Modtech Structures, LLC v. Monteleone & McCrory LLP ( 2013 )

FILED
NOT FOR PUBLICATION JAN 18 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
In Re:, No. 11-57789
MODTECH HOLDINGS, INC., D.C. No. 5:10-cv-00466-PSG
Debtor,
MEMORANDUM *
__________________,
MODTECH STRUCTURES, LLC,
Appellant,
v.
MONTELEONE & MCCRORY LLP,
Appellee.,
and
MODTECH HOLDINGS, INC.,
Interested Party.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Submitted January 8, 2013 **
Pasadena, California
Before: CANBY, REINHARDT, and WARDLAW, Circuit Judges.
Modtech Structures, LLC (MSL) appeals the district court’s order affirming
the bankruptcy court’s decision granting Monteleone & McCrory, LLP’s (M&M)
Motion for Summary Judgment and denying MSL’s Cross-Motion for Summary
Judgment. MSL argues that the bankruptcy court erred in concluding that the
amount Modtech Holdings, Inc. (Modtech) owed M&M in attorneys’ fees was
secured by a valid and enforceable attorney’s lien. We have jurisdiction pursuant
to 28 U.S.C. §§ 158(d) and 1291, and we affirm.
The bankruptcy court did not err when it determined that M&M provided
Modtech with sufficient disclosures under California Rule of Professional Conduct
3-300. Because the terms of the lien were fair, reasonable, and fully disclosed in
writing to Modtech in a manner which Modtech reasonably should have
understood; because M&M advised Modtech in writing that it could seek the
advice of independent counsel regarding the terms of the lien and that it would give
Modtech time to do so; and because Modtech consented in writing to the terms of
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
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the lien, the bankruptcy court correctly concluded that M&M provided Modtech
with sufficient disclosures under California Rule of Professional Conduct 3-300.
See Cal. Rule of Prof. Conduct 3-300; see also Fletcher v. Davis, 90 P.3d 1216,
1222 (Cal. 2004) (“Rule 3-300 does not bar attorneys from obtaining liens on
future recoveries. The rule merely requires the attorney who wishes to obtain such
a lien to explain the transaction fully, to offer fair and reasonable terms, to provide
a copy of the agreement, to give the client an opportunity to seek independent legal
advice, and to secure the client’s written consent.”). Beery v. State Bar of
California, 739 P.2d 1289 (Cal. 1987), does not impose any additional disclosure
requirements, as that case pertains only to an attorney's ethical obligations when
entering into independent business transactions with his client.
Nor was the bankruptcy court incorrect in its ruling that M&M was not
required to file a UCC financing statement with the California Secretary of State in
order to perfect its lien with respect to fees incurred for legal services unrelated to
achieving the recoveries in question. California law does not require recording of
attorney’s liens to render them enforceable, regardless of whether the fees incurred
were for legal services related to the recoveries in question. Cetenko v. United Cal.
Bank, 30 Cal. 3d 528, 531, 532-33, 536 (Cal. 1982) (holding that an attorney could
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enforce a lien against his client's recovery in one particular matter for “services
rendered in [that matter] and several other matters” (emphasis added)).
Therefore, the district court’s order affirming the bankruptcy court’s
decision is AFFIRMED.
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