Blackhurst v. Ungerman CA3 ( 2013 )

Filed 3/5/13 Blackhurst v. Ungerman CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----
DAVID A. BLACKHURST, C067415
Plaintiff and Appellant, (Super. Ct. No. 34-2008-00007282-
CU-BC-GDS)
v.
ELISA UNGERMAN,
Defendant and Respondent.
Plaintiffs David and Regina Blackhurst, who are spouses, brought the present
action against defendant Elisa Ungerman in propria persona.1 They alleged various
theories (including legal malpractice) under which they incurred damages as a result of
Ungerman‟s representation of them. That representation included a previous action
against Regina‟s former employer, and a subsequent dispute arising among Ungerman,
1 We will refer to the Blackhursts by their first names for clarity. No disrespect is
intended.
1 (SEE CONCURRING OPINION)
her former law firm, and Regina over their entitlement to legal fees out of the substantial
settlement that Regina had received in the underlying action. The trial court sustained
Ungerman‟s demurrer to the Blackhursts‟ third attempt at pleading their case. As to
David, the court found he did not have standing to pursue the present action because he
had dismissed his claims in the underlying action shortly after retaining Ungerman‟s
services. Thus, the court sustained the demurrer without leave to amend and entered a
judgment of dismissal in June 2009 as to him.2 In November 2009, it awarded
Ungerman her legal fees pursuant to the contingency fee agreement that David had
executed with her.
David filed a notice of appeal in November 2009 from the judgment of dismissal
and the order awarding legal fees, which was timely as to the former because he was
never served with notice of its entry. (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal,
§ 581, p. 661 (Witkin).) However, the trial court did not process his notice of appeal
until February 2011. The record on appeal was filed in July 2011. Briefing was
completed in September 2012 after the parties both obtained substantial extensions of
time to file their briefs.
On appeal, David continues to represent himself. He contends he has standing in
the present action to contest the past performance of Ungerman because his attorney-
client relationship continued with her regardless of his withdrawal from the underlying
litigation. He also argues it was improper to award legal fees pursuant to a contract that
the trial court had found to be void (and that he suggests was unconscionable). Finally,
he requests sanctions against Ungerman and her attorney for making frivolous
2 The court sustained the demurrer as to Regina with leave to amend her claims for
malpractice, and as a result she is not a party to this appeal.
2
arguments.3 We shall affirm the judgment of dismissal and the award of legal fees, and
deny the request for sanctions, which is both procedurally barred (Cal. Rules of Court,
rule 8.276(b)) and baseless in light of our affirmances.
FACTUAL AND PROCEDURAL BACKGROUND
There is little in the lengthy appellate record that is material to the issue of
standing. We assume the truth of the well-pleaded factual averments of David‟s third
pleading, and facts properly subject to judicial notice. (Fogarty v. City of Chico (2007)
148 Cal.App.4th 537, 540; Bach v. McNelis (1989) 207 Cal.App.3d 852, 864-865.)
David and Regina filed an action in 2002 in propria persona against Regina‟s
former employer for a wrongful dismissal in September 2001 that was based on her
pregnancy. Faced with a motion for summary judgment in August 2004, they sought out
Ungerman to represent them, who was employed with a law firm at that time.
The Blackhursts entered into a contingency fee agreement with both the law firm
and Ungerman in July 2004. It was their understanding, however, that Ungerman would
be handling the case on her own (“in effect, „moonlighting‟ ”) in a “ „joint venture‟ ” with
the law firm, which did not otherwise represent clients on a contingency basis.
The contract described the scope of representation as the “claim for damages or
other appropriate relief against [Regina‟s former employer] . . . for the injuries and/or
loss suffered by [the Blackhursts] arising out of her termination . . . .” Among the legal
services Ungerman agreed to provide on a contingency basis were settlement
3 In his reply brief, David for the first time raises issues regarding subsequent
proceedings in the trial court. We may disregard an issue raised for the first time in a
reply brief (Sourcecorp, Inc. v. Shill (2012) 206 Cal.App.4th 1054, 1061, fn. 7), and in
any event proceedings occurring after the filing of a notice of appeal are outside the
scope of the appeal (9 Witkin, supra, Appeal, § 337, p. 387).
3
negotiations. It also contained a clause providing “Attorney fees incurred as a result of
any action brought to enforce any fee dispute shall be awarded to the prevailing party.”
Shortly afterward, David agreed to dismiss his own claims against his wife‟s
former employer at Ungerman‟s suggestion “to streamline and simplify the case.” Over
the next year, Ungerman continued to consult with David about his knowledge of his
wife’s case.
In August 2005, Ungerman left her law firm over issues regarding the division of
legal fees from her contingency work. Because the Blackhursts wanted her to continue to
be the attorney of record (in the absence of other attorneys in the law firm having equal
skill or interest in employment litigation), they substituted her individually as counsel in
the ongoing litigation and executed a new contingency agreement identical to the
previous one except for the deletion of any reference to the law firm in its provisions.
They were not aware that Ungerman‟s departure from the law firm was acrimonious.
In December 2005, Ungerman settled the underlying action against Regina‟s
former employer for $230,000. Ungerman‟s former law firm filed a notice of lien for
costs and legal fees. Regina received a check for $105,000, less than the 60 percent
amount specified in the contingency fee agreement. The balance was retained in
anticipation of the resolution of claims for legal fees and costs.
In June 2006, the law firm brought an action against Ungerman and Regina, who
had separate counsel. The lawyer for Regina filed a cross-complaint against the law firm,
which was the subject of a successful special motion to strike. Ungerman waived any
claim of legal fees as part of a settlement of another fee dispute with the law firm. The
trial court in the legal fee action entered judgment in favor of the law firm, rejecting
Regina‟s arguments that the firm was limited to a pro rata share of the 40 percent
4
contingency fee or that it had abandoned her as a client.4 We affirmed the judgment
awarding 40 percent of Regina‟s settlement to the law firm plus reimbursement of costs.
(Anwyl, Scoffield & Stepp v. Blackhurst (Mar. 25, 2011, C059899) [nonpub. opn.].)
The present action was commenced against both Ungerman and her former law
firm in April 2008. The latter prevailed on a special motion to strike the original
complaint (the trial court finding it restated the essence of the cross-claim in the legal fee
action).
David and Regina asserted six theories of recovery (titled “causes of action”) in
the present pleading (second amended complaint). Under each of them, the damages
asserted are the liability of Regina’s settlement for the former law firm‟s legal fees,
contrary to the contingency agreements that the Blackhursts had signed.
In the tentative ruling that the trial court adopted after oral argument, it noted that
David had retained Ungerman for any claim of damages or relief against the former
employer. While Ungerman may have made misrepresentations (regarding the
relationship between her and the law firm) before David withdrew from the underlying
action, the conduct resulting in damages to Regina occurred after David‟s withdrawal
from the action, and therefore he did not have any standing to sue in his own behalf.5
4 The rulings on the special motion to strike and the judgment in the legal fee action
were the subjects of a motion for judicial notice filed in connection with the demurrer at
bar.
5 In connection with Regina, the trial court declined to give leave to amend on the first
four theories: after three attempts she had failed to specify a contractual term that had
been breached; she had failed to establish a deliberate intent to frustrate a common
purpose of the contract; the alleged misrepresentations about the relationship with the law
firm were not a proximate cause of damages; and any infliction of emotional distress was
derivative of the cause of action for malpractice. It allowed Regina another try at
pleading a cause of action for breach of fiduciary duty and malpractice.
5
David opposed the subsequent request for legal fees only on the ground that the
court, in ruling on the demurrer, had found there was no longer a contract between
Ungerman and him. The court explained in its ruling granting the request for fees that,
having premised his action against Ungerman on the contractual relationship with her, he
was subject to the contractual provision for legal fees even if he was unable to prevail on
his claims. The trial court awarded Ungerman nearly $37,000 in legal fees and costs.
DISCUSSION
As a matter of fairness to their opponents (and others with business in this court),
those who proceed without an attorney are not entitled to any greater degree of
consideration and are expected to meet the same standards as the attorneys who appear
before us. (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246-1247.) Pursuant to these
standards of appellate procedure, an appellant must provide an argument (appearing under a
heading summarizing his or her thesis) that does not include tangential claims unrelated to
the heading, supported with relevant authorities. (Imagistics Internat., Inc. v. Department
of General Services (2007) 150 Cal.App.4th 581, 591, fn. 8, 593 & fn. 10 (Imagistics).)
Failure to comply with this principle results in the forfeiture of the claim of error.
I. Lack of Standing
“Every action must be prosecuted in the name of the real party in interest . . . .”
(Code Civ. Proc., § 367.) This is the person who possesses the right to sue under the
substantive law involved; anyone other than a real party in interest lacks standing and is
subject to a demurrer for the failure to state a cause of action. (Redevelopment Agency of
San Diego v. San Diego Gas & Electric Co. (2003) 111 Cal.App.4th 912, 920-921.) The
real party in interest must have a beneficial interest in the action representing an injury
that the general public does not share. (Holmes v. California Nat. Guard (2001)
90 Cal.App.4th 297, 315.)
6
David attempts to mash his allegations into a form of a continued “de facto”
attorney-client relationship with Ungerman, because her communications with him did
not make affirmatively clear that he was not her client any longer. He also points to his
status as a signatory on the second contingency agreement, contemporaneous with the
conduct directly leading to the fee dispute that had an impact on his wife’s settlement
proceeds. Finally, he suggests in passing that he continued to have a financial interest in
the underlying litigation because he had made outlays for costs and his “community
property rights have been severely impacted by the failures by Ungerman.”
David‟s focus is misplaced. It is not his continued relationship with Ungerman
that would confer standing on him (and thus we do not need to address his claims of a “de
facto” relationship or a relationship “renewed” in the second agreement). Her status as
his attorney was for a single purpose—litigating the underlying action against his wife‟s
former employer—and not a general retainer. Once he severed his connection with that
litigation, at a time when any damages were not proximately connected to Ungerman‟s
conduct, he lost any beneficial interest in the outcome of the litigation (injury to which is
the focus of the present case), regardless of the communications that Ungerman
maintained with him concerning the prosecution of the underlying action. We cannot
conceive of any cognizable malpractice damages arising from these continued
communications, nor has David satisfied his obligation to spell out the manner in which
he would propose to amend his complaint to make such an allegation. (People ex rel.
Brown v. Powerex Corp. (2007) 153 Cal.App.4th 93, 112.) As for his brief mention of
his community property rights, he does not identify any point where he raised this claim
in the trial court, and this abbreviated reference in his brief does not fulfill his obligation
as an appellant to present adequate argument and authority in support, nor his obligation
to spell out a proposed amendment to his pleading even if this were a legally viable
theory. (Ibid.) He has therefore forfeited our plenary review. As a result, we note only
7
that The MEGA Life & Health Ins. Co. v. Superior Court (2009) 172 Cal.App.4th 1522,
1528-1529 and Hatchwell v. Blue Shield of California (1988) 198 Cal.App.3d 1027, 1036
both rejected the argument that expenditure of community funds or a community interest
in the res of an action confers standing on a spouse to file suit. We therefore affirm the
judgment of dismissal.
II. Entitlement to Legal Fees
David does not dispute the trial court‟s interpretation of the clause in the
contingency agreement as embracing the present litigation, nor Ungerman‟s status as a
prevailing party, nor the amount of legal fees awarded. Characterizing the ruling on the
demurrer as including a determination that the contingency agreements were “void” or
“invalid,” he argues it is inconsistent and “unconscionable” to impose liability for legal
fees under the agreements.6 David misapprehends both the nature of the ruling on the
demurrer and the doctrine of reciprocal liability for legal fees under Civil Code section
1717 (hereafter section 1717). The legal basis for an award of legal fees is subject to our
de novo review. (Cullen v. Corwin (2012) 206 Cal.App.4th 1074, 1078.)
The ruling that David lacks standing to pursue any cause of action for Ungerman‟s
actions regarding the underlying case did not explicitly (nor necessarily) “void” or
“invalidate” either of the contingency agreements. It is instead premised on his dismissal
of his claims against the former employer of his wife. The agreements are in full force
and effect. Accordingly, his argument that it is “unconscionable” to have the agreements
apply only to him also fails because its essential premise is lacking.
6 Under this heading, David also takes issue with the trial court‟s ruling on the merits (in
connection with Regina) regarding the allegations of fraud. Arguably, this is a “lurking”
argument that we are not obliged to address. (Imagistics, supra, 150 Cal.App.4th at
p. 593, fn. 10.) More to the point, David‟s lack of standing with respect to the action
moots the question.
8
Moreover, even a determination on the merits that the two contingency agreements
are not enforceable does not change the fact that David relied on them in framing his
theories of liability against Ungerman. This is sufficient under section 1717 to subject
him to liability for legal fees under the contracts he attempted to use as a sword. (Manier
v. Anaheim Business Center Co. (1984) 161 Cal.App.3d 503, 507 [prevailing party
entitled to legal fees when sued on contract even where contract determined to be
unenforceable];7 cf. Wilson’s Heating & Air Conditioning v. Wells Fargo Bank (1988)
202 Cal.App.3d 1326, 1333 [reciprocity effect of section 1717 allows litigant sued on
contract as if party to it to recover legal fees under contract even if not a party to it].)
DISPOSITION
The judgment of dismissal and the order awarding legal fees to Ungerman are
affirmed. Respondent Ungerman is awarded her costs on appeal. (Cal. Rules of Court,
rule 8.278(a)(1), (2).)
BUTZ , Acting P. J.
I concur:
DUARTE , J.
7 We note there is a dispute whether, under this principle, the prevailing party must
prove the losing party would in fact have been entitled to recover legal fees under the
contractual basis for the litigation. (See Blickman Turkus, LP v. MF Downtown
Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 896-899.) This is not a limitation that
would apply in the present action in any event, because defendant Ungerman has never
suggested that the Blackhursts would not be entitled to recover legal fees under the
contingency agreements.
9
Mauro J., concurring:
In 2004, David and Regina Blackhurst signed an agreement with Elisa Ungerman
and her law firm in which the attorneys agreed to represent the Blackhursts in a lawsuit
based on Regina‟s alleged wrongful termination from employment. Soon after, relying
on Elisa‟s legal advice, David dismissed his portion of the lawsuit.
Then, in 2005, Elisa entered into a new agreement with David and Regina,
agreeing once again to represent them both in a lawsuit based on Regina‟s alleged
wrongful termination.
If that new agreement was valid as to David, it had to be based on mutual valuable
consideration, i.e., David had to receive something of value from the agreement. And if
David received something of value from the agreement, then it is understandable why he
believes he has a beneficial interest in the agreement, and hence has standing to sue based
on the agreement.
But to state facts sufficient to constitute a cause of action, David must also plead
that he sustained cognizable damages. The second amended complaint alleges, in various
ways, that David‟s damages relate to the settlement of Regina‟s lawsuit and the
distribution of those funds. Because David was no longer a party to that lawsuit at the
time of the settlement, he has no basis to challenge that settlement or its ultimate
distribution. That is why the trial court sustained the demurrer. David‟s alleged damages
cannot arise from the settlement or its distribution.
It is now David‟s burden on appeal to prove that he could plead something
different; he must show that an amendment would cure his deficient pleading. (Gomes v.
Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1153.) But David has
failed to meet that burden. His briefs on appeal focus on the attorney-client relationship
1
and do not show that he could amend his complaint to plead cognizable damages.
Accordingly, I concur in the disposition.
MAURO , J.
2