Opinion
A125152
March 3, 2010, Filed
Opinion by: Margulies
Following a settlement of her medical malpractice claims, the trial court granted a lien to plaintiff Veronica Noskevich's former attorneys in the amount of $ 23,061.77, to be paid out of the settlement proceeds. She appeals from the granting of the lien. Finding the trial court erred in determining that the former attorneys' motion to withdraw from the case was mandatory, we reverse the orders enforcing payment of the lien.
I. BACKGROUND
Noskevich, through her mother and guardian ad litem, Tatiana Parrish, filed a medical malpractice action against defendants Eden Medical Center (Eden) and Rahmat Salimi, M.D. Eden was dismissed from the action after Noskevich's first attorney, the McNulty Law Firm (McNulty) filed a statement of non-opposition to Eden's motion for summary judgment on December 8, 2005.
A. McNulty's Motions to Withdraw
On May 4, 2006, McNulty requested Noskevich to consult new counsel to represent her in the action and advised her that it would file a motion to withdraw from the case if she failed to find new counsel. Two weeks later, McNulty and Salimi's counsel stipulated to continue the first trial setting, which was then scheduled for June 9, 2006. The trial was reset for November 9, 2006. On October 13, 2006, Salimi requested a continuance of the trial date, to which McNulty stipulated. Trial was rescheduled for December 15, 2006.
Three weeks before the third trial setting, McNulty made his first motion to withdraw as counsel for Noskevich, accompanied by a motion to continue the trial date. McNulty alleged a "serious breakdown" in its attorney-client relationship with Noskevich. On November 30, 2006, McNulty dropped the motion to withdraw, citing a "repair" of the attorney-client relationship. McNulty moved to continue the upcoming trial, but that motion was denied. During the first two weeks of December, McNulty, Salimi, and Parrish engaged in a series of communications to settle the case. At one point, Parrish agreed to a $ 75,000 overall settlement, provided that her daughter would receive at least $ 55,000, free and clear of any attorney fees, costs, or medical liens. However, no settlement on these terms was ultimately reached.
On December 8, McNulty again moved to withdraw as counsel, citing a breakdown in the attorney-client relationship, and moved concurrently for a continuance of the trial. The motion to withdraw was supported by a declaration of McNulty attorney Brett Rosenthal, filed under seal. According to Rosenthal's declaration, McNulty had advised Parrish, based on its longstanding evaluation of the value of the case and likelihood of success at trial, that a "tremendous result" for plaintiff would be in the range of $ 50,000 to $ 100,000. The declaration stated: "We explained to Ms. Parrish that [a decision not to accept an offer to settle in that range] would be an unreasonable decision, that it would be contrary to Veronica's best interests, that she failed to understand the great risk in trying the case, that we were very concerned about the amount of costs that we were advancing in a case that had limited value in our estimation . . . ." The Rosenthal declaration went on to describe the settlement negotiations that occurred during the first week of December, including McNulty's negotiations with Parrish over the amount of its fees and costs. According to Rosenthal, Parrish turned down a $ 75,000 settlement offer under which Noskevich would have received a net recovery of $ 54,000 excluding any potential liens, and McNulty's fees would have been reduced to 10.6 percent of the settlement. Rosenthal stated that Parrish and her Russian interpreter had threatened to sue McNulty. Without further elaboration, Rosenthal's declaration stated: "[T]he McNulty Law Firm fervently believes that it cannot trust Ms. Parrish due to her repeated lies, threats, and statements clearly indicating that she does not understand the gravity of the situation."
After settling with the defendant in 2008, Noskevich submitted a copy of the declaration, unsealed, in opposition to McNulty's lien claim.
Because the motion to withdraw was made too close to trial, the trial court denied it subject to a continuance of the trial. The trial court later granted a continuance.
On December 9, McNulty presented Parrish with a non-negotiable offer under which Noskevich would have received $ 50,000 net of McNulty's fees and costs, and told her that if she did not accept the offer by noon on December 11, the firm would not further communicate with her except to advise her of hearings until the court ruled on its motion to withdraw. In the e-mail conveying the offer, McNulty wrote to Parrish: "[T]his firm feels that the ethical dilemmas presented by our recent communications make it impossible for us to continue to represent you. We do not believe that your actions have been taken in the best interests of the minor, and we have grave concerns about having you testify in this action."
On December 10, Parrish contacted Salimi's firm directly and purported to accept his offer to settle the case for $ 75,000. Parrish faxed a letter to Rosenthal the same day accusing him of failing to communicate her acceptance of a proposed settlement distribution to Salimi in order to force her to give McNulty more money than the amount to which she and the firm already agreed. She informed Rosenthal that she had contacted the defendant to accept his settlement offer, and requested that McNulty send Noskevich's entire file to her. Parrish apparently believed that by reaching an agreement directly with the defendant, Noskevich would either receive the entire $ 75,000 or the court would resolve the dispute with McNulty over distribution of the proceeds in her favor. The day after Parrish notified Rosenthal that she was accepting the defendant's settlement offer, McNulty filed a notice of settlement and the trial court vacated the trial date.
Although Parrish changed her mind about accepting Salimi's offer, Salimi's attorneys moved to enforce a settlement agreement for $ 75,000, based on the communications that took place with Parrish in December. Parrish opposed the motion, and McNulty filed a statement of non-opposition purportedly on behalf of the minor, citing its inability to "rationally communicate" with Parrish as guardian ad litem. On May 1, 2007, Judge Winifred Smith denied the motion to enforce the settlement on the grounds that the parties were first required to obtain an order approving minor's compromise.
On May 5, 2007, Parrish wrote to Rosenthal forbidding McNulty from presenting any petitions seeking approval of a minor's compromise and reiterating her opposition to the $ 75,000 settlement. Parrish further stated: "Neither you nor McNulty Law Firm are authorized to file any petitions, documents or act in any manner on behalf of my daughter." Parrish informed Rosenthal that she would be "seeking State Bar's review of your conduct and will be seeking legal help in determining your liability for legal malpractice." On May 9, 2007, McNulty again moved to withdraw as counsel, citing Parrish's May 5 letter as evidence of an irreparable breakdown in its attorney-client relationship with Noskevich and Parrish. Parrish opposed the motion, claiming she had no animosity toward McNulty or its attorneys and asking that McNulty take her daughter's case to trial. She alleged that McNulty originally represented to her that the case was worth $ 600,000, but that after the lead attorney in the case left the firm in the summer of 2006, the firm stopped working on the case and began their efforts to withdraw, eventually telling her it was not a good business decision for the firm to continue representing Noskevich because they would have to do too much work for too little money. She stated that she had interviewed other attorneys but each of them wanted to do their own discovery and none wanted to pay McNulty on its lien.
In a reply brief, McNulty claimed without elaboration that Parrish had "filed declarations replete with misrepresentations to the Court about the facts that have transpired." McNulty stated: "This situation has placed the McNulty Law Firm into an untenable ethical dilemma if this Motion were denied as the McNulty Law Firm is wholly uncomfortable about having Ms. Parrish testify in this action and does not believe she will cooperate with respect to trial strategy and testimony." McNulty claimed in its reply papers that rule 3-700(B)(2) of the State Bar Rules of Professional Conduct authorized its mandatory withdrawal because its continued employment would result in violation of the Rules of Professional Conduct or the State Bar Act. McNulty represented that its withdrawal was not based on Parrish's refusal to accept a settlement offer, but because she had "repeatedly deceived her attorney and the Court and . . . made repeated threats to her attorney."
In an accompanying declaration, attorney Brett Rosenthal asserted that Parrish's statements in opposition to the motion to withdraw were "replete with blatant misrepresentations to the Court about the facts that led to the instant motion."
Judge Smith granted McNulty's motion to withdraw on June 11, 2007, finding that the attorney-client relationship had been irreparably damaged and that "[a]n attorney is not required to represent a client with whom he or she has an adversarial relationship." Judge Smith added: "Counsel makes a persuasive showing that Plaintiff's Guardian Ad Litem has taken inconsistent positions that have made it unreasonably difficult for counsel to continue to represent Plaintiff." Following Judge Smith's ruling, the court notified the parties that the case was to be reassigned for all purposes to Judge Cecilia Castellanos effective July 1, 2007.
B. Settlement of the Case
Noskevich was unrepresented until December 14, 2007, when new counsel substituted in. At that point, no retained expert depositions had been performed by either party. Noskevich had propounded one round of paper discovery, yielding unverified responses. One deposition of a treating physician had been performed, but no retained expert depositions had been taken by either side. New counsel propounded new discovery, moved to compel answers, retained new experts, performed eight depositions of retained and nonretained experts, and prepared the case for trial. A jury trial commenced on September 26, 2008. On September 29, 2008, the case settled for $ 180,000.
C. McNulty's Lien
McNulty filed and served a notice of lien on August 8, 2008. On November 7, 2008, Noskevich filed a petition for the trial court to approve the minor's compromise and settlement of the action. In the petition, Noskevich informed the court that McNulty had claimed a lien on the settlement and requested the court to strike the claim. McNulty opposed the petition to the extent that it sought to strike its lien. In its opposition papers, McNulty stated: "[T]he McNulty Law Firm withdrew as plaintiff's counsel for the sole reason that an irreparable breakdown occurred in the attorney-client relationship with the minor plaintiff's Guardian ad Litem, Ms. Tatiana Parrish." (Italics added.)
McNulty requested a quantum meruit fee of $ 9,375, equal to 12.5 percent of the first $ 75,000 recovered in the action, plus costs of $ 13,686.77. The firm argued that the original settlement offer of $ 75,000 greatly assisted Noskevich in obtaining the settlement she ultimately obtained and that it was McNulty's work and effort that produced the original offer. McNulty included an itemization of its costs, but did not furnish any itemization or description of the legal services it performed for Noskevich.
Judge Castellanos granted the lien, and ordered McNulty to be paid the requested amount of costs and fees out of the settlement. The court thereafter approved the settlement and ordered disbursement of the funds necessary to satisfy McNulty's lien without waiver of the right to appeal. Noskevich timely filed a notice of appeal from the judgment insofar as it ordered payment of McNulty's lien.
II. DISCUSSION
Noskevich contends the trial court's order granting McNulty a lien should be reversed because the trial court (1) lacked jurisdiction to make the order; and (2) if it did have jurisdiction, erred in determining that McNulty was entitled to a lien.
A. Jurisdiction
Noskevich calls our attention to a series of intermediate appellate court decisions reaching differing conclusions about whether a trial court that approves a minor's compromise of the action as required by Code of Civil Procedure section 372 has jurisdiction to determine in the same action the validity of a lien claimed by a former attorney for the minor against the minor's settlement.
Code of Civil Procedure section 372, subdivision (a) provides for the appointment of a guardian ad litem when a minor is a party to an action and specifies that "[t]he guardian or conservator of the estate or guardian ad litem . . . shall have power, with the approval of the court in which the action or proceeding is pending, to compromise the same . . . ." (Italics added.) Section 372 further provides that money to be paid out as a result of the settlement would be governed by Probate Code section 3600 et seq., which authorizes the court to order payment of reasonable expenses to nonparty claimants, including attorney fees: "The court making the order or giving the judgment referred to in Section 3600, as a part thereof, shall make a further order authorizing and directing that reasonable expenses, medical or otherwise and including reimbursement to a parent, guardian, or conservator, 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 minor . . . ." (Prob. Code, § 3601, subd. (a).)
Older cases held that the attorney may only enforce a lien against the minor's settlement by initiating a separate action on the lien. (See, e.g., Law Offices of Stanley J. Bell v. Shine, Browne & Diamond (1995) 36 Cal.App.4th 1011, 1020-1021 ( Bell).) A pair of Fourth Appellate District cases decided more recently-- Padilla v. McClellan (2001) 93 Cal.App.4th 1100, 1103-1106 ( Padilla) and Curtis v. Estate of Fagan (2000) 82 Cal.App.4th 270, 276-280 ( Curtis)--have rejected the separate action requirement in cases brought on behalf of minors, reasoning that Probate Code section 3601, subdivision (a) authorizes the court to determine the validity and amount of a former attorney's lien claim as part of the proceeding to approve the minor's compromise contemplated by Code of Civil Procedure section 372. In reliance on an earlier Fourth Appellate District case involving a chiropractor's claim for fees against a minor's settlement, Goldberg v. Superior Court (1994) 23 Cal.App.4th 1378, Bell had specifically rejected the argument that Probate Code section 3601 authorized the court to determine the reasonable value of a former attorney's services. ( Bell, at p. 1021.) Padilla and Curtis effectively rejected Goldberg. (Padilla, at pp. 1100-1105; Curtis, at pp. 273-277.)
Bell followed a series of earlier cases holding that while an attorney may file a notice of lien in his former client's main action, a separate action is required in order to establish the existence and amount of the lien and to enforce it, because the former attorney is not a party to the main action. (See Valenta v. Regents of University of California (1991) 231 Cal.App.3d 1465, 1470; Hansen v. Jacobsen (1986) 186 Cal.App.3d 350, 356; Bandy v. Mt. Diablo Unified Sch. Dist. (1976) 56 Cal.App.3d 230, 234; Hendricks v. Superior Court (1961) 197 Cal.App.2d 586, 588-589.)
Noskevich argues that Bell controls and the trial court in this case lacked jurisdiction to decide the validity or amount of McNulty's lien. In our view, the language of Probate Code section 3601 is broad enough to encompass a determination of how attorney fees should be divided between successive counsel for the minor, without the necessity for a separate action. In that regard, we find Padilla and Curtis persuasive, and conclude that Bell's reliance on Goldberg was misplaced. However, Noskevich's jurisdictional argument may also be rejected on the alternative ground that she is estopped by her own conduct from raising the issue on this appeal.
As Bell itself holds, the jurisdictional question at issue when the trial court in the main action determines a former attorney's lien claim is not subject-matter jurisdiction or jurisdiction of the person. ( Bell, supra, 36 Cal.App.4th at pp. 1021-1022.) The superior court is certainly competent to resolve an attorney-client fee dispute, and it has jurisdiction over all of the parties necessary to resolve the dispute. The term "jurisdiction" in this context refers simply to the court's power under applicable statutory or decisional law or court rules to take the action in question, not to its fundamental jurisdiction over the subject matter or the parties. ( Id. at p. 1022.) A court acts in excess of jurisdiction "'where, though the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no "jurisdiction" (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites.'" ( Ibid., quoting Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280 at p. 288.) In contrast to other types of jurisdictional defects, principles of waiver or estoppel may preclude a party from challenging actions in excess of a court's jurisdiction. ( Harnedy v. Whitty (2003) 110 Cal.App.4th 1333, 1345.)
Noskevich made no claim in the trial court that the court lacked jurisdiction to determine the validity or amount of McNulty's lien claim or that McNulty could not obtain such a determination without filing a separate action. In fact, it was Noskevich who brought the issue of the validity of McNulty's lien before the court by asking the court to strike the lien. Noskevich's counsel, Scott Peebles, argued extensively in his moving and reply papers, as well as at the hearing before Judge Castellanos, that the lien was invalid because McNulty had voluntarily withdrawn from the case. He even proposed that the trial court hold an evidentiary hearing in order to determine the lien's validity. At the hearing on Noskevich's petition for approval of the settlement, when the trial court raised the issue of jurisdiction sua sponte and advised the parties that it did have jurisdiction under Curtis, Peebles interposed no objection. In these circumstances, even assuming for the sake of analysis that Curtis was wrongly decided, Noskevich waived or is estopped from raising the issue of jurisdiction at this stage of the proceedings.
B. Merits of Trial Court's Ruling
Noskevich contends that the trial court erred in determining that McNulty's withdrawal from the case was mandatory rather than voluntary under the applicable law. We agree, and will reverse the order requiring payment of McNulty's claimed fees and costs.
1. Applicable Law
Generally, an attorney working on a contingency fee basis who withdraws from representing the client is not entitled to quantum meruit recovery for the value of his services unless the withdrawal was mandated by ethical rules. ( Estate of Falco (1987) 188 Cal.App.3d 1004, 1016 ( Falco); Rus, Miliband & Smith v. Conkle & Olesten (2003) 113 Cal.App.4th 656, 674-678 ( Rus).) In such cases, "the attorney has the burden of proof to show: (1) counsel's withdrawal was mandatory, not merely permissive, under statute or State Bar rules; (2) the overwhelming and primary motivation for counsel's withdrawal was the obligation to adhere to these ethical imperatives under statute or State Bar rules; (3) counsel commenced the action in good faith; (4) subsequent to counsel's withdrawal, the client obtained recovery; and (5) counsel has demonstrated that his work contributed in some measurable degree towards the client's ultimate recovery." ( Falco, at p. 1016, italics added, fns. omitted.)
Falco left open the possibility that quantum meruit fees could be awarded in permissive withdrawal cases, subject to a heightened level of scrutiny. ( Falco, supra, 188 Cal.App.3d at p. 1016, fn. 12.) However, Falco held that a client's failure to cooperate based on rejection of a good settlement offer, mutual animosity between the attorney and client, or a complete breakdown in the attorney-client relationship, did not come within this exception. (See Rus, supra, 113 Cal.App.4th at p. 674, citing Falco, at pp. 1010-1011.)
Mandatory and permissive withdrawal are addressed in subparagraphs (B) and (C) of rule 3-700 of the State Bar Rules of Professional Conduct in relevant part as follows: "(B) Mandatory Withdrawal. [P] A member representing a client before a tribunal shall withdraw from employment . . . if: [P] (1) The member knows or should know that the client is bringing an action [or] . . . asserting a position in litigation . . . without probable cause and for the purpose of harassing or maliciously injuring any person; or [P] (2) The member knows or should know that continued employment will result in violation of these rules or of the State Bar Act; or [P] (3) The member's mental or physical condition renders it unreasonably difficult to carry out the employment effectively. [P] (C) Permissive Withdrawal. [P] If rule 3-700(B) is not applicable, a member may not request permission to withdraw in matters pending before a tribunal . . . unless such request or such withdrawal is because: [P] (1) The client [P] . . . [P] (d) [engages in] conduct [that] renders it unreasonably difficult for the member to carry out the employment effectively, or [P] . . . [P] (2) The continued employment is likely to result in a violation of these rules or of the State Bar Act; or [P] . . . [P] (5) The client knowingly and freely assents to termination of the employment; or [P] (6) The member believes in good faith, in a proceeding pending before a tribunal, that the tribunal will find the existence of other good cause for withdrawal."
2. Trial Court Ruling
The trial court concluded that McNulty's withdrawal from the case was not voluntary on its part. The court gave particular emphasis to Parrish's letters of December 10, 2006 and May 5, 2007 in which Parrish asked for her file, told the McNulty firm to take no further actions on behalf of her daughter, implied the firm might be guilty of legal malpractice, and requested an itemized accounting of all costs incurred by the firm in its representation of her daughter. While acknowledging there were contradictory statements in the documents, the trial court construed these statements as a termination of the firm's services and an acknowledgement of liability for the firm's costs. The court stated: "I don't know what Judge Smith considered [in granting the motion to withdraw], but it certainly seems to me that based on this there is no question that the law firm could not ethically or on another basis continue to represent Ms. Parrish." It made a factual finding that McNulty did not abandon Noskevich but had an ethical obligation to withdraw given the circumstances that Parrish had threatened to pursue legal actions against them, had directed that they not file more papers, and requested that McNulty send her the files.
The court also noted that the May 5 letter included the following: "I request that you fulfill your obligations under the contract and take my daughter's case to trial or negotiate a settlement which will benefit my child."
3. Analysis
As an initial matter, we do not agree with the trial court's suggestion that Parrish may have effectively terminated McNulty's services or assumed liability for its costs. Parrish opposed McNulty's May 2007 motion to withdraw. Her May 5, 2007 letter to the firm stated clearly that she still expected the firm to fulfill its contractual obligation to take her daughter's case to trial or negotiate a beneficial settlement. Her request that McNulty not file further petitions or documents was obviously directed at efforts to obtain approval of settlement terms she had rejected. Although Parrish was admittedly attempting to retain new counsel for Noskevich, as anyone in her position would have done, she did not want to be unrepresented. We also reject the suggestion that by requesting a statement of the costs McNulty incurred Parrish was implicitly promising to pay them. She may well have sought that information because other firms she had contacted wanted to know the extent of McNulty's potential lien claim. In any event, we see no basis for construing the request as an admission of liability for anything, especially since Parrish cannot be imputed with knowledge of the circumstances in which McNulty might or might not have a valid lien for costs.
More fundamentally, we do not agree with the trial court that the evidence showed McNulty was under a mandatory, ethical duty to withdraw. As discussed above, there are three grounds for mandatory withdrawal under rule 3-700 of the Rules of Professional Conduct. McNulty mentioned none of these grounds in its moving papers supporting its motion to withdraw. It made no claim that Parrish was insisting on asserting a position in the litigation without probable cause for purposes of harassing or injuring defendant Salimi, made no claim that continued representation would violate the Rules of Professional Conduct or the State Bar Act, and made no claim that McNulty lacked the physical or mental capacity to carry out the employment effectively. The moving papers simply asserted there was an irreparable breakdown in the attorney-client relationship, which is grounds, at most, for permissive withdrawal under rule 3-700(C).
McNulty did not bring the issue of its alleged ethical duty to withdraw before the court until McNulty filed its reply brief in support of its motion to withdraw. This occurred after Parrish had cited the Falco case in her opposition papers. In its reply, McNulty expressly sought to distinguish Falco by claiming for the first time that continued employment would result in violation of the Rules of Professional Conduct or the State Bar Act. For a number of reasons in addition to its suspicious timing, McNulty's claim is not persuasive.
McNulty specified no Rule of Professional Conduct or provision of the State Bar Act that would have been violated by its continued representation of Parrish and Noskevich. McNulty merely asserted in vague and conclusory terms that it was uncomfortable about having Parrish testify, and feared she would not cooperate with respect to trial strategy and testimony, allegedly because she had lied to the firm and threatened it with malpractice litigation. McNulty made no allegation that Parrish was demanding an unethical trial strategy or insisting on giving false testimony. In fact, McNulty failed to specify what statements by Parrish were false, failed to establish that Parrish knew the statements were false, and failed to show how Parrish's statements, even if false, created an ethical conflict for McNulty.
Under Rus, supra, 113 Cal.App.4th 656, it was McNulty that carried the burden of proving its withdrawal was mandatory, not merely permissive, and that its "'overwhelming and primary motivation'" in withdrawing was the obligation to adhere to ethical imperatives under statute or State Bar rules. ( Id. at p. 674.) McNulty's bare assertion that it acted to avoid violation of its ethical duties is insufficient to meet that burden. Both in its motion to withdraw and in its papers opposing Parrish's motion to strike the lien, McNulty neither described the substance of the duties it feared violating nor established facts showing that its continued representation of Noskevich risked violating those duties. In fact, in its opposition to Noskevich's motion to strike the lien, McNulty admitted that it withdrew as plaintiff's counsel "for the sole reason that an irreparable breakdown occurred in the attorney-client relationship with minor plaintiff's Guardian ad Litem."
Further, there is considerable evidence that McNulty's primary motivation was economic. McNulty admitted that it told Parrish in November 2006--several months before it claimed an ethical obligation to withdraw--that the firm was "very concerned" about the amount of costs it was advancing in a case that had "limited value" as far as the firm was concerned. According to McNulty, this was part of "the same conversation that ha[d] been had many times before with Ms. Parrish dating back to February 2006." In fact, between February and December 2006, the firm did little or nothing to prepare the case for trial, but began to focus all of its effort on cutting its losses--getting the trial continued and pressuring Parrish to either settle the case quickly or find a new attorney. This led ultimately to an irreparable breakdown in the attorney-client relationship when Parrish could not find another attorney to take the case over and could not accept McNulty's low valuation of the case. While McNulty's motion to withdraw in these circumstances may have been wise and justifiable, it was not mandated by rule 3-700 of the Rules of Professional Conduct.
In our view, this is also not one of the exceptional permissive withdrawal cases in which quantum meruit fees may be warranted after "heightened scrutiny" by the court of the attorney's reasons for withdrawing. (See Falco, supra, 188 Cal.App.3d at p. 1016, fn. 12; Rus, supra, 113 Cal.App.4th at pp. 675-678.) Rus explained as follows why an attorney's reasons for withdrawing are subject to heightened scrutiny when withdrawal is not ethically mandated: "To allow an attorney under a contingency fee agreement to withdraw without compulsion and still seek fees from any future recovery is to shift the time, effort and risk of obtaining the recovery . . . from the attorney, who originally agreed to bear those particular costs in the first place, to the client. The withdrawing attorney gets a free ride as to many of the headaches of litigation which he or she otherwise would have had to endure . . . . It is a very tough row which a contingency fee attorney originally agrees to hoe. Thus it is unassailably unfair to allow him or her to escape that labor absent the most compelling of permissive reasons--reasons that, as Falco indicated, must pass heightened scrutiny." ( Id. at pp. 675-676, fn. omitted.)
In our view, McNulty's withdrawal in this case stemmed from a garden-variety conflict over the value of the case. McNulty was afraid it would never recover its economic costs if the case went to trial, while Parrish was determined to ensure that Noskevich obtained more than a nominal amount in settlement. Although there was some evidence that Parrish's indecision and mixed signals may have kept McNulty in the case for longer than was necessary, there is no evidence that this conduct forced McNulty to expend significant resources that accrued to Noskevich's ultimate benefit.
For these reasons, we hold that the trial court erred in allowing McNulty's lien for attorney fees and costs, and will reverse the order granting minor's compromise to the extent that it ordered the lien to be satisfied out of the proceeds of the settlement.
Because we have found McNulty's lien invalid, we do not reach Noskevich's alternative claim that the trial court improperly granted McNulty costs as part of the lien.
III. DISPOSITION
The "Order Regarding McNulty Law Firm's Lien" is reversed in full, and the "Order Approving Compromise of Pending Action" is reversed to the extent that it ordered disbursement of settlement proceeds to the McNulty firm. The matter is remanded to the trial court for further proceedings to ensure the return and proper distribution of the settlement funds previously disbursed to the McNulty firm, consistent with the views expressed in this opinion.
Margulies, Acting P.J.
We concur:
Dondero, J.
Banke, J.