Sands & Assoc. v. Juknavorian 10/30/12 CA2/1

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State: California

Court: California Eastern District Court

Docket No: B232686M

Case Date: 10/30/2012

Plaintiff: Sands & Assoc.

Defendant: Juknavorian 10/30/12 CA2/1

Preview:Filed 10/30/12

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION ONE

SANDS & ASSOCIATES, Plaintiff and Respondent, v. MARTIN JUKNAVORIAN, Defendant and Appellant.

B232686 (Los Angeles County Super. Ct. No. SC097326) ORDER MODIFYING OPINION AND DENYING REHEARING [CHANGE IN JUDGMENT]

THE COURT: It is ordered that the opinion filed herein on October 10, 2012, be modified as follows: On the last page of the opinion (page 35), under the heading, DISPOSITION, delete the first sentence in its entirety (The judgment is reversed.) and replace it with: The judgment is reversed as to the award of attorney fees. The second sentence under the heading, DISPOSITION, remains unchanged.

This is a change in the judgment. Respondent`s petition for rehearing is denied. CERTIFIED FOR PUBLICATION.

MALLANO, P. J.

ROTHSCHILD, J.

CHANEY, J.

Filed 10/10/12 (unmodified version)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION ONE

SANDS & ASSOCIATES, Plaintiff and Respondent, v. MARTIN JUKNAVORIAN, Defendant and Appellant.

B232686 (Los Angeles County Super. Ct. No. SC097326)

APPEAL from a judgment of the Superior Court of Los Angeles County, Cesar C. Sarmiento, Judge. Reversed. Law Office of Victor Jacobovitz and Victor Jacobovitz for Defendant and Appellant. Heleni E. Suydam for Plaintiff and Respondent.

___________________________________________

The question on appeal is whether a law firm can recover attorney fees under a prevailing party clause when the firm is a successful litigant represented by of counsel. Our analysis is based on two well-settled principles. First, when a law firm is the prevailing party in a lawsuit and is represented by one of its partners, members, or associates, it cannot recover attorney fees even though the litigation is based on a contract with a prevailing party clause. (See Carpenter & Zuckerman, LLC v. Cohen (2011) 195 Cal.App.4th 373, 375, 385 (Carpenter); see also Trope v. Katz (1995) 11 Cal.4th 274, 277, 292 (Trope).) Second, the relationship between a law firm and of counsel is close, personal, continuous, and regular.` (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1153 (SpeeDee Oil), italics omitted.) [T]o the extent the relationship between [an attorney] or law firm and another [attorney] or law firm is sufficiently close, personal, regular and continuous, such that one is held out to the public as of counsel for the other, the . . . relationship must be considered a single, de facto firm for purposes of [avoiding the representation of adverse interests].` (Id. at p. 1154, italics added, citing Rules Prof. Conduct, rule 3-310.) Similarly, because the relationship between a law firm and of counsel is close, personal, regular, and continuous, we conclude that a law firm and of counsel constitute a single, de facto firm, and thus a law firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by of counsel. I BACKGROUND In 1990, Attorneys Leonard Sands and Heleni Suydam began working together in the area of civil litigation. In March 1999, the law firm of Sands & Associates (Sands firm or firm) was established by Attorney Ada Sands, who, for many years, had been practicing in the areas of family law and estate and probate law. When the Sands firm was founded, Leonard Sands and Heleni Suydam became affiliated with the firm as of counsel. In that capacity, they represent[ed] the firm in its collection and appeal matters and the firm`s clients when they required civil litigation expertise. (We refer collectively to Leonard Sands and Heleni Suydam as Of Counsel.) 2

In 2002, Martin Juknavorian retained the Sands firm in a marital dispute. The retainer agreement, dated August 8, 2002, recited that any dispute concerning billing, the agreement, or the representation of Juknavorian would be submitted to binding arbitration. The agreement informed Juknavorian of his right under the Mandatory Fee Arbitration Act (MFAA) (Bus. & Prof. Code,

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