court cited Code of Civil Procedure section 632, and then addressed the principal controverted issues, reciting the factual and legal basis for its decision as to each of them, as required by that statute. An otherwise adequate statement of decision does not cease to be a statement of decision merely because it is not labeled as such. (In re Rodrigo S. (1990) 225 Cal.App.3d 1179, 1183.) We conclude that the trial court’s remarks were an oral statement of decision.
The court stated that the evidence showed the parties agreed that respondent would provide legal services. The court then observed that whether the parties came to no agreement regarding the amount to be paid, or agreed that respondent would be paid what Hacker considered reasonable, the result was the same, viz., respondent was entitled to recover in quantum meruit. The court pointed out that as the agreement was not set forth in writing, the Business and Professions Code required appellants to pay the reasonable value of respondent’s services. The court also found that under ordinary contract principles requiring good faith, a promise to pay for whatever one party believes to be reasonable is construed as a promise to pay the reasonable value of the other party’s performance.
Section 6148, subdivision (a) requires all contracts for legal services to be in writing, signed by both attorney and client. Subdivision (c), provides: “Failure to comply with any provision of this section renders the agreement voidable at the option of the client, and the attorney shall, upon the agreement being voided, be entitled to collect a reasonable fee.”
In determining what was reasonable, the court considered evidence showing that respondent expected to do more work for Hacker, if Hacker was satisfied with his work on the UD case. Thus, respondent expected to be paid less than his hourly rate. The court considered respondent’s experience and the nature of the case -- complex for a UD case, but still just an eviction -- and determined that $200 per hour was a reasonable discounted fee under the circumstances. The court reduced the number of hours to 100 after finding that respondent’s timesheets were not sufficiently detailed in some respects, and too much time had been logged for the deposition.
Finally, the court found the evidence was sufficient to show a false promise by Hacker, justifying separate relief from him, but was insufficient to hold the remaining appellants liable for fraud. The court held that quantum meruit relief was recoverable from all appellants jointly and severally.
The judgment, submitted by respondent at the court’s request, contains no reference to the court’s finding of a false promise by Hacker, but refers merely to the joint and several liability of all appellants.
Anticipating that we would construe the court’s oral remarks as an oral statement of decision, appellants contend that the remarks “do not rise to the level of a statement of decision.” (Social Service Union v. County of Monterey (1989) 208 Cal.App.3d 676, 679.) Although appellants claim the court failed to explain the factual and legal basis for its decision as to each of the principal controverted issues, they do not summarize the remarks or explain in what manner they find them deficient. “[A]n appellate court [is not] required to consider alleged error where the appellant merely complains of it without pertinent argument.” (Berger v. Godden (1985) 163 Cal.App.3d 1113, 1119.)
Moreover, appellants were required to “draw any omissions or ambiguities therein to the attention of the trial court.” (Kinney v. Overton (2007) 153 Cal.App.4th 482, 488.) As they did not do so, appellants have forfeited all objections to the trial court’s factual findings, except a claim of no substantial evidence. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134; Code Civ. Proc., § 634.)
3. Hacker’s False Promise
Appellants contend there was no evidence that Hacker’s promise to pay was false when he made it. They note that to prove promissory fraud, respondent was required to prove that Hacker’s promise to pay respondent for his services was false when it was made, viz., that Hacker had no intention of paying respondent for his services. (See Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974.) Appellants argue that respondent’s proof was insufficient because respondent did not show that he had “made numerous efforts to obtain payment,” and because respondent billed appellants for an amount they considered unreasonable.
Appellants suggest that respondent was required to prove that he had demanded payment in an amount the defendant would have considered reasonable, and that he had made multiple efforts to obtain payment. As appellants have failed to provide citations to relevant authorities to support this novel theory of promissory fraud, we are not required to consider it. (Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545-546.)
Further, appellants have failed to summarize all the evidence, instead providing only a short argumentative summary of selected testimony -- much of it favorable to their position. “‘It is well established that a reviewing court starts with the presumption that the record contains evidence to sustain every finding of fact.’ [Citations.]” (Foreman & Clark Corp. v Fallon (1971) 3 Cal.3d 875, 881.) To meet their burden, appellants must “‘set forth in their brief all the material evidence on the point and not merely their own evidence. Unless this is done the error is deemed to be waived.’ [Citations.]” (Ibid, italics omitted.)
In any event, substantial evidence supports the trial court’s finding. Hacker agreed to pay respondent what he considered a reasonable fee. However, despite respondent’s two billing statements, Hacker paid nothing and offered nothing. Although nonperformance alone is insufficient to prove an intent not to perform an oral promise, the failure even to attempt performance may be a factor, along with other circumstances, from which fraudulent intent may be inferred. (Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30-31.) One such circumstance may be a second false promise after a failure to perform. (Id. at p. 30.) In May 2005, after respondent had sent Hacker the April statement, which remained unpaid, Hacker assured respondent that he would pay him for his work on the UD case, but failed to do so.
Another circumstance suggesting Hacker’s lack of intent to keep his promise was his admission that he had failed to pay other attorneys who had worked for him, and had underpaid another employee. We conclude that the trial court’s finding that Hacker’s promise to pay was made with fraudulent intent was sufficiently supported by the evidence.
4. Respondent’s Recovery in Quantum Meruit
Citing Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419-1420, appellants invoke the rule that there can be no recovery in quantum meruit when there is an express agreement to pay a fixed sum. Appellants contend that respondent agreed that appellants would have the sole discretion, under a subjective standard, to determine what was the reasonable value of respondent’s services. Thus, appellants conclude, they are entitled to the benefit of their bargain.
The trial court did not find that the parties had agreed to a fixed sum. The court found that the evidence supported either a finding that the parties had agreed that the parties’ agreement gave appellants the discretion to determine what fees were reasonable, or that the parties reached no agreement regarding the amount to be paid for respondent’s legal services. The court concluded that in either case, section 6148 compelled an award of the reasonable value of respondent’s services. The court did not err. Clients must pay the reasonable value of legal services performed under an oral agreement. (§ 6148, subds. (a), (c).)
Further, as respondent notes, it is long-settled law that where an attorney has given his client sole discretion to determine what is a reasonable fee, the client must pay the reasonable value of the attorney’s services. (Foster v. Young (1916) 172 Cal. 317, 324; Nave v. Taugher (1920) 49 Cal.App. 308, 311-312; see 1 Vapnek et al., Cal. Practice Guide: Professional Responsibility (The Rutter Group 2007) ¶ 5:635, p. 5-84.) In any contract that “leaves the amount thereof to the discretion of an interested party, the consideration must be so much money as the object of the contract is reasonably worth.” (Civ. Code, § 1611; see also Goldberg v. City of Santa Clara (1971) 21 Cal.App.3d 857, 861.) The court found that respondent’s services were reasonably worth $20,000. Thus, appellants did, in fact, receive the benefit of their bargain -- to the extent permitted by law.
5. Appellant’s Allegation of Reformation of the Contract
Appellants contend that respondent “entered into a valid contract to accept whatever Appellant Hacker deemed acceptable.” They argue that the trial court reformed the contract by determining what amount was reasonable. We disagree.
As there is a covenant of good faith and fair dealing implied in every contract, a party with discretionary power must exercise that power in good faith. (Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 371-372.) “A party violates the covenant if . . . its act or if its conduct is objectively unreasonable. [Citations.]” (Id. at p. 372.) Thus, as Hacker’s promise to pay an objectively reasonable amount was implied in the parties’ agreement, the trial court did not reform the agreement by determining a reasonable amount.
Nor did the trial court act arbitrarily in determining a reasonable hourly rate and number of hours to be compensated, as appellants’ claim without further argument. The court rejected appellants’ suggestion that $25 to $50 per hour was a reasonable fee for an attorney with 35 years’ experience. The court implied that appellants’ suggestion was not made in good faith, commenting that it could not “seriously, [with] a straight face, be contended that that is anywhere near reasonable . . . .” As the court then considered the nature and complexity of the case, as well as both parties’ expectations, and the condition of respondent’s time logs, the court properly exercised its discretion. (See Shannon v. Northern Counties Title Ins. Co. (1969) 270 Cal.App.2d 686, 689 [factors for determining reasonable fee].)
6. Appellants’ Allegation of Unclean Hands
Appellants contend that all compensation should be barred under the equitable defense of unclean hands, because respondent failed to obtain a written fee agreement. Appellants invoke section 6148, which requires attorneys to obtain a written fee agreement signed by both attorney and client. Appellants recognize that attorneys who fail to do so are entitled to collect a reasonable fee. (See § 6148, subd. (c).) However, they contend that respondent’s failure to execute a written fee agreement was such a breach of his ethical duties as to justify the forfeiture of any right to a reasonable fee.
Appellants seek a broad extension of the general rule that an attorney who acts with a conflict of interest may be denied his or her fees. (See Jeffry v. Pounds (1977) 67 Cal.App.3d 6, 9.) It is also the general rule that “forfeiture is not automatic but depends on the egregiousness of the violation. [Citation.]” (Mardirossian & Associates, Inc. v. Ersoff (2007) 153 Cal.App.4th 257, 278.) The failure to obtain a written agreement is not such a violation as to warrant forfeiture. (Pringle v. La Chapelle (1999) 73 Cal.App.4th 1000, 1005.) Indeed, the attorney who has failed to obtain a written agreement is entitled by statute to collect a reasonable fee for services rendered. (§ 6148, subd. (c).) The separation of powers doctrine prevents our rewriting the statute as appellants wish. (See Kopp v. Fair Pol. Practices Com. (1995) 11 Cal.4th 607, 660; Cal. Const., art. IV, § 1.)
Appellants rely upon two cases in which neither court ordered such a forfeiture. (See Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1, 15; Asbestos Claims Facility v. Berry & Berry (1990) 219 Cal.App.3d 9, 27, overruled on another point in Kowis v. Howard (1992) 3 Cal.4th 888, 896.) As the court in Cal Pak noted, forfeiture is ordered only “‘if [the attorney’s] relations with his client are tainted with fraud’” or unfairness, and even in such cases, an award of fees in quantum meruit may be justified where the client would be unjustly enriched by a recovery obtained due to the attorney’s services. (Cal Pak, supra, at p. 15; also id. at pp. 14-16.) Not only was there no evidence of a conflict of interest here, there is no suggestion of fraud or unfairness on respondent’s part. Further, due to respondent’s efforts, appellants obtained a judgment for possession and damages.
We conclude that the trial court properly rejected appellants’ unclean hands defense.
DISPOSITION
The judgment is affirmed. Respondent shall have costs on appeal.
We concur: EPSTEIN, P. J., SUZUKAWA, J.