Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment and an order of the Superior Court for the County of Los Angeles No. BC 315663, Teresa Sanchez-Gordon, Judge.
Yvonne M. Renfrew, in pro. per. for Appellant.
Law Offices of James B. Kropff and James B. Kropff for Respondents.
FLIER, J.
SUMMARY
An attorney brought a suit for declaratory relief, asserting she was entitled to funds remaining in a client trust account that contained the proceeds of a successful lawsuit she handled for her then-clients. She also sought a declaration that another attorney’s assignment to her of his lien on funds in the account, and her subsequent disbursement of funds to herself under that assignment, was proper. The clients asserted they were entitled to the funds in the trust account, and brought a cross-complaint for fraud, breach of fiduciary duty and other claims. Following a jury trial, judgment was entered awarding the clients damages on their claims of fraud and breach of fiduciary duty, awarding the attorney compensation for certain services in the form of a credit against her liability for damages, and ordering all funds in the client trust account paid to the clients. The clients then sought and obtained an award of attorney fees, and the attorney appealed. We affirm both the judgment and the award of attorney fees.
FACTUAL AND PROCEDURAL BACKGROUND
The circumstances leading to this litigation involve attorney Yvonne Renfrew’s successful representation of Cynthia Frazier and Sharon Gretsch in two sets of lawsuits, each involving separate retainer or representation agreements. We describe these in turn, and then relate subsequent events.
A. The Barnes/Woolsey litigation.
In the first set of lawsuits, Frazier and Gretsch were sued by their landlord (Woolsey) and his lawyer (Barnes) for defamation. Renfrew and another lawyer, Mark Goldowitz, defended Frazier and Gretsch in those lawsuits (Barnes/Woolsey litigation).
The only written agreement covering legal services in the Barnes/Woolsey litigation was dated September 11, 1996, between Frazier and Gretsch (Client) on the one hand and Goldowitz and Renfrew (Attorney) on the other, and was entitled “Retainer Agreement: SLAPP Defense” (SLAPP retainer agreement). The SLAPP (strategic lawsuit against public participation) retainer agreement “pertain[ed] only to legal services in connection with the matter described in paragraph 2” of the agreement. Paragraph 2 identified the lawsuit, denominated “this matter” or “the ‘SLAPP’,” and specifically described the services to be provided, which were largely related to the preparation and defense of a special motion to strike and related attorney fee items. In addition, paragraph 2 included in the matter as a final item: “Provide continued representation, as may be agreed in the future between attorney and client.” The agreement further specified that Goldowitz and Renfrew “will not represent the Client in any other matters in this action,” but that, at their (the attorney’s) option, “the Attorney may continue to represent the client in the SLAPP if and after the special motion to strike is denied.”
Paragraph 2 states that the attorney was retained to represent the client “in the following matter, hereinafter referred to as this matter:”
The SLAPP retainer agreement did not require Frazier and Gretsch to pay any attorney fees directly, “as long as the Client does not interfere with the Attorney’s right to collect fees as set forth in paragraphs 7-12” of the agreement. In paragraphs 7 through 12, Frazier and Gretsch assigned their interests in any attorney fees; consented to the division of fees between Goldowitz and Renfrew; and agreed not to waive fees. In addition, Frazier and Gretsch granted Goldowitz and Renfrew a lien, as follows:
“To the extent that the Attorney does not receive full compensation . . ., the Client grants to the Attorney a lien, in the amount of any unpaid fees and costs, plus interest at the statutory rate, on any sums from any judgment in, or any sums paid in settlement of, any ‘SLAPP-back’ claims which Client may have against the filer(s) of the SLAPP, and/or its attorneys, and/or other responsible parties, arising out of the filing and/or prosecution of the SLAPP, including any claims for malicious prosecution, abuse of process, and/or intentional or negligent infliction of emotional distress. This lien is to have first priority . . . . However, the Client is not obligated to pursue any SLAPP-back claims.”
Goldowitz’s services were rendered principally in connection with an initial anti-SLAPP motion, which was unsuccessful. After the anti-SLAPP motion was denied, Renfrew continued to represent Frazier and Gretsch in the Barnes/Woolsey litigation, but did not enter into any further written agreement with them for her services. Eventually, Renfrew obtained favorable judgments for both clients.
B. The malicious prosecution suits.
After obtaining favorable results for Frazier and Gretsch in the Barnes/Woolsey litigation, in 1999 Renfrew entered into lengthy (17-page) representation agreements (1999 agreements) with each of Frazier and Gretsch “in the matter of a suit for malicious prosecution” arising out of the Barnes/Woolsey litigation. Renfrew waived her ordinary retainer, and Frazier and Gretsch agreed to pay her 50 percent of the gross aggregate of any relief they recovered in malicious prosecution suits against Woolsey and Barnes. The 1999 agreements, which were substantially identical, contained a provision showing how Frazier’s and Gretsch’s net recovery would be calculated: by starting with the amount of the gross recovery; computing the applicable percentage (50 percent); subtracting the attorney fee from the gross recovery; and then subtracting any outstanding costs and expenses. “The remainder is your personal recovery.” Frazier and Gretsch agreed to pay all costs, expenses and disbursements in connection with the malicious prosecution lawsuits. The 1999 agreements also provided that the 50 percent contingent fee did not cover any services beyond the initial resolution of the matter, such as motions for a new trial, appeal, writs, or collection or enforcement of any judgment; any such services would be billed at the highest hourly rate then in effect.
In October 2001, Renfrew obtained a judgment for Frazier and Gretsch in the malicious prosecution lawsuits (which had been consolidated). Each of them was awarded $147,375 (a total of $294,750), plus interest at 10 percent and costs totaling $15,799.08. The case was appealed, but execution of the judgment was not stayed. Renfrew obtained $171,597 from a levy on the judgment, which funds were placed in Renfrew’s client trust account. On April 15, 2002, Frazier and Gretsch authorized Renfrew to accept a total of $300,000 in full satisfaction of the judgment (and the judgment was ultimately satisfied for a total of $310,000). On June 9, 2002, Frazier and Gretsch authorized Renfrew to withdraw 50 percent of the $171,597 received from the levy, and to pay it to herself as her fee for her services in the malicious prosecution action. The remainder was to be held in Renfrew’s client trust account “pending further agreement between you [Frazier and Gretsch], me [Renfrew], and Mark Goldowitz.” The authorization also stated the same treatment was to be afforded to any further proceeds of the judgment. On August 1, 2002, the remaining amount owed on the judgment was paid, and Renfrew distributed 50 percent of it to herself. Renfrew also disbursed $15,799.08 to Frazier and Gretsch to reimburse them for litigation costs.
C. Subsequent events.
The parties thereafter did not agree on the distribution of the remaining funds. The record reveals the following events.
On September 16, 2002, Frazier and Gretsch wrote to Renfrew, demanding that she deposit all of the monies from the malicious prosecution action in an interest-bearing trust account, and that their fee dispute be submitted to the bar association for resolution. Renfrew responded on the same date. She agreed to transfer the remaining $155,000 to an interest-bearing account, and stated that she and Goldowitz proposed to settle the matter by “in effect mak[ing] a gift” to Frazier and Gretsch. Renfrew proposed that Frazier and Gretsch together receive a total of $30,000, less the $15,799.08 in costs already disbursed to them. According to the proposal, Renfrew and Goldowitz would divide the remainder, Renfrew asserting that their contractual liens under the 1996 SLAPP retainer agreement for services in the Barnes/Woolsey litigation “substantially exceed[ed] $155,000 . . . .” Renfrew included with her letter a notice of the clients’ right to arbitrate the fee dispute under the Business and Professions Code.
The following day, Frazier and Gretsch wrote to Renfrew, apparently in response to a request from her for their social security numbers. Their letter stated: “Since we are now adversaries, we are not comfortable sharing personal information with you that could be used against us in the future. If you need us to open up a bank account in our names in order to hold the settlement money, we would be happy to do so. [¶] In the meantime, we will consult with outside legal counsel regarding your request for our social security numbers.”
Frazier and Gretsch requested arbitration of the fee dispute through the bar association. Meanwhile, the following events occurred:
· On August 27, 2002, Renfrew made a personal unsecured loan to Goldowitz of $10,000. On September 6, 2002, she made a further loan to Goldowitz of $10,000.
· On September 18, 2002, Goldowitz irrevocably assigned to Renfrew all his right, title and interest in all liens he possessed – which amounted to “not less than $90,000.00” – against the monies awarded to Frazier and Gretsch in the malicious prosecution action. In consideration of Goldowitz’s assignment, Renfrew forgave repayment of the $20,000 in loans made on August 27 and September 6, 2002. Renfrew did not advise Frazier and Gretsch of the assignment.
Much later, on April 3, 2004, Goldowitz told Frazier and Gretsch that he received $20,000 from Renfrew from the proceeds of the malicious prosecution action, by wire transfers of $10,000 each on August 27 and September 6, 2006. Two weeks later, he corrected himself, advising Frazier that the $20,000 was a personal loan from Renfrew, and sending her a copy of the September 18, 2002 assignment agreement.
· On September 28, 2002, Renfrew wrote to Frazier and Gretsch, asking them to advise her whether they were challenging the validity “of the lien [now amounting approximately, but I believe slightly in excess of, $90,000.00] you gave for services rendered by Mark Goldowitz and his firm pursuant to your original agreement . . . dated on or about September 11, 1996” or whether they were not challenging the Goldowitz lien, “and whether sums subject to that lien may be paid out of the new Trust Account.”
· On September 29, 2002, Frazier and Gretsch responded, “reiterat[ing] our previous demand, faxed to you twice on Sept. 28 . . . that you place all funds which you were not authorized to disburse to yourself into the interest-bearing account in our names,” failing which they would file a complaint with the California State Bar.
· On the same day, Renfrew responded, stating, among other things, that “you have no basis for disputing the payment of liens given for services rendered by Mark Goldowitz and his firm,” and that, even assuming a basis for disputing entitlement to funds “over and above my contingent fee and the amount of the lien given to Mark [Goldowitz], that assumed ‘fact’ gives you no legitimate basis at all for seeking to prevent . . . pay-out of that portion of the funds as to which no legitimate dispute exists or has even been asserted.”
· On February 27, 2003, Frazier and Gretsch wrote to Renfrew, instructing her “to pay the lien to Mark Goldowitz . . . from proceeds from the judgment in our malicious prosecution case that remain in our trust account.”
· On the same day, Renfrew wrote to Frazier and Gretsch, instructing them to “[d]ate and sign below” to authorize her “to pay from the funds on deposit . . . [approximately $139,496.34 . . .] the sum of $92,000.00 . . . in satisfaction of the lien previously given by you to Mark Goldowitz pursuant to the [SLAPP retainer agreement] dated September 11, 1996.” Frazier and Gretsch did so.
· Renfrew then disbursed the $92,000 to herself.
A nonbinding arbitration was held, and on April 27, 2004, the Santa Monica Bar Association issued an award finding that Renfrew was entitled to 50 percent of the $310,000 recovery ($155,000), plus $20,000 as a quantum meruit recovery, and all monies in excess of $175,000 were to be refunded to the client. Renfrew did not accept the arbitration award, and filed her complaint for declaratory relief on May 17, 2004. (See Bus. & Prof. Code, § 6204.) After unsuccessful motions by all parties for summary adjudication of various issues, the matter went to trial.
The arbitrators apparently took the view that the $20,000 Renfrew paid to purchase the Goldowitz lien was a fee-split subject to rule 2-200 of the Rules of Professional Conduct, and because the rule was not complied with, the fee split was void and unenforceable. “However, attorney is entitled to $20,000 as a quantum meruit recovery and attorney can keep $20,000 of the $92,000 lien.”
The trial court ruled there were triable issues of material fact as to, among other things, (1) whether Renfrew’s influence over Frazier and Gretsch regarding payment of the Goldowitz lien continued, so that Renfrew had a duty to comply with rule 3-300 before she acquired the assignment of the Goldowitz lien; and (2) whether the 1999 representation agreements for the malicious prosecution actions included the lien created by the SLAPP retainer agreement as part of the contingency fee.
D. The trial.
Before trial, the trial court granted several motions in limine, precluding Renfrew from adducing certain evidence. These will be described post, along with various disputed jury instructions, in connection with the resolution of Renfrew’s claims of error on appeal. In substance, the parties’ positions at trial were these: Renfrew claimed she was entitled under the 1996 SLAPP retainer agreement to the remaining monies from the malicious prosecution recovery; that Rule 3-300 of the Rules of Professional Conduct (requiring notice to and consent of a client before acquiring a pecuniary or security interest adverse to the client) did not apply where the person in question is no longer the attorney’s client; that Frazier and Gretsch were not harmed by the Goldowitz transaction because, since they were going to pay the money to Goldowitz anyway, they suffered no loss when the money went to Renfrew; and Frazier and Gretsch had no interest in the monies from the malicious prosecution recovery to which a lien would be adverse, because they owed it all to Renfrew and Goldowitz for their services in the Barnes/Woolsey litigation. Frazier and Gretsch’s position was that they were deceived and taken advantage of by Renfrew. They had no obligation under the 1996 SLAPP retainer agreement to bring a malicious prosecution lawsuit, and could have walked away without obligation after Renfrew successfully defended them in the Barnes/Woolsey litigation. Renfrew persuaded them to pursue a malicious prosecution suit, from which they could all benefit. They believed the 1999 agreements changed the 1996 agreement, and that the recovery from the malicious prosecution lawsuit would be shared, with Renfrew taking 50 percent, and the remainder, after reimbursement for costs, would be their personal recovery. They also asserted Renfrew breached her fiduciary duty in connection with her purchase of the Goldowitz lien, intentionally concealing her purchase of the lien, and advising them to pay the lien.
The case was submitted to the jury, which rendered a special verdict. The jury found that:
· No breach of contract occurred. (The jury answered “no” to the question whether Renfrew failed to do something the contract required her to do.)
· Renfrew breached a fiduciary duty toward Frazier and Gretsch, who were harmed; Renfrew’s conduct was a substantial factor in causing the harm; and Frazier and Gretsch’s damages were $24,000 each.
· Renfrew intentionally failed to disclose an important fact that Frazier and Gretsch did not know and could not reasonably have discovered; intended to deceive them by concealing the fact; Frazier and Gretsch relied on Renfrew’s deception and their reliance was reasonable under the circumstances; Renfrew’s concealment was a substantial factor in causing harm to Frazier and Gretsch, whose damages were economic losses of $36,000 each.
The jury also found that Renfrew made a false representation of an important fact to Frazier and Gretsch; knew it was false (or made the representation recklessly and without regard for its truth); intended that Frazier and Gretsch rely on the representation; Frazier and Gretsch reasonably relied on the representation; their reliance was a substantial factor in causing harm to them; but there were no damages. It further found Renfrew did not make a promise to Frazier or Gretsch that was important to the transaction.
· Frazier and Gretsch proved by clear and convincing evidence that Renfrew “engaged in that conduct” with malice, oppression or fraud.
· The total amount of money to which Renfrew was entitled as compensation for her services defending Frazier and Gretsch under the 1996 SLAPP retainer agreement was $20,000.
· Renfrew was entitled to her contingent fee under the 1999 agreements.
· Renfrew was not entitled to any money in addition to the contingent fee for services rendered under the 1999 agreements.
In the second phase of the trial, on the amount of punitive damages, the jury found none.
The trial court entered judgment for damages on the cross-complaints for each of Frazier and Gretsch in the sum of $36,000 each. The court, “[b]ased upon the special verdict of the jury,” granted judgment on Renfrew’s complaint for declaratory relief, declaring that Renfrew’s entitlement to $20,000 as compensation for services provided under the 1996 SLAPP retainer agreement was to be satisfied by granting her credit against her liabilities for the judgments for damages. The court ordered that the entire amount in the client trust account ($47,787.43 as of April 12, 2005) was to be paid to Frazier and Gretsch in equal amounts. If a deficit existed in the trust account, so that the payments to Frazier and Gretsch of all the funds in the account totaled less than $47,787, then Renfrew’s $20,000 credit against the damages judgments was to be reduced by the amount of the deficit. The court further declared Renfrew was not entitled to any money in addition to the contingent fee for services rendered pursuant to the 1999 agreements.
Frazier and Gretsch moved for an order awarding attorney fees. The trial court determined that Frazier and Gretsch were prevailing parties and were entitled to attorney fees of $19,957.49 each.
Renfrew appeals from the judgment and the order awarding attorney fees.
DISCUSSION
Renfrew asserts multiple errors by the trial court in its evidentiary rulings, including those on three motions in limine, and in its instructions to the jury. These evidentiary and instructional errors are claimed to have resulted from the trial court’s misinterpretation and misapplication of the 1996 SLAPP retainer agreement, Probate Code section 16004, and rule 3-300 of the Rules of Professional Conduct. We find no prejudicial error by the trial court. We likewise find no error in the award of attorney fees to Frazier and Gretsch.
A. The 1996 SLAPP retainer agreement.
Frazier and Gretsch filed, and the trial court granted, a motion in limine (No. 2), preventing Renfrew from introducing evidence of legal services beyond the scope of the services agreed to by the parties in the 1996 SLAPP retainer agreement, “if such evidence is being offered to prove the value of Renfrew’s lien . . . created by the [1996 agreement].” Frazier and Gretsch argued the 1996 agreement did not grant Renfrew a lien for services performed outside the scope of those provided for in the 1996 agreement. The trial court agreed, observing that the language in the agreement dealing with continued representation – describing “this matter” to include “provid[ing] continued representation [beyond the special motion to strike], as may be agreed in the future between attorney and client” – was “not sufficient to create a new lien . . . .”
We agree with the trial court. In Fletcher v. Davis (2004) 33 Cal.4th 61, the Supreme Court held that “an attorney who secures payment of hourly fees by acquiring a charging lien against a client’s future judgment or recovery has acquired an interest that is adverse to the client, and so must comply with the requirements of rule 3-300.” (Id. at p. 71, fn. omitted.) Rule 3-300 specifies that a lawyer may not acquire a security or other pecuniary interest adverse to a client unless she satisfies several requirements, including written disclosure to the client; written advice that the client may seek independent advice from another lawyer; and written consent thereafter by the client. In this case, Renfrew continued to represent Frazier and Gretsch after the denial of the special motion to strike, but failed to enter into any further written agreement with them covering those services. Paragraph 2(E) of the 1996 agreement authorized continued representation, but only “as may be agreed in the future between attorney and client.” While we do not doubt there was an oral or implied agreement for Renfrew’s continued representation after the denial of the special motion to strike, the absence of a written agreement for those further services necessarily negates the existence of a lien with respect to those services. (Fletcher v. Davis, supra, 33 Cal.4th at pp. 66, 71-72 [lawyer who asserted client orally granted him a charging lien for hourly attorney fees on any recovery in a subsequent conversion action failed to comply with the requirements of rule 3-300 and therefore could not enforce his lien].) In short, the trial court did not misconstrue the 1996 SLAPP retainer agreement, and accordingly did not err in prohibiting Renfrew from presenting evidence of the services she performed after the special motion to strike was denied.
Rule 3-300 provides that: “A member shall not . . . knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless each of the following requirements has been satisfied: [¶] (A) The . . . acquisition and its terms are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which should reasonably have been understood by the client; and [¶] (B) The client is advised in writing that the client may seek the advice of an independent lawyer of the client’s choice and is given a reasonable opportunity to seek that advice; and [¶] (C) The client thereafter consents in writing to the . . . terms of the acquisition.”
“Requiring the client’s informed written consent has the additional benefit of ensuring that the client truly agrees to the creation of the lien and its scope, thus making it less likely that a disagreement will arise that could lead to litigation or other action adverse to the client, and also impressing upon the client the importance of his or her consent and of the right to withhold it.” (Fletcher v. Davis, supra, 33 Cal.4th at p. 69, emphasis added.)
Renfrew insists the trial court erred, because she was entitled in any event to a reasonable fee for the services she provided, and therefore it was necessarily error to exclude evidence of those services. She contends her complaint stated a claim for the reasonable value of her services, whether or not that amount was secured by a lien. We disagree. Renfrew’s complaint referred to the value of her services, in that she alleged she received no payment, and parenthetically indicated that “[the reasonable value of [those services] is not less than $180,000] . . . .” However, even that reference to the value of her services was stated in the context of her lien claim. The full sentence alleges: “At such point in time, and to the date of this Complaint, no payment whatever had or has been made for Renfrew’s services in the Underlying Barnes/Woolsey Litigation [the reasonable value of which is not less than $180,000], and thus Renfrew’s lien for services in the Underlying Barnes/Woolsey Litigation had and has been satisfied neither in whole nor in part.” (Emphasis added.) It is impossible to read Renfrew’s complaint as alleging a cause of action for damages in quantum meruit. She sought only declaratory relief, founded on her asserted lien. She at no time sought to amend her complaint, nor did she argue to the trial court that the motion in limine should be denied because she was entitled to quantum meruit relief. Moreover, Frazier and Gretsch’s motion in limine expressly sought the exclusion of evidence of services beyond the scope of the 1996 SLAPP retainer agreement, only “if such evidence is being offered to prove the value of Renfrew’s lien . . . created by the [1996 agreement].” The trial court did not err in excluding such evidence.
Renfrew presented evidence that she had spent over 630 hours in defending Frazier and Gretsch in the Barnes/Woolsey litigation, and argued she was owed $188,000 for those services. She also requested a special jury instruction, which was denied, which would have told the jury that, as an alternative to the consideration granted by the 1996 SLAPP retainer agreement, Renfrew contended she was entitled to be compensated for the reasonable value of her services in the Barnes/Woolsey litigation, and that the law imposes an obligation to pay for the reasonable value of services from which a person derives benefit, if both parties had the expectation that such services would be compensated.
Indeed, Renfrew’s opposition to the motion in limine suggests that, if her services in the Barnes/Woolsey litigation were excluded from the operation of the 1996 SLAPP retainer agreement, then Frazier and Gretsch would argue they were “necessarily performed pursuant to a merely ‘oral’ agreement as to which the two-year statute of limitations applicable to oral contracts has already expired.”
Renfrew asserts that, in application, the court’s order granting the motion in limine was used to exclude evidence of Renfrew’s services “for whatever purpose proffered . . . .” Her citations to the record reveal, however, that she at no time asserted she was proffering exhibits or testimony for a purpose other than to prove the value of her lien.
Renfrew argues that even if she violated the rules of professional conduct by failing to have a written fee agreement for her services in the Barnes/Woolsey litigation after denial of the special motion to strike, she is entitled to a reasonable fee. Therefore, she contends, the trial court erred in instructing the jury that an attorney “may not recover for services rendered if those services are rendered in contradiction to the requirements of professional responsibility.” The argument is a classic red herring. There was no contention in this case that the failure to have a written fee agreement for those services violated the rules of professional conduct. The contention was that the 1999 agreements changed the 1996 SLAPP retainer agreement, folding any fees to which Renfrew was entitled under the 1996 agreement into the contingency arrangement in the 1999 agreements.
B. Probate Code section 16004.
The trial court instructed the jury that Frazier and Gretsch claimed they were harmed because Renfrew breached a trustee’s duty by purchasing the Goldowitz lien, not disclosing her purchase, seeking authorization to pay the Goldowitz lien with trust funds from the client’s recovery, and withdrawing and keeping trust funds as payment of the Goldowitz lien. The court further instructed the jury that an attorney is a trustee and fiduciary with respect to funds placed in a client trust account, and (tracking Probate Code section 16004) that:
· A trustee has a duty not to use or deal with trust property for the trustee’s own profit;
· A trustee has a duty not to take part in any transaction in which the trustee has an interest adverse to the beneficiary;
· A trustee may not enforce any claim against the trust property that the trustee purchased after appointment as trustee; and
· “The violation of the above is a breach of fiduciary duty.”
Probate Code section 16004 provides that a trustee “has a duty not to use or deal with trust property for the trustee’s own profit or for any other purpose unconnected with the trust, nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary.” (Prob. Code, § 16004, subd. (a).) It also provides that the “trustee may not enforce any claim against the trust property that the trustee purchased after or in contemplation of appointment as trustee . . . .” (Id. subd. (b).)
Renfrew claims the instruction on breach of a trustee’s duty was “prejudicial in its entirety” because, by virtue of the court’s grant of Frazier and Gretsch’s motion in limine No. 4, she was foreclosed from proving that the account in question was not really a client trust account. (In motion in limine No. 4, Frazier and Gretsch sought an order giving conclusive effect to the allegations of material fact in Renfrew’s complaint, which they sought to have treated as judicial admissions. These included allegations that Frazier and Gretsch instructed Renfrew “to deposit the remainder [of the malicious prosecution recovery] into [Renfrew’s] trust account . . .,” and that Frazier and Gretsch “directed Renfrew to, and Renfrew did, deposit all remaining proceeds of the Malicious Prosecution Judgment into a separate interest-bearing client trust account . . . .”) The trial court granted the motion in limine, which was not opposed by Renfrew.
We discern no basis for Renfrew’s claim of error. First, Renfrew cannot object on appeal to a ruling she did not oppose in the trial court. Second, she fails to cite any reference in the record (and we have seen none) to any offer of proof or evidence she would have presented to show the account in question was actually not, as she alleged in her complaint, “a separate interest-bearing client trust account . . . .” Third, she cites no legal authority that supports her claim that the account was not “what is commonly considered to be a ‘client trust account’. . . .” (See Blackmon v. Hale (1970) 1 Cal.3d 548, 559 [account established by law firm in compliance with Rules of Professional Conduct was a voluntary trust and members of the firm became voluntary trustees of money thereafter placed in that account; “[a]ny action taken by the partners with respect to the money in the account must be considered in the light of their duties and responsibilities as trustees”].)
Renfrew presented her own testimony that Frazier and Gretsch told her to put the funds into a “segregated interest-bearing account,” and that she in fact took the funds out of her client trust account and put them into “a segregated interest-bearing account . . . .” On her next reference to “the segregated account” (in a question relating to whether she ever paid herself monies from any account, as fees for her services, that were not authorized by the clients), Frazier’s counsel objected to Renfrew’s characterization of the account as a “segregated account,” based on motion in limine number 4, and that objection was sustained.
Renfrew claims that a transaction in which an attorney openly assumes a position hostile to his client is “not within the ambit of rules and statutes such as [Probate Code] § 16004,” citing Cooley v. Miller & Lux (1909) 156 Cal. 510 and Boardman v. Crittenden (1921) 52 Cal.App. 438. Neither case has anything to do with Probate Code section 16004. Cooley merely said that the presumption of undue influence with respect to a contract entered into between attorney and client does not apply to a transaction in which the attorney openly assumes a hostile attitude to his client. (Cooley v. Miller & Lux, supra, 156 Cal. at p. 524.) In Boardman, the court held, expressly limiting its discussion “to the peculiar facts of the present case,” that the transaction between attorney and client in that case did not require that the client receive advice from another attorney. (Boardman v. Crittenden, supra, 52 Cal.App. at p. 448.) Renfrew’s claim that she “at all times . . . openly claimed [the monies in the account] as a hostile creditor” does not permit her to act other than as a trustee with respect to the funds in a client trust account.
Renfrew insists the court’s instructions were “inconsistent with the terms and proper application of § 16004,” because she did not “use or deal with trust property” other than to carry out Frazier and Gretsch’s instructions to pay the Goldowitz lien; she did not profit from the Goldowitz assignment because she assumed the risk of all adversarial proceedings; and she never sought to “enforce” the rights she acquired from Goldowitz. No support exists for Renfrew’s assertions. Frazier and Gretsch instructed her to pay the Goldowitz lien because she concealed the fact she had acquired Goldowitz’s lien on the proceeds of the trust account. She “enforced” a claim she acquired from Goldowitz against the proceeds of the trust account by advising Frazier and Gretsch they were obliged to pay the lien, concealing her ownership of the lien, and then paying herself from the trust account proceeds. And her assumption of the risk of adversarial proceedings as partial consideration for her acquisition of the lien does not mean she did not profit from the transaction. There was no error in the trial court’s instructions on the breach of a trustee’s fiduciary duty.
C. Rule 3-300 of the Rules of Professional Conduct.
Renfrew next claims that the trial court misinterpreted and misapplied rule 3-300 of the Rules of Professional Conduct, again leading to errors in evidentiary rulings and instructions to the jury. The substance of Renfrew’s claim is that Frazier and Gretsch were no longer her clients as of September 18, 2002, when Renfrew forgave the $20,000 debt Goldowitz owed her in return for his assignment of his $92,000 lien on the Frazier/Gretsch recovery. According to her argument, because Frazier and Gretsch were no longer clients, Renfrew had no duty under rule 3-300 to notify them and obtain their consent to her acquisition of Goldowitz’s lien on their recovery. Renfrew claims error both in the court’s instructions to the jury and in its exclusion of expert evidence.
1. The jury instructions.
The trial court erred, Renfrew claims, when it instructed the jury that a violation of rule 3-300 – that is, an attorney’s knowing acquisition of a security interest adverse to a client without full disclosure in writing and the client’s consent in writing – is a breach of fiduciary duty and that “client” for these purposes “includes a former client.” Renfrew asserts her representation ended before her acquisition of the Goldowitz lien on September 18, 2002: either on September 10, 2002 (when an appeal from the malicious prosecution judgment was dismissed, and she “had completed all legal services called for by any representation agreement”), on September 16, 2002 (when Frazier and Gretsch demanded fee arbitration), or on September 17, 2002 (when Frazier and Gretsch referred to Renfrew and themselves as adversaries in the fee dispute). However, even assuming that her representation otherwise ended before September 18, we conclude that, for purposes of rule 3-300, an attorney-client relationship must be deemed to have existed on September 18, 2002, and accordingly there was no prejudicial error in the trial court’s instruction.
In Hunniecutt v. State Bar (1988) 44 Cal.3d 362, 371 (Hunniecutt), the Supreme Court held that “if there is evidence that the client placed his trust in the attorney because of the representation, an attorney-client relationship exists for the purposes of rule [3-300] even if the representation has otherwise ended.” Hunniecutt involved a business transaction with the client (an investment loan of funds from a personal injury settlement), which was solicited by the attorney before the settlement funds were disbursed to the client, but which did not actually occur until several months after the personal injury representation had ended. The court rejected the attorney’s contention that the rule’s proscription applied only to the actual consummation of the transaction, “declin[ing] to take such a narrow view of the reach of rule [3-300].” (Id. at p. 370.) The court explained:
“One of the purposes of the rule is to protect clients from their attorneys’ personal use of financial information gained from confidences disclosed during the attorney-client relationship. [Citation.] When a transaction results from an ongoing process of solicitation, begun during the attorney-client relationship and proceeding to consummation uninterrupted by advice from independent counsel, the transaction is properly viewed as one ‘entered into’ during the attorney-client relationship under rule [3-300].” (Hunniecutt, supra, 44 Cal.3d at p. 370.)
Hunniecutt expressly stated that, even if it were to accept either of the attorney’s contentions – that the loan was not solicited until after the settlement funds were disbursed, or that rule 3-300 does not apply to solicitation of a loan not made until after the attorney-client relationship has ended – it “would not hesitate to find an attorney-client relationship in this case.” (Hunniecutt, supra, 44 Cal.3d at p. 370.) The court explained that a client who receives the proceeds of a judgment will often place great trust in the investment advice of the attorney who represented him. The court continued:
“This trust arises directly from the attorney-client relationship, and abuse of this trust is precisely the type of overreaching that rule [3-300] is designed to prevent. Accordingly, when an attorney enters into a transaction with a former client regarding a fund which resulted from the attorney’s representation, it is reasonable to examine the relationship between the parties for indications of special trust resulting therefrom.” (Hunniecutt, supra, 44 Cal.3d at pp. 370-371.)
This case, of course, has significant factual differences from Hunniecutt, which involved a business transaction with the client, rather than the acquisition of a pecuniary interest adverse to the client. Both types of transactions, however, are governed by rule 3-300, and here, as in Hunniecutt, the interest Renfrew acquired in Frazier and Gretsch’s recovery involved “a fund which resulted from the attorney’s representation . . . .” (Hunniecutt, supra, 44 Cal.3d at pp. 370-371.) Accordingly, as in Hunniecutt, “it is reasonable to examine the relationship between the parties for indications of special trust” resulting from the attorney-client relationship. (Id. at p. 371.) When we do, we find that, as in Hunniecutt, the trust placed by the client in the attorney because of the representation had not ended, and “an attorney-client relationship exists for the purposes of rule [3-300] even if the representation has otherwise ended.” (Ibid.) In this case, Renfrew did not expressly advise Frazier and Gretsch that, as of September 10 (or September 16 or September 17) she no longer represented them or that no attorney-client relationship existed. Both Frazier and Gretsch stated, in declarations opposing Renfrew’s summary adjudication motion, that while they disagreed with Renfrew about the division of the settlement proceeds, they still regarded Renfrew as their attorney, trusted her judgment on legal matters, understood the settlement funds she deposited in her trust account were safe, and believed she was the trustee of those funds. Ten days after her purchase of the Goldowitz lien, and after she now claims the attorney-client relationship ended, Renfrew wrote to Frazier and Gretsch, stating that, even if they had a basis for disputing her claims, they had “no basis for disputing the payment of liens given for services rendered by Mark Goldowitz and his firm,” and that tying up the undisputed funds was improper.
We think these circumstances compel the conclusion that, as in Hunniecutt, an attorney-client relationship existed as of September 18, 2002, for purposes of rule 3-300, “even if the representation ha[d] otherwise ended.” (Hunniecutt, supra, 44 Cal.3d at p. 371.) As Hunniecutt stated, “when an attorney enters into a transaction with a former client, the transaction must be scrutinized for signs of unfairness despite the fact that the attorney-client relationship has terminated for most purposes.” (Ibid.) In our view, the same principle necessarily applies when an attorney acquires an adverse interest in a “former” client’s recovery a bare eight days after providing the last of the services for which she was engaged, particularly where the attorney does not expressly notify the client of the termination of the attorney-client relationship, and continues to hold client monies from her representation in a trust account. (Cf. Beery v. State Bar (1987) 43 Cal.3d 802, 812 [attorney denied he was client’s attorney at the time of the transaction; court found attorney-client relationship that existed during prosecution of personal injury suit “had not effectively terminated in relation to this business transaction”; “nothing ever occurred which would signal to [client] an end of the attorney-client relationship”].) Renfrew’s express advice to Frazier and Gretsch on September 29 that it would be improper for them to withhold payment of Goldowitz’s $92,000 lien, without advising them she had purchased that lien for $20,000, is a deception that cannot be countenanced by the mere formality that the substance of Renfrew’s legal services had been completed. We entertain no doubt that Renfrew had a duty under these circumstances to notify Frazier and Gretsch, as required by rule 3-300, of her intended acquisition for $20,000 of Goldowitz’s $92,000 lien on their recovery. In short, “the attorney-client relationship continued for the purposes of rule [3-300]” at the time Renfrew acquired the Goldowitz lien. (Hunniecutt, supra, 44 Cal.3d at p. 371.) Consequently, there was no error in the trial court’s instruction to the jury on rule 3-300.
2. The exclusion of expert testimony.
Before trial began, Frazier and Gretsch filed a motion in limine (No. 1) seeking to preclude testimony from Renfrew’s expert witness, Ellen Peck. Peck, a former judge of the State Bar Court, was prepared to testify that Renfrew had no duty to inform Frazier or Gretsch of, or to obtain their consent to, her acquisition of the Goldowitz lien; that an assignment which comes into existence only after the attorney-client relationship has ended does not fall within the ambit of rule 3-300 as contemplated by its drafters and as customarily interpreted and applied in practice by the State Bar Court; and that it was reasonable for Renfrew to believe that disclosure and consent were not required by rule 3-300. Frazier and Gretsch argued Peck would be offering improper opinion testimony on the law and on Renfrew’s legal duties, and that the reasonableness of Renfrew’s belief was not a defense to any theory of liability in the case.
The trial court granted the motion in limine in part, ruling that Peck could not “give opinion testimony as to whether there was a duty breached by the plaintiff,” and could not testify “as to the reasonableness of [Renfrew’s] beliefs, because that is a matter for the court to decide.” The court allowed Peck to testify “as . . . a percipient witness on other matters.” Peck in fact testified that she had personal knowledge of the ways the State Bar Court interpreted and applied rules of professional conduct, including rule 3-300; that rule 3-300 applied only to an existing client, with some exceptions; and that the only circumstance of which she was aware in which rule 3-300 was applied to a transaction after termination of the attorney/client relationship was when the influence of the attorney/client relationship continued and the lawyer was engaged in a personal transaction with the former client in circumstances where the former client and the attorney were not already adverse.
Three days after the motion in limine was denied, Renfrew filed an offer of proof as to Peck’s testimony. The offer of proof was that Peck would testify (1) that failure to notify and obtain consent of a former client to a transaction such as the Goldowitz assignment did not violate rule 3-300, because the rule does not apply to former clients, and the only exception is where the former clients are induced by the attorney to enter into a transaction with the attorney; (2) failure to inform the client a lien would be satisfied by payment to the lienholder’s assignee is not conduct which violates rule 3-300, so long as the client’s instruction to pay the lien was not induced by suasion and influence the former attorney possessed and exercised over the former client; and (3) the duty imposed by Probate Code section 16004 not to enforce a claim against trust property that the trustee purchased after her appointment as trustee is not violated when an attorney acquires a lien “but does so not for the purpose of ‘enforcing’ it, and does not in fact seek to ‘enforce’ it.” When Renfrew asked for a ruling, during Peck’s testimony several days later, on her offer of proof, the trial court stated it was “denied, in that it goes contrary to the court’s prior ruling on the motion in limine.”
Renfrew contends that, while the existence of a legal duty is a question of law for the court, the question “whether the particular conduct of a specific individual does or does not violate that duty is a question of fact, upon which expert testimony is admissible,” citing Stanley v. Richmond (1995) 35 Cal.App.4th 1070. Renfrew claims the refusal to allow Peck to testify that her conduct in acquiring the Goldowitz lien did not violate rule 3-300 “[c]ompound[ed] the likelihood that the jury would improperly impose liability on [Renfrew] for a non-existent ‘breach’ of a non-existent ‘duty’ . . . .” We disagree.
Stanley v. Richmond tells us that:
“The scope of an attorney’s fiduciary duty may be determined as a matter of law based on the Rules of Professional Conduct which, ‘together with statutes and general principles relating to other fiduciary relationships, all help define the duty component of the fiduciary duty which an attorney owes to his [or her] client.’ [Citations.] Whether an attorney has breached a fiduciary duty to his or her client is generally a question of fact. [Citation.] Expert testimony is not required [citation], but is admissible to establish the duty and breach elements of a cause of action for breach of fiduciary duty where the attorney conduct is a matter beyond common knowledge [citations].” (Stanley v. Richmond, supra, 35 Cal.App.4th at pp. 1086-1087.)
In this case, the facts are not in dispute. Renfrew acquired the Goldowitz lien a few days after the legal services called for in her 1999 representation agreements were completed, but while she was the trustee of a trust account holding client funds, and without expressly advising the clients that the attorney-client relationship was at an end. The only question on these facts is the scope of the attorney’s fiduciary duty, which “may be determined as a matter of law based on the Rules of Professional Conduct . . . .” (Stanley v. Richmond, supra, 35 Cal.App.4th at p. 1086.) In substance, that is precisely what the trial court did, in effect concluding, as this court has done, ante, that Renfrew had a duty, under circumstances that are undisputed, to notify Frazier and Gretsch, as required by rule 3-300, of her intended acquisition for $20,000 of Goldowitz’s $92,000 lien on their recovery. Testimony by Peck that Renfrew’s conduct, which is undisputed, did not violate rule 3-300 is no different from testimony that rule 3-300 imposes no duty on an attorney under those circumstances. Because the existence of a legal duty is an issue of law within the province of the court, there was no error in the trial court’s exclusion of expert testimony on the point.
D. Other claims of instructional error.
Renfrew makes several other claims of instructional error.
First, she asserts the trial court erred in refusing to instruct, in connection with the claims for breach of fiduciary duty, constructive fraud and actual fraud, “that there could be no imposition of liability in the absence of actual pecuniary (i.e., monetary) loss to [Frazier and Gretsch] . . .,” citing City of Vista v. Robert Thomas Securities, Inc. (2000) 84 Cal.App.4th 882, 887 [damages in fraud, breach of fiduciary duty and negligence claims must be “actual monetary loss”]. The court expressly instructed the jury that Frazier and Gretsch claimed they were harmed because Renfrew breached an attorney’s duty and a trustee’s duty in connection with her purchase of the Goldowitz lien, and that Frazier and Gretsch were required to prove both that Renfrew breached the duty and that Frazier and Gretsch were harmed. Similarly, in its instructions on constructive fraud, the court instructed that, to find in favor of Frazier and Gretsch, the jury had to find both that Renfrew breached her fiduciary duty as a trustee by her actions in connection with the Goldowitz lien and that they “suffered damages as a result of [Renfrew’s] breach of duty.” Renfrew cites no legal authority suggesting jury instructions that do not contain the phrase “actual monetary loss” are somehow inadequate. Moreover, in their special verdict, the jury expressly found Renfrew’s concealment was a substantial factor in causing harm to Frazier and Gretsch, whose damages were economic losses of $36,000 each. Consequently, an instruction using the term “actual monetary loss” would have made no difference in the verdict in any event. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580 [judgment may not be reversed for instructional error in a civil case unless the error prejudicially affected the verdict].) We fail to discern any error in the court’s instruction.
Second, Renfrew faults the trial court because it “gave no instruction concerning the appropriate measure of damages applicable to ordinary fraud (i.e., damages based on the ‘out-of-pocket’ rule).” Instead, the court instructed that “[t]he amount of damages must include an award for all harm that Yvonne Renfrew was a substantial factor in causing, even if the particular harm could not have been anticipated.” (See Civ. Code, § 3333.) Renfrew cites Liodas v. Sahadi (1977) 19 Cal.3d 278, in which the court reversed a judgment where the jury was instructed on two theories of liability – ordinary fraud, and fraud or breach of trust by a fiduciary – but was given only one measure of damages (for fraud by a fiduciary). But in Liodas v. Sahadi, the trial court refused defendant’s request for an instruction on the other measure of damages. (Id. at pp. 283-284.) Here, Renfrew did not request an instruction on damages based on the out-of-pocket rule. Moreover, the jury awarded only economic damages on the concealment claim, and Renfrew again fails to show that the alleged instructional error prejudicially affected the verdict.
Among Renfrew’s requested special instructions, all of which were rejected by the trial court, was a lengthy instruction telling the jury that “[e]ven the intentional misrepresentation, concealment or suppression of a material fact with intent to deceive does not constitute actual fraud unless all of the following are true . . .,” and the fourth item in the following list included a statement that the person claiming fraud “suffered actual monetary loss which otherwise would not have occurred.” However, when her special instructions were denied, Renfrew did not call the court’s attention to any defect in the proposed instructions on the measure of damages. Her objection was that the instructions on fraud, constructive fraud and breach of fiduciary duty “invite the jury to impose liability for upset or whatever else in the absence of pecuniary loss.” But the jury found only economic damages on the concealment claim.
Third, Renfrew points out the trial court failed to instruct the jury on the burden of proof, observing that Evidence Code section 502 requires the court to do so. The record shows the parties agreed to CACI No. 200, which explains a party’s obligation to prove that something is more likely to be true than not true. The instruction was not given, and apparently no one noticed the oversight. Renfrew contends this “[i]ncredibl[e]” failure to instruct the jury – which she apparently failed to notice at the time – requires the reversal of each aspect of the jury’s verdict from which she appealed. While the error is obvious, it is not “reversible per se,” as Renfrew claims. “[T]here is no rule of automatic reversal or ‘inherent’ prejudice applicable to any category of civil instructional error, whether of commission or omission.” (Soule v. General Motors Corp., supra, 8 Cal.4th at p. 580.) A judgment may not be reversed for instructional error in a civil case “ ‘unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.’ ” (Ibid., quoting Cal. Const., art. VI, § 13.) Our review of the record confirms that no miscarriage of justice occurred. As to each claim on which Frazier and Gretsch prevailed – breach of fiduciary duty and concealment – the court described the dispute or claim, and instructed the jury that: “To establish this claim, Cynthia Frazier and Sharon Gretsch must prove all of the following: . . . .” Likewise the court instructed that Frazier and Gretsch “must prove the amount of their damages.” There can be no serious doubt that, in common parlance, “prove” is understood to mean, at the least, that something is more likely true than not. Moreover, the jury expressly found that Frazier and Gretsch “proved by clear and convincing evidence that Yvonne Renfrew engaged in that conduct with malice, oppression or fraud.” Consequently, we entertain no doubt that the court’s instructional omission had no effect on the verdict.
E. Substantial evidence claims.
Renfrew contends that no substantial evidence was presented to support the jury’s findings that Renfrew intended to deceive Frazier and Gretsch by concealing an important fact; that they relied on the deception; and that Renfrew’s concealment caused an economic loss to them in the amount of $36,000 each. We cannot agree.
Renfrew’s intent to deceive Frazier and Gretsch about the Goldowitz lien may be inferred from her action. Ten days after she acquired the lien, she told them they had “no basis for disputing the payment of liens given for services rendered by Mark Goldowitz and his firm,” without telling them that she had acquired the $92,000 lien for $20,000. It is reasonable to infer from her conduct that she intended to conceal her acquisition of the lien from them. Similarly, when Frazier and Gretsch finally authorized her, several months later, “immediately to pay the lien to Mark Goldowitz,” Renfrew demanded a re-worded authorization of payment “in satisfaction of the lien previously given by you to Mark Goldowitz . . . .” We agree with Frazier and Gretsch that the inference is, if not “inescapable,” certainly reasonable, that Renfrew, knowing Frazier and Gretsch would not authorize payment to her if they knew she had purchased the lien, intended to continue to hide that fact from them.
Renfrew also argues that objections were erroneously sustained to a question to Renfrew about whether she believed (and to a subsequent question about whether she had “a subjective belief”) she had an obligation to inform Frazier and Gretsch of her acquisition of the lien. The objections were sustained on grounds of legal opinion and relevance, respectively. Renfrew claims this testimony was central to whether or not she acted with intent to defraud. We see no error. The “intent to defraud” is the intent to induce reliance on the misrepresentation or concealment (see 5 Witkin, Summary of Cal. Law (10th ed.) Torts, § 772, p. 1121); Renfrew’s subjective belief that she had no obligation to inform Frazier and Gretsch is, as the trial court ruled in sustaining the objection, irrelevant. In any event, Renfrew was permitted to testify that it was not her intention “to do anything bad to Cynthia Frazier or Sharon Gretsch when [she] omitted to tell them about the assignment agreement . . . .” The jury apparently did not give credence to her testimony.
Renfrew next claims the record is devoid of evidence that Frazier and Gretsch would have acted differently had they known of her purchase of the lien, and that there was no evidence of actual monetary loss. The first claim defies credulity, because Frazier and Gretsch’s intention that Renfrew not disburse further funds to herself is apparent from the fact of the dispute over the remaining funds. The claim of no monetary loss is equally specious, because the funds Renfrew improperly paid herself from the malicious prosecution recovery would otherwise have remained in the client trust account and available for distribution to Frazier and Gretsch.
F. Declaratory relief.
Renfrew contends both that the trial court did not decide the issues she presented in her declaratory relief claim, and that the court “exceeded its jurisdiction” by granting “coercive” relief. Neither claim has merit.
Renfrew requested a declaration she was “entitled to the entirety of the funds remaining from the proceeds of the Underlying Barnes/Woolsey Litigation, and authorizing [Renfrew] to transfer all such sums to herself . . . .” The trial court’s judgment declared, to the contrary, that Renfrew was entitled, as the jury found, to $20,000 as compensation under the 1996 SLAPP retainer agreement, to be satisfied by granting her a credit against her liabilities for the judgments against her for damages, and that the entire amount in the client trust account was to be paid to Frazier and Gretsch in equal amounts. We perceive no ground upon which one could conclude any issue was undecided.
She also asked for a declaration that the Goldowitz assignment was not a transaction within the ambit of rule 2-200 of the Rules of Professional Conduct (which prohibits fee-splitting agreements), and complains the court did not decide this issue. The issue, however, was not litigated at trial.
Renfrew’s insistence that the court did not decide whether she was entitled to “no compensation whatever” for her services is apparently a revisiting of her claim she was entitled to a quantum meruit recovery. As discussed ante, Renfrew sought no declaration on this point.
Renfrew’s claim that the trial court erred in specifying how Renfrew’s entitlement to the $20,000 was to be satisfied, in ordering the funds in the trust account to be paid to Frazier and Gretsch, and so on, is equally meritless. “A court, in granting declaratory relief, has the power to award additional relief.” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 901.) There was no error.
G. Attorney fees.
After the judgment was entered, Frazier and Gretsch sought an order awarding attorney fees under Civil Code section 1717, and on the ground the verdict exceeded offers to compromise made by each of them under Code of Civil Procedure section 998.
The court awarded attorney fees, finding that Frazier and Gretsch were the prevailing parties and were entitled to attorney fees of $19,957.49 each, under Civil Code section 1717 and Code of Civil Procedure section 998. The court reasoned that:
· The 1999 agreements provided that: “In the event litigation, arbitration or other proceedings shall be instituted to collect or recover any fee or other sum paid or required to be paid pursuant to the terms of this Agreement, then the prevailing party shall be entitled to be awarded the reasonable fees, costs, expenses and disbursements of such party’s attorneys in enforcing the provisions of this Agreement.”
· Frazier and Gretsch were entitled to attorney fees as prevailing parties on Renfrew’s complaint for declaratory relief, because the litigation was to determine the disposition of settlement proceeds acquired in the litigation covered by the 1999 agreements, and the terms of the 1999 agreements required Renfrew to pay the sums in the trust account to Frazier and Gretsch.
· As to the cross-complaint, Frazier and Gretsch prevailed on their fraud and breach of fiduciary duty claims. While the language of the 1999 agreements was not expansive, covering only litigation over sums required to be paid under those agreements, Frazier and Gretsch brought the cross-complaints “to establish that [Renfrew] failed to pay those sums, using fraud and breaching her fiduciary duties in her attempt not to pay [Frazier and Gretsch] what was due to them under the contract.”
· In addition, Frazier and Gretsch made offers to compromise under which each offered to have judgment entered in her favor and against Renfrew “in the total sum of $35,500.00, each party to bear their own costs and attorney fees.” There was no ambiguity in those offers, as upon payment of the $71,000, Frazier and Gretsch would have relinquished all claims to the funds in the trust account or any other funds from Renfrew. Consequently, Frazier and Gretsch were entitled to attorney fees as a result of Renfrew’s rejection of their offers to compromise. (Code Civ. Proc., § 998.)
Renfrew contends the award of attorney fees, whether under Civil Code section 1717 or Code of Civil Procedure section 998, was erroneous. Her contention is without merit.
Renfrew brought this litigation after a non-binding arbitration under Business and Professions Code section 6204. Section 6204, subdivision (d) provides that: “The party seeking a trial after arbitration shall be the prevailing party if that party obtains a judgment more favorable than that provided by the arbitration award, and in all other cases the other party shall be the prevailing party. The prevailing party may, in the discretion of the court, be entitled to an allowance for reasonable attorneys’ fees and costs incurred in the trial after arbitration, which allowance shall be fixed by the court. In fixing the attorneys’ fees, the court shall consider the award and determinations of the arbitrators, in addition to any other relevant evidence.” Frazier and Gretsch did not seek attorney fees under this provision.
Renfrew argues attorney fees cannot be awarded to Frazier and Gretsch because she prevailed on Frazier and Gretsch’s claim for breach of contract, and the attorney fee provision of the 1999 agreements did not extend to tort claims. While Renfrew’s premises are literally correct, her conclusion is wrong. As the trial court pointed out, Renfrew brought this suit to determine the disposition of funds recovered in the litigation brought under the 1999 agreements, and Frazier and Gretsch claimed those funds were theirs, not hers, under the terms of the 1999 agreements. Frazier and Gretsch prevailed, and are entitled to their fees “in enforcing the provisions of this Agreement.” Moreover, the tort claims on which they also prevailed were inextricably related to the disposition of the trust account, which “was one of the major issues of the complaint,” because Frazier and Gretsch brought those claims “to establish that [Renfrew] . . . us[ed] fraud and breach[ed] her fiduciary duties in her attempt not to pay [them] what was due to them under the contract.” We see no error in the award of fees based on Civil Code section 1717.
Renfrew also complains that it was error to award fees under Code of Civil Procedure section 998 for a variety of reasons. Because fees were properly awarded under Civil Code section 1717, it is unnecessary to address these additional points.
DISPOSITION
The judgment and the order awarding attorney fees are affirmed. Upon finality of this opinion, the clerk of this court is directed to send a copy of this opinion to the State Bar of California. (See Bus. & Prof. Code, § 6086.8, subd. (a).) Frazier and Gretsch are to recover their costs on appeal.
We concur: COOPER, P. J. RUBIN, J.
“In Barnes and Woolsey v. Gretsch, Frazier and Molho, Los Angeles Superior Court No. SC 039643 (the ‘SLAPP’):
A. Prepare, file and argue a special motion to strike, under Code of Civil Procedure § 425.16, and related defense services until said motion is ruled upon;
B. Attempt to recover attorney’s fees from plaintiff(s) by negotiation or motion;
C. Defend any victory on any such special motion to strike and/or motion for attorney’s fees against any appeal or writ taken by plaintiff(s);
D. Attempt to secure insurance payment for defense of the client (if applicable); and
E. Provide continued representation, as may be agreed in the future between attorney and client.”