Thannhaeuser v. TKH Zuma, LLC CA2/8 ( 2024 )

Filed 10/11/24 Thannhaeuser v. TKH Zuma, LLC CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
CHRISTOPHER THANNHAEUSER, B321283
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 19STCV11326)
v.
TKH ZUMA, LLC,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Los
Angeles County, David Sotelo, Judge. Affirmed in part and
reversed in part.
Kordestani Legal Partners, Harrison P. Kordestani; Sutter
Maritime and Howard T. Sutter for Defendant and Appellant.
Myers Law Group and Robert M. Kitson for Plaintiff and
Respondent.
_________________________
Following a bench trial at which the court awarded
Christopher Thannhaeuser judgment in the amount of $114,000
against his landlord TKH Zuma, LLC (Zuma), the trial court
awarded Thannhaeuser $363,696.70 in attorney fees pursuant to
an attorney fees clause in the parties’ lease agreement. Zuma
appeals the order awarding attorney fees, contending the trial
court erred in awarding any attorney fees at all because
Thannhaeuser did not comply with a provision in the lease
requiring mediation as a condition precedent for litigation.
Alternatively, Zuma contends the court erred in awarding
attorney fees for the services of attorney David Williamson, who
was not admitted to practice law in California, and the services of
California attorney Robert Kitson, who, Zuma contends, aided
and abetted Williamson’s unauthorized practice of law. Zuma
contends that even apart from the award to Williamson, the
award is excessive and unreasonable for a routine landlord-
tenant matter.
We agree that the trial court erred in finding that none of
Williamson’s work constituted the unauthorized practice of law in
California. Although Williamson appears to have relied in good
faith on two ethics opinions by county bar associations, those
opinions are not the law, and a portion of Williamson’s work for
Kitson does not fall within any recognized exception which
permits out-of-state lawyers to practice law in California. We see
no evidence that Kitson knowingly aided and abetted
Williamson’s unauthorized practice of law. We see no error in the
trial court’s finding that Thannhaeuser satisfied the mediation
notice provision of the lease agreement and no abuse of discretion
in the amount of attorney fees awarded.
2
We order stricken the award of attorney fees for
Williamson’s work for Kitson on and after October 4, 2018. We
remand this matter for the trial court to calculate the dollar
amount that must be stricken. We affirm the order in all other
respects.
BACKGROUND
For several years before the dispute in the underlying case
arose, David Williamson was personal counsel to Thannhaeuser
and counsel for Concord Blue, an alternative energy company
founded by Thannhaeuser. Concord Blue is based in Germany
but has an office in Santa Monica, California. The underlying
dispute arose from a residential lease Thannhaeuser signed for a
house in Malibu, California. Williamson is located in New York
and had assisted Thannhaeuser and Concord Blue with
environmental law issues and New York business transactions.
In early 2018, Thannhaeuser and Concord Blue approached
Williamson and asked for his assistance with possible mediation
to resolve a lease dispute involving the Malibu property.
Williamson is a member of the New York Bar but not the
California Bar. After consulting the California Rules of
Professional Responsibility and a State Bar of California Ethics
“ethics primer,” Williamson concluded that he could represent
Thannhaeuser in the mediation.
Zuma rejected Thannhaeuser’s mediation request.
Williamson searched for California counsel and ultimately
referred the potential litigation to attorney Robert Kitson.
Concord Blue asked Williamson to continue to monitor the
litigation on its behalf.
Relying on the California rules and Birbrower, Montalbano,
Condon & Frank v. Superior Court (1998) 17 Cal.4th 1193
(Birbrower), Williamson believed he could assist Kitson. “During
the course of litigation, [Williamson] monitored the litigation on
behalf of Mr. Thannhaeuser and occasionally assisted litigation
counsel with respect to various research, strategy and case and
document management matters over the course of over three
years of litigation.” Williamson stated that “[a]t no time did [he]
manage the matter, make litigation decisions, appear in court,
submit documents to the [c]ourt or event travel to California for
this matter.” Williamson’s billing entries showed that he also
drafted documents, including discovery documents, and provided
advice to Kitson on a variety of topics related to the litigation.
After Thannhaeuser obtained judgment in his favor in the
underlying litigation, he sought attorney fees under the lease
agreement in this action. He sought recovery for 169.9 hours of
work by Williamson at $750 per hour. The trial court reduced
the hours to 115 total, at an hourly rate of $600. The total award
was $70,429.64.
Thannhaeuser also sought recovery for the 375 hours
worked by Kitson and his staff. The trial court approved all those
hours, at the rate of $750 per hour for Kitson. The total award
was $293,267.06. This appeal followed.
DISCUSSION
“Generally, an order granting or denying an award of
attorney fees is reviewed under the abuse of discretion standard
of review. [Citation.] However, the determination of whether the
criteria for an award of attorney fees and costs have been met is a
question of law for our de novo review. [Citations.] As for any
disputed factual issues, the trial court’s findings are reviewed
under the substantial evidence rule and must be affirmed if
4
supported by substantial evidence.” (Soni v. Wellmike Enterprise
Co. Ltd. (2014) 224 Cal.App.4th 1477, 1481 (Soni).)
I. Thannhaeuser Complied With the Mediation Notice
Provision of the Lease.
Zuma contends that pre-litigation mediation is a condition
precedent for attorney fees under the lease and the trial court
erred in finding that Thannhaeuser satisfied this condition.
Where, as here, the facts are undisputed, we review de novo the
question of whether the criteria for an attorney fees award have
been met. (Soni, supra, 224 Cal.App.4th at p. 1481.) We see no
error.
Section 39 of the lease provides: “Consistent with
paragraphs B and C below, Landlord and Tenant agree to
mediate any dispute or claim arising between them out of this
Agreement, or any resulting transaction, before resorting to court
action. . . . If, for any dispute or claim to which this paragraph
applies, any party commences an action without first attempting
to resolve the matter through mediation, or refuses to mediate
after a request has been made, then that party shall not be
entitled to recover attorney fees, even if they would otherwise be
available to that party in any such action.”
On April 11, 2108, Thannhaeuser’s attorney Williamson
sent an email to Zuma entitled “Mediation Notice.” In the first
paragraph of the email, Williamson states: “This notice
constitutes a demand for mediation pursuant to para 39 of the
Lease.” In the second paragraph, he indicates that
Thannhaeuser intends to file a lawsuit against Zuma. This
paragraph also contains an offer to settle the dispute for
approximately $200,000. In the third paragraph, he states:
“Please provide times during the week of April 16 when
5
Landlord (and its counsel if applicable) would be
available for a telephonic mediation session. Alternatively,
please indicate if Landlord intends to waive mediation. Failure
of the Landlord to respond in writing to this notice within three
(3) business days shall constitute an irrevocable waiver of
mediation.”
On April 23, 2018, a document via email entitled “Re:
Mediation Notice” was sent to Williamson in response. The first
sentence of the document reads: “As a representative of TKH
Zuma, LLC (hereafter, ‘TKH’) I want to first begin this letter by
responding to your overall inquiry, TKH Zuma will not
participate in any settlement agreement with Mr.
Thannhaeuser.” The letter is signed by Mary Anne Keshen “On
behalf of TKH Zuma, LLC.”
The trial court found that “Thannhaeuser’s evidence shows
that Thannhaeuser made a request for mediation and [Zuma]
rejected mediation.” Zuma contends that Thannhaeuser’s letter
is a “strong-arm settlement demand” which sought only a
telephonic conference, not mediation. Zuma contends that it
expressed its willingness and interest in mediation as required by
the lease.
As Zuma itself points out, mediation is “a process in which
a neutral person or persons facilitate communication between the
disputants to assist them in reaching a mutually acceptable
agreement.” (Code Civ Proc. § 1775.1, subd. (a); Evid. Code
§ 1115, subd. (a).) As Zuma also points out, mediation is
sometimes described as “ ‘a process whereby a professionally
trained neutral facilitates the negotiations between parties to help
them settle a dispute they could not settle themselves.’ ”
6
The fact that Thannhaeuser made a settlement offer which
would expire before mediation would likely begin has no
significance. Zuma could accept the offer, in which case
mediation would be unnecessary, or reject the offer and choose
mediation in an attempt to settle the matter on more agreeable
terms with the assistance of an outside party.
We see no ambiguity in Thannhaeuser’s request for dates of
Zuma’s availability for a “telephonic mediation session.” We see
nothing in this request to indicate that a mediator would not be
involved. Put differently, we see no reason to understand the
request as indicating that the telephone call would involve the
parties alone.
The time period set by Thannhaeuser was short, but the
lease contains no details of a timeline for mediation or a method
(in-person or telephonic). Whichever party was contemplating
litigation was free to propose both details. If the other party
wanted to mediate but felt the proposed timeline or method was
unreasonable, that party could make a counter-proposal. That
was not the factual situation here. Zuma clearly stated that it
would not participate in a settlement agreement with
Thannhaeuser. Because settlement is the goal of mediation,
rejecting any possibility of settlement is necessarily a rejection of
mediation.
We cannot agree with Zuma that it expressed its
willingness and interest in mediation. Zuma cites to a letter sent
by counsel for the former receiver, Theodore G. Phelps, to
Thannhaeuser’s counsel. Although it is not clear why
Thannhaeuser initially contacted Phelps, Phelps was not a party
to the underlying lawsuit; he was no longer the receiver for the
property and had no authority to speak for Zuma. Zuma’s own
7
response unequivocally rejected any settlement with
Thannhaeuser, which necessarily is a rejection of mediation.
II. The Trial Court Erred in Finding Williamson’s Assistance
to Kitson Was Permissible Without California State Bar
Membership.
“A fundamental principle of California law, enshrined in
the State Bar Act (Bus. & Prof. Code, § 6000 et seq.), is that no
person may ‘practice law in California’ unless that person is an
active member of the State Bar. (Bus. & Prof. Code, § 6125
(section 6125).) As a corollary principle, no person may recover
compensation for practicing law ‘in California’ unless that person
was a member of the State Bar or admitted pro hac vice at the
time the services were performed, or the legal services fall within
an exception.” (Golba v. Dick’s Sporting Goods, Inc. (2015)
238 Cal.App.4th 1251, 1255 (Golba).)1
It is undisputed Williamson was a licensed attorney in New
York but not in California. Williamson did not seek admission
pro hac vice for this case. Zuma contends Williamson’s work in
this matter amounted to the practice of law in California, his
work did not fall within any exception to the licensing
requirement, and so the trial court erred in awarding Williamson
$70,429.64 in attorney fees. Zuma further contends Kitson aided
and abetted Williamson’s unauthorized practice of law and so is
not entitled to attorney fees either.
“[W]here ‘the facts are undisputed, we review de novo
whether a person’s conduct amounts to practicing law without a
license.’ ” (Altizer v. Highsmith (2020) 52 Cal.App.5th 331, 337.)
1 Undesignated statutory references are to the Business and
Professions Code.
8
“As for any disputed factual issues, the trial court’s findings are
reviewed under the substantial evidence rule and must be
affirmed if supported by substantial evidence.” (Soni, supra,224 Cal.App.4th at p. 1481.)
We break our analysis into two time periods, April 3
through October 3, 2018 and October 4, 2018 through the end of
the case. As we set forth in more detail below, we hold that
Williamson’s work for the first period, before local counsel was
retained, was authorized under California Rules of Court, rule
9.47.2 We see no applicable exception for Williamson’s work once
Kitson was hired.3 Accordingly, the award for attorney fees for
Williamson’s work after October 3, 2018 must be stricken.4
A. Rule 9.47 Applies to Williamson’s Activities from
April 2018 Through October 3, 2018.
Williamson sought reimbursement for work performed
before California counsel Kitson was retained in this matter. The
trial court noted generally that Williamson could have qualified
as pro hac vice counsel under rule 9.47(c)(2). On appeal,
2 Undesignated rules are to the California Rules of Court.
3 Rules 9.43 through 9.48 provide a limited number of
specific exceptions. It is undisputed that, apart from the initial
exception under rule 9.47, Williamson’s work for Kitson does not
fall under any of exceptions in these rules.
4 We note that the trial court reduced the hours recoverable
by Williamson from 169.9 to 115. It is not clear which specific
hours the trial court struck. Accordingly, we remand this matter
for the trial court to calculate the number of hours for which
Williamson should be compensated for the time period April 3
through October 3, 2018.
9
Thannhaeuser contends that rule 9.47 covers Williamson’s work
before Kitson became primary counsel. We agree.
Rule 9.47(c) provides in pertinent part: “An attorney
meeting the requirements of this rule, who complies with all
applicable rules, regulations, and statutes, is not engaging in the
unauthorized practice of law in California if the attorney’s
services are part of: [¶] . . . [¶] (2) A formal legal proceeding that
is anticipated but is not yet pending in California and in which
the attorney reasonably expects to be authorized to appear.”
On appeal, Zuma contends for the first time that rule 9.47
does not apply because Williamson “could never have had the
reasonable belief he would receive pro hac vice admission . . . as
Mr. Williamson failed to even apply for admission pro hac vice.”
Zuma contends that without filling out a pro hac vice application,
Williamson would not have understood the pro hac vice
qualifications or his fitness under those standards, and so could
not assess the likelihood of acceptance by the State Bar.
There are more ways to learn about pro hac vice
applications than by filling out an application. Williamson stated
in his reply declaration that he researched the issue of practicing
law in California and believed that he could initially practice law
in California under rule 9.47(c)(2) and, if mediation were
scheduled to occur, he would seek pro hac vice admission “as
might be required.” The extent of Williamson’s knowledge about
pro hac vice requirements and whether he had a belief he would
be admitted are questions of fact; without those facts we cannot
assess the reasonableness of any belief Williamson might have
had. Zuma forfeited this issue by failing to raise it in the trial
court, and to develop a supporting factual record.
10
In its reply brief, Zuma contends for the first time that rule
9.47(c) is temporary and is only in effect until such time as the
attorney’s pro hac vice application is submitted and heard.
Although we do not normally consider arguments made for the
first time in a reply brief, we note that practice under rule 9.47 is
limited temporally. As the last sentence of rule 9.47(c) makes
clear: “The attorney whose anticipated authorization to appear in
a formal legal proceeding serves as the basis for practice under
this rule must seek that authorization promptly after it becomes
possible to do so. Failure to seek that authorization promptly, or
denial of that authorization, ends eligibility to practice under this
rule.”
An application for admission pro hac vice requires
identification of local counsel. (Rule 9.40(d)(6).) At most,
Williamson engaged in the solo practice of law in this matter for
about three weeks, from April 3 through April 24, 2018, for a
total of 21.2 hours. That time was spent investigating the facts of
the dispute, giving the required mediation, and evaluating
Zuma’s response to the mediation notice. From April 25 through
August 4, 2018, Williamson’s time entries all relate to the search
for California counsel and preparations to turn the case files over
to such counsel.
We cannot fault Williamson for not locating California
counsel in the three weeks he worked substantively on this
matter, particularly when his time entries show that he was
familiarizing himself with the facts of the case. Without more
information, it is impossible to say when Williamson “should”
have been able to find local counsel after his initial investigation
was complete. His time entries indicate that he reviewed the fee
agreement with Kitson on August 4, 2018. Given that
11
Williamson’s time entries between April 24 and August 4 all
relate directly or indirectly to the search for counsel, we cannot
say he was dilatory. Thus, at the earliest, Williamson could have
filed his application on August 5, and so this was the earliest he
could have lost eligibility under rule 9.47. It is not entirely clear
when Kitson was formally retained, but there are literally no
time entries by Williamson from August 5 through October 3.
Kitson had clearly been retained by October 4, when Williamson
conferred with Kitson about the drafting of the complaint.
Accordingly, we conclude that rule 9.47 applied to Williamson’s
activities through October 3, 2018.
Thannhaeuser contends that Williamson’s loss of eligibility
could have been cured by having Williamson “apply for pro hac
vice status nunc pro tunc.” Thannhaeuser relies on Golba, which
considers the question of whether an order concerning pro hac
vice admission could be corrected nunc pro tunc. (Golba, supra,
238 Cal.App.4th at p. 1265.) The function of a nunc pro tunc
order is to correct a clerical error in a previously made order.
(Ibid.) Here, there is no order to correct because there was no
application by Williamson. (Ibid. [“ ‘ “The function of a nunc pro
tunc order is merely to correct the record of the judgment and not
to alter the judgment actually rendered—not to make an order
now for then, but to enter now for then an order previously
made.” ’ ”].)
B. An Out-Of-State Attorney’s Provision of Mere
Assistance Is Not a Stand-Alone Exception to
California’s Licensing Requirement.
We see no abuse of discretion in the trial court’s factual
determination that Kitson managed the action with assistance
from Williamson. It is undisputed that Kitson made all the
12
appearances and signed all the pleadings and submissions. It is
similarly undisputed that Williamson undertook research and
writing and gave advice to Kitson. It was not an abuse of
discretion for the trial court to find, based on the time entries and
the court’s observation of Kitson throughout the litigation, that
Kitson directed the case “with input from Williamson.”
The trial court found a blanket exception to section 6125
which permits an out-of-state attorney to practice law in
California as long as the lead attorney in the case is licensed in
California. We cannot agree. At most, this is one factor to be
considered in determining whether the out-of-state attorney
engaged in the unauthorized practice of law in California.
As the Supreme Court has explained: “In our view, the
practice of law ‘in California’ entails sufficient contact with the
California client to render the nature of the legal service a clear
legal representation. In addition to a quantitative analysis, we
must consider the nature of the unlicensed lawyer’s activities in
the state. Mere fortuitous or attenuated contacts will not sustain
a finding that the unlicensed lawyer practiced law ‘in California.’
The primary inquiry is whether the unlicensed lawyer engaged in
sufficient activities in the state, or created a continuing
relationship with the California client that included legal duties
and obligations. [¶] Our definition does not necessarily depend on
or require the unlicensed lawyer’s physical presence in the state.
Physical presence here is one factor we may consider in deciding
whether the unlicensed lawyer has violated section 6125, but it is
by no means exclusive. For example, one may practice law in the
state in violation of section 6125 although not physically present
here by advising a California client on California law in
connection with a California legal dispute by telephone, fax,
13
computer, or other modern technological means.” (Birbrower,
supra, 17 Cal.4th at pp. 128–129.) The Supreme Court also
pointed out “the obvious fact that other states’ laws may differ
substantially from California law. Competence in one
jurisdiction does not necessarily guarantee competence in
another. By applying section 6125 to out-of-state attorneys who
engage in the extensive practice of law in California without
becoming licensed in our state, we serve the statute’s goal of
assuring the competence of all attorneys practicing law in this
state.” (Id. at p. 132.)
Here, Williamson’s stated reason for his work in this
matter was to monitor and provide assistance to litigation on
behalf of Thannhaeuser, a long-time client. Thus, Williamson
had a direct relationship with Thannhaeuser, who was a
California resident during the lease agreement which forms the
basis of this dispute and alleged in his complaint that he was a
California resident. Paragraph 43 of the lease provides “This
Agreement is subject to California landlord-tenant law.” Zuma
was a California limited liability company, and the underlying
real property is located in California. There can be no real
disagreement that this litigation involves a California dispute
which would require the application of California law in a
California state court. Williamson’s legal work was provided to
California counsel for use in a California court. The work lasted
for over three years. We have no difficulty concluding that
Williamson was practicing law “in California” within the
meaning of Birbrower.
Thannhaeuser contends the trial court correctly identified
Winterrowd v. American General Annuity Ins. Co. (9th Cir. 2009)
556 F.3d 815 (Winterrowd) as persuasive authority. We do not
14
find the Ninth Circuit’s brief discussion of Birbrower helpful,
particularly in light of the significant factual differences between
this case and Winterrowd.
In Winterrowd, the California clients hired California
counsel. California counsel then entered into an agreement with
an out-of-state attorney “to provide [California counsel] with
assistance in prosecuting an action against the defendants, who,
as it happens, asserted a meritless defense under federal law,
namely, ERISA preemption. Thus, the case turned more on that
issue than any issue regarding California law.” (Winterrowd,
supra, 556 F.3d at p. 822.) Further, the Ninth Circuit in
Winterrowd found that the relationship between out-of-state
counsel and California counsel “was for all practical purposes a
partnership.” (Ibid.)
As set forth above, the facts are significantly different here.
This case involves California law, and there is nothing in the
record to suggest that California counsel Kitson hired
Williamson, or that there was a “partnership” relationship
between the two. (If anything, something close to the reverse is
true—Williamson assisted Thannhaeuser in hiring Kitson.)
The Ninth Circuit found that “Birbrower suggested that
fees would have been awarded for the practice of law engaged in
California by the out-of-state members of the firm if a ‘firm
attorney engaged in that practice was an active member of the
California State Bar.’ ” (Winterrowd, supra, 556 F.3d at p. 822.)
The full statement in Birbrower reads: “Birbrower engaged in
unauthorized law practice in California on more than a limited
basis, and no firm attorney engaged in that practice was an
15
active member of the California State Bar.” (Birbrower, supra,17 Cal.4th at p. 131, italics omitted.)5
We doubt the California Supreme Court intended to create
an extensive exception to the California licensing requirement
simply by noting that no attorney in Birbrower’s firm was a
member of the California State Bar. That is, we doubt that the
Supreme Court intended to permit an out-of-state attorney to
practice law in California without State Bar membership as long
as one attorney in the out-of-state attorney’s firm was a member
of the California State Bar. Further, in 2004, the Supreme Court
added several exceptions to the rules permitting an out-of-state
attorney to practice law in California.6 Membership in a
partnership with licensed California lawyers was not one of those
exceptions. If the Supreme Court had truly intended in
Birbrower to create an exception for out-of-state attorneys who
were members of a firm which included California attorneys,
5 The court also relied on a subsequent statement by the
California Supreme Court about Birbrower: “In Birbrower, we
concluded that an out-of-state law firm was not entitled to a
judgment enforcing its client’s obligations under a fee agreement
for legal services rendered in California, because neither the firm
nor its lawyers were authorized to practice law in California.
Birbrower is inapposite.” (Frye v. Tenderloin Housing Clinic, Inc.
(2006) 38 Cal.4th 23, 48–49.) At most this is dicta.
6 The exceptions apply to an out-of-state attorney who is a
registered legal aid attorney (Rule 9.45), registered in-house
counsel (Rule 9.46), attorney practicing law temporarily in
California as part of litigation (Rule 9.47), or nonlitigating
attorney temporarily in California to provide legal services
(Rule 9.48).
16
these rules would have been the time to formalize that exception.
The Court chose, instead, to create more limited exceptions.
In addition, the Supreme Court explicitly rejected an
exception based on a looser relationship between attorneys:
“Contrary to the trial court’s implied assumption, no statutory
exception to section 6125 allows out-of-state attorneys to practice
law in California as long as they associate local counsel in good
standing with the State Bar.” (Birbrower, supra, 17 Cal.4th at
p. 126, fn. 3.)
On appeal, Thannhaeuser cites Estate of Condon (1998)
65 Cal.App.4th 1138 (Condon) which he describes as
“instructive.” Condon does not assist Thannhaeuser; if anything,
it reinforces our conclusion that Williamson was practicing law in
California under Birbrower.
The court in Condon applied Birbrower to the facts before
it. As the court emphasized: “Most significantly [the client] was
a resident of the State of Colorado.” (Condon, supra,
65 Cal.App.4th at p. 1146.) Thannhaeuser, by contrast, was a
California resident, before and at the commencement of the
litigation. The out-of-state firm, retained by the out-of-state
client in Condon, was retained to represent that client as
“coexecutor of the estate of Evelyn J. Condon. The firm’s primary
representation involved the implementation of the buy/sell
agreement which was part of an estate plan drafted by the firm
in Colorado. Its services involved the negotiation, settlement and
drafting of documents resolving the dispute among the heirs of
the estate.” (Id. at p. 1147.)
The court in Condon concluded: “[T]he fact that California
law was not implicated in the [out-of-state] firm’s representation
. . . provides us additional impetus to conclude that the policy of
17
protecting California citizens from untrained and incompetent
attorneys has not been breached.” (Condon, supra,
65 Cal.App.4th at pp. 1147–1148.) Here, of course, we are
concerned with a standard California Association of Realtors
lease agreement (obviously not drafted by Williamson) and with
active litigation occurring in a California court. California law
was clearly implicated.
Williamson has indicated that he considered and relied on
ethics opinions by two local bar associations: Orange County Bar
Association Formal Opinion 2014-2 and San Diego County Bar
Association Ethics Opinion 2007-1. These ethics opinions are in
no way binding on us, and we do not find them helpful.7
We do not read the Orange County Bar Association opinion
as broadly as Williamson does. That opinion states: “Whether
Out-of-State Lawyer is engaging in the unauthorized practice of
law in California, and whether California Counsel of Record and
Law Firm are aiding in his unauthorized practice of law, will
depend on the specific factual situation and the scope of Out-of-
State Lawyer’s involvement. The analysis will consider the
significance of the contact with the client and the activity in the
state, which may occur in person or remotely through the use of
technology, as discussed in Birbrower. Assuming there is no
significant involvement with Client, however, the mere act of
Out-of-State Lawyer’s ghostwriting a document for California
7 “ ‘Although not binding, opinions of ethics committees in
California should be consulted by members for guidance on
proper professional conduct. Ethics opinions and rules and
standards promulgated by other jurisdictions and bar
associations may also be considered.’ ” (State Comp. Ins. Fund v.
WPS, Inc. (1999) 70 Cal.App.4th 644, 656.)
18
Counsel of Record is not likely to constitute the unauthorized
practice of law in California.” (Professionalism and Ethics Com.,
Orange County Bar Assn. Formal Opn. No. 2014-1 (2014) p. 7
<https://www.ocbar.org/Portals/0/pdf/OCBA201401.pdf> [as of
Oct. 11, 2024], archived at <https://perma.cc/2GF9-RHMU>.)
This is, at best, an application of Birbrower, to a particular
(hypothetical) set of facts. We do not find this application
helpful, as the hypothetical facts are quite different from the
facts in this case. As discussed above, Williamson was not merely
an out-of-state lawyer hired by a California lawyer to draft
documents. We have directly applied the reasoning of Birbrower
to the actual facts of this case and have concluded Williamson
was practicing law in California without a license.
We do not find the San Diego opinion persuasive on the
law. The opinion relies on Gafcon, Inc. v. Ponsor & Associates
(2002) 98 Cal.App.4th 1388, a case which involves the prohibition
on the corporate practice of law. The considerations behind this
prohibition are unique to the corporate structure and the
activities which constitute the unauthorized practice of law by a
corporation which uses in-house attorneys to provide legal
services to third parties are distinctively different.
C. There Is No Basis to Conclude Kitson Knowingly
Aided and Abetted the Unauthorized Practice of Law.
Zuma contends Kitson aided and abetted Williamson’s
unauthorized practice of law. Zuma relies on California Rules of
Professional Conduct, rule 5.5(a), which states: “A lawyer
admitted to practice law in California shall not: [¶] . . . [¶]
(2) knowingly assist a person in the unauthorized practice of law
in that jurisdiction.” Zuma has not shown that Kitson
“knowingly” assisted Williamson in the unauthorized practice of
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law. As our discussion above shows, there is very little case law
on this issue. Existing law is evolving. The trial court
misunderstood the scant law on this issue. At least two
California county bar associations have issued opinions
suggesting that Williamson’s activities might not be considered
unauthorized.
The two cases relied upon by Zuma are inapposite. In both
cases, the licensed attorneys knew that the unlicensed attorney
could not practice law; there was no ambiguity on this point. In
People ex rel. Herrera v. Stender (2012) 212 Cal.App.4th 614(Stender), the attorney had resigned with disciplinary charges
pending and was not authorized to practice law. In Crawford v.
State Bar (1960) 54 Cal.2d 659 (Crawford), the lawyer was
disbarred.
In both cases, the licensed attorneys helped the unlicensed
attorney conceal his lack of authorization to practice law from
clients. In Stender, the licensed attorneys “provided the means
for [the disbarred attorney] to continue his law practice [with his
firm]. According to the clients’ declarations, they were told, and
led to believe by the conduct they observed, that [the unlicensed
attorney] was their attorney, and it was [the unlicensed attorney]
who developed the legal strategies for their cases, gave legal
advice, and discussed and collected legal fees.” (Stender, supra,
212 Cal.App.4th at p. 638.) In Crawford, the disbarred lawyer’s
son, a licensed attorney, took over the father’s practice, changed
the office name and letterhead to mislead the public about the
father’s lack of a license and “[t]here was evidence that clients
came to [the father] for services that could only be performed
because of the arrangement with [his son].” (Crawford, supra,
54 Cal.2d at p. 666.) Thus, in both cases, the licensed attorneys’
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conduct demonstrated that they knowingly intended to assist the
unauthorized practice of law.
The unauthorized nature of Williamson’s activities was not
as obvious in this case, and Kitson’s conduct is consistent with a
belief that Williamson fell within an exception to the licensing
requirement. There is no indication that Kitson tried to conceal
Williamson’s activities in this case, or to mislead Thannhaeuser
about Williamson’s ability to practice law in California.
III. The Trial Court Did Not Abuse Its Discretion in
Determining the Amount of the Award.
Zuma contends the trial court erred in awarding excessive
attorney fees in the amount of $363,696.70 for a routine landlord
tenant dispute.8 Specifically, Zuma contends the trial court erred
in “aligning with [Thannhaeuser’s] wrongful allegation that
[Zuma] unnecessarily prolonged litigation,” giving rise to
Thannhaeuser’s attorney fees.
“Civil Code section 1717 provides that ‘[r]easonable
attorney’s fees shall be fixed by the court.’ As discussed, this
requirement reflects the legislative purpose ‘to establish uniform
treatment of fee recoveries in actions on contracts containing
attorney fee provisions.’ [Citation.] Consistent with that
purpose, the trial court has broad authority to determine the
amount of a reasonable fee. [Citations.] As we have explained:
‘The “experienced trial judge is the best judge of the value of
professional services rendered in his court, and while his
judgment is of course subject to review, it will not be disturbed
8 Zuma has not argued that the trial court abused its
discretion in its award of fees for work by legal assistants and
paralegals. Accordingly, the award of those fees is affirmed.
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unless the appellate court is convinced that it is clearly
wrong” ’—meaning that it abused its discretion.” (PLCM Group,
Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094–1095.)
The trial court found the fees were reasonable “for a case
lasting nearly four years and that involved voluminous motion
and other work to reach a final conclusion.” The court’s finding
concerning the length and volume of work in this case is amply
supported by the docket in this case.
The trial court found reasonable the number of hours
sought by Kitson9 as they were supported by Kitson’s declaration
describing the work he did, his time entries with descriptions of
the work performed, and the trial court’s own experience in this
matter. We cannot say that 375 hours for a matter that lasted
four years and involved a voluminous motion practice is
unreasonable on its face.
The court found Zuma did not directly address the
reasonableness of the hours requested. The same is true on
appeal. Zuma makes no specific argument about any time spent
by Kitson. Zuma has failed to show an abuse of discretion by the
trial court.
The trial court found inaccurate Zuma’s argument that
Kitson’s hourly rate was supported only by a declaration of an
attorney acquaintance, Philip Shaknis. The trial court based its
award of $750 per hour on Kitson’s declaration and
accompanying exhibits showing his years of experience and on
the trial court’s own experience. The trial court also noted there
was evidence showing approval of similar fees by other California
9 The trial court did reduce the number of hours recoverable
by Williamson, from 169.9 to 115.
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courts. Zuma simply repeats its inaccurate argument about
Shaknis on appeal. Zuma has failed to show an abuse of
discretion by the trial court.
DISPOSITION
The award of attorney fees to Williamson for services
rendered on and after October 4, 2018 is ordered stricken, and
this matter is remanded to permit the trial court to calculate the
amount of the reduced award. The order is affirmed in all other
respects. Costs on appeal are awarded to respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
STRATTON, P. J.
We concur:
WILEY, J.
VIRAMONTES, J.
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