Court: California Court of Appeal; September 22, 1950; California; State Appellate Court
Lester E. Hardy, an attorney, initiated a lawsuit against the San Fernando Valley Chamber of Commerce and others to recover attorney's fees after recording a lis pendens. His fourth amended complaint included two counts; the court sustained the defendants’ demurrer to the first count without leave to amend, and to the second count with leave to amend, which Hardy declined. He appealed the order to expunge the lis pendens, the minute orders sustaining the demurrers, and the subsequent judgment.
The first count of the complaint outlined that prior to December 15, 1947, defendant Stillwell was an attorney representing the interests of the Courtneys, who owned a parcel of real estate. On January 2, 1947, the Courtneys entered into a contract for the sale of this property to the Canfields, with the Chamber of Commerce, controlled by the Courtneys and Stillwell, as the seller. The corporation became the record owner after the Courtneys deeded the property.
After the Canfields sued the corporation and the Courtneys for specific performance, a verbal agreement was made between William R. Courtney and Stillwell for legal representation, which included provisions for attorney fees based on the sale of the property. Stillwell completed his obligations under this agreement. Subsequently, on October 10, 1947, Stillwell requested Hardy to take over the defense of the lawsuit, agreeing that if Hardy succeeded, the Courtneys would pay him a percentage of the sale proceeds. The Courtneys were fully informed of all actions taken in the lawsuit, which culminated in a judgment in favor of the defendants on October 4, 1948, where Hardy acted as their attorney.
The Courtneys attended the trial, and the judgment became final on December 5, 1948. Following the judgment, they refused to sell the property, which would have resulted in Stillwell receiving 50% of $6,566.50, minus $3,283.25 owed to the plaintiff. Stillwell was damaged by $3,283.25 and assigned his claim against the Courtneys and the corporation to the plaintiff on March 24, 1949.
The second count reiterates the facts from the first count but adds that Stillwell had been a licensed attorney prior to December 15, 1947, and includes details of his authority to hire the plaintiff for legal representation in the Canfield action. Stillwell had authority from the Courtneys to engage the plaintiff, who agreed to represent them with the condition that they would remove restrictions and pay him 25% from any sale proceeds. The Courtneys substituted Stillwell and the plaintiff as attorneys on October 16, 1947, after which the plaintiff controlled the defense. Despite the final judgment, the Courtneys did not sell the property, leading to the plaintiff claiming damages of $3,283.25 for breach of agreement.
The court ruled that the expungement of the lis pendens was proper because the complaint did not present facts that fell within the relevant legal actions concerning real property. It also noted that an appeal from a demurrer order is not permitted. The first count claims compensation for legal services rendered by Stillwell, but it is invalid because Stillwell was not licensed to practice law after December 15, 1947, and there was no distinction made between services performed before and after that date. Under California law, compensation for legal services cannot be recovered unless the attorney was a member of The State Bar at the time the services were rendered.
Plaintiff, as an assignee, cannot recover for legal services rendered by Stillwell after December 15, 1947, as it is established that Stillwell himself cannot recover for those services. Consequently, the first count of the complaint was found insufficient to constitute a cause of action, and the demurrer to that count was properly sustained.
In contrast, the second count pertains to compensation for services performed by the plaintiff, which, despite being poorly pleaded, includes essential facts for recovery: an express employment agreement separate from Stillwell’s, a fixed compensation agreement, performance of services, success, and a demand for payment that was refused. Respondents' argument that the substitution of attorneys connects the plaintiff to Stillwell is dismissed; the second count alleges that the plaintiff had sole control over the defense following the substitution. There is no indication that the plaintiff's compensation depended on Stillwell's performance of services, nor does the complaint suggest that the plaintiff was to receive only a portion of Stillwell's compensation.
It is established that when an attorney's compensation is fixed by agreement, they can seek that amount in court. The second count stands independently from the first and constitutes a complete cause of action. On appeal, the allegations must be treated as true, and any minor pleading defects that do not affect substantial rights are disregarded. A general demurrer only requires the plaintiff to plead facts that could entitle them to some relief.
In assessing the sufficiency of the pleadings, the court must interpret them liberally to ensure substantial justice. The principles guiding the court emphasize that justice should not be obstructed by technicalities. Applying these standards to the second count, the court concluded that a triable cause of action was adequately pleaded, and thus the demurrer should have been overruled. The court affirmed the order expunging the lis pendens, dismissed appeals regarding the first count's demurrer, affirmed the dismissal of the first count, but reversed the dismissal of the second count with directions to overrule the demurrer. Each party will bear their own costs on appeal.
