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Don S. Lemmer v. Jeffrey Charney et al

May 5, 2011

DON S. LEMMER, PLAINTIFF AND APPELLANT,
v.
JEFFREY CHARNEY ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County. Laura A. Matz, Judge. (Los Angeles County Super. Ct. No. EC049369)

The opinion of the court was delivered by: Grimes, J.

CERTIFIED FOR PUBLICATION

Affirmed.

This is an appeal from a judgment of dismissal after the trial court sustained a demurrer to the first amended complaint without leave to amend in an action by an attorney against a former client and his wife for fraud and intentional interference with prospective advantage. The gist of the action is that the attorney agreed to change the terms of his compensation from the payment of an hourly fee to a contingency fee in reliance on his client's fraudulent promise to take the case to trial or settlement, the wife conspired to defraud the attorney, and she also interfered with the attorney's prospective economic advantage by supporting her husband's decision to abandon his lawsuit. Finding public policy articulated in well-established California Supreme Court authority bars this action, we affirm the judgment.

BACKGROUND

Plaintiff Don Lemmer, doing business as the Lemmer Law Firm, represented Jeffrey Charney (defendant) in a lawsuit against defendant's former employer, Teleflora LLC. Defendant had been employed as Teleflora's executive vice president and chief marketing officer in Los Angeles for about five months in 2004. Before filing suit, defendant signed an attorney-client fee agreement that provided defendant would pay plaintiff an hourly rate for legal services rendered in the employment dispute with Teleflora. Plaintiff then filed suit on behalf of defendant against Teleflora, its owners, and an affiliate for breach of contract, fraud and violations of the Labor Code. Teleflora cross-complained against defendant for breach of his employment contract, fraud and other causes of action. After several months, defendant asked plaintiff to make a new contingency fee agreement. The parties entered a new contingency fee agreement after defendant promised to take the case to trial or settlement to ensure plaintiff was paid for his legal representation.

However, defendant did not intend to take the case to trial if a settlement could not be reached, because he knew Teleflora's owner was extremely litigious and vindictive and would appeal any judgment in favor of defendant to drag out the litigation and exhaust defendant's resources. Defendant did not disclose his true intent to plaintiff, who relied on defendant's promise to proceed with the case to either settlement or trial. Plaintiff believed defendant had a strong likelihood of prevailing on his claims, for which plaintiff expected to recover contractual and statutory attorney fees and an additional contingency fee. If plaintiff had known defendant would not go to trial against Teleflora and its owners, plaintiff would not have agreed to the contingency fee arrangement.

Less than a month before trial, defendant and his wife called plaintiff. Defendant told plaintiff he was afraid to go to trial and instructed plaintiff to settle the case as soon as possible. Plaintiff objected and reminded defendant he had a strong case that should result in a judgment of several hundred thousand dollars for defendant, as well as attorney fees for plaintiff. Defendant's wife responded, "You are our attorney, and you will do what we tell you to do." Consequently, plaintiff initiated settlement discussions with counsel for Teleflora, who offered only a "walk away" settlement with each side receiving nothing and bearing their own fees and costs. Plaintiff conveyed this offer to defendant and his wife, who directed plaintiff to accept it. Plaintiff reminded defendant of his promise to ensure plaintiff was paid for his legal services. Defendant responded that he was "sorry about the financial hardship this is causing you and your family, but there is nothing I can do." Plaintiff settled the Teleflora lawsuit for a "walk away" agreement and dismissed the case. Defendant never paid plaintiff a reasonable attorney fee for services rendered in the Teleflora lawsuit.

Plaintiff sued defendant and his wife for conspiracy to defraud plaintiff by falsely promising to go to trial against the Teleflora defendants to induce plaintiff to enter the contingency fee agreement. Plaintiff also sued defendant's wife for interference with prospective economic advantage, claiming she induced defendant to end the Teleflora lawsuit and thereby interfered with plaintiff's prospective economic advantage from the attorney-client relationship he had with defendant. The trial court sustained the demurrer to the original complaint with leave to amend and thereafter sustained the demurrer to the first amended complaint without leave to amend.

DISCUSSION

1. Standard of Review

"Because this case comes to us on a demurrer for failure to state a cause of action, we accept as true the well-pleaded allegations in plaintiffs' first amended complaint. ' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed." [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]' " (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) We likewise accept facts that are reasonably implied or may be inferred from the complaint's express allegations. (Curcini v. County of Alameda (2008) 164 Cal.App.4th 629, 633, fn. 3.)

"On appeal from a dismissal after an order sustaining a demurrer, we review the order de novo, exercising our independent judgment about whether the complaint states a cause of action as a matter of law. [Citations.] When the trial court sustains a demurrer without leave to amend, we must also consider whether the complaint might state a cause of action if a defect could reasonably be cured by amendment. If the defect can be cured, then the judgment of dismissal must be reversed to allow the plaintiff an opportunity to do so. The plaintiff bears the burden of demonstrating ...


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