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James J. Little v. Amber Hotel Company

December 22, 2011

JAMES J. LITTLE, PLAINTIFF AND RESPONDENT,
v.
AMBER HOTEL COMPANY, DEFENDANT AND APPELLANT.



APPEAL from a judgment of the Superior Court of Los Angeles County, Victor Chavez, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC413626)

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

CERTIFIED FOR PUBLICATION

Respondent James J. Little asserted claims against appellant Amber Hotel Company (Amber) for tortious interference with contract, alleging that Amber impaired Little's lien on an attorney fee award. Amber challenges the judgment in Little's favor, contending that Little's former client nullified the fee award through a settlement, and that the damages awarded to Little fails as a matter of law. We discern no reversible error and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Prior Action

In August 2004, Amber initiated a lawsuit against Frank Martini and his brother, Satanand Sharma, together with several businesses they controlled (collectively, the Martini parties).*fn1 In the action, Amber asserted claims for breach of contract and fraud, alleging that the Martini parties failed to pay a broker's commission owed to Amber in connection with the sale of a hotel. The claims were based in part on a listing agreement and a sales agreement, each of which contained an attorney fee provision.

In October 2004, Martini and Sharma hired attorney Little to provide representation in the action. They executed a contract entitled "Retainer Fee Agreement and Attorney's L[ie]n," which provided in pertinent part: "Client agrees to pay Attorney $275.00 per hour, $175.00 per hour of which will be deferred by Attorney to be held as [a] lien and collected in full against any attorney[] fee award made by the Court in favor of Client at the conclusion of this case. In this regard, Client specifically acknowledges, agrees, gives and assigns to Attorney an attorney's lien on any sum to which Client may become entitled to secure Attorney's compensation for said deferred fees. Given that there exists a risk that Client will not be successful in this case (such that there is the further risk that Client will not be entitled to any attorney[] fee award), Client agrees that in the event there is an attorney[] fee award in favor of Client, Attorney is entitled . . . to keep one hundred percent (100%) of any attorney[] fees awarded Client without deduction for the $100.00 discounted hourly rate to which Attorney is entitled . . . . Client agrees that if there is no recovery to which the above-referenced lien attaches Client remains responsible for the full amount of the deferred fees."

Following a trial, on December 3, 2007, judgment was entered in favor of the Martini parties and against Amber on Amber's claims. The judgment stated: "The court reserves jurisdiction to determine whether to award costs and to make an attorney fee award and, so, to determine the amount of that award." After the trial court denied Amber's new trial motion, Amber noticed an appeal from the judgment and post-judgment rulings on February 29, 2008.

While the appeal was pending, on March 24, 2008, the trial court awarded the Martini parties $152,700 in attorney fees and $8,669.52 in costs. On May 9, 2008, the court amended the December 2007 judgment to include the awards for attorney fees and costs. Amber filed no separate notice of appeal from these awards.

Following settlement negotiations between Amber and the Martini parties, on June 11, 2008, notices were filed acknowledging satisfaction of the December 2007 judgment, as modified by the March 2008 fee award order. The notices stated: "The judgment creditor has accepted payment or performance other than that specified in the judgment in full satisfaction of the judgment." On June 17, 2008, Amber abandoned its appeal.

B. Underlying Action

1. Complaint

On May 18, 2009, Little initiated the underlying action against the Martini parties and Amber.*fn2 His complaint asserted claims for breach of contract and quantum meruit against the Martini parties, and claims for intentional interference with contract, constructive trust, and conversion against Amber. The complaint alleged the following facts: In mid-March 2008, after Little had secured the December 2007 judgment and applied for an award of attorney fees, he learned that the Martini parties and Amber were negotiating a settlement and informed them of his lien. Nonetheless, after the trial court issued the fee award, the Martini parties and Amber entered into a settlement under which Amber agreed to dismiss its appeal regarding the December 2007 judgment in exchange for Martini's abandonment of the fee award. To hide the settlement, neither the Martini parties nor Amber served Little with the acknowledgments of satisfaction of the judgment.

2. Trial

The jury trial on Little's claims occurred in June 2010.

a. Little's Evidence

Little testified as follows: At the time of trial, he had been practicing law for 28 years. Sharma was among his first clients. When Martini and Sharma sought to engage Little, he advised them to seek independent legal advice with respect to the lien provisions of the proposed retainer agreement. According to Little, he offered to defer a portion of his fees because Martini and Sharma had "cash-flow problems," and he hoped that a fee award would provide an alternative source of payment for his fees. On October 14, 2004, Martini and Sharma executed the retainer agreement.

After Amber noticed its appeal from the December 2007 judgment, Little decided not to represent the Martini parties during the appeal, as his retainer agreement did not require him to do so, and the Martini parties lacked the funds to pay him for continued representation. However, when Little tried to withdraw his representation regarding the appeal, the appellate court informed him that he remained counsel of record.

In March 2008, after Little requested a fee award on behalf of his clients, Martini told Little that Amber had proposed to settle the action for $75,000. Martini also said that he intended to give Little one-third of the settlement funds. Little reminded Martini that his fee agreement contained a lien provision, told Amber's counsel, Julian Pollok, that he had a lien against any fee award, and served formal notices of lien in the action. Later, Little learned that Martini was considering a settlement that encompassed the judgment and the Martini parties' potential malicious prosecution action against Amber, but was assured that Martini "was protecting and preserving" Little's attorney fees.

Little heard nothing more regarding settlement until June 2008, when the trial court sent him copies of the Martini parties' acknowledgments of satisfaction of judgment, prepared and filed by Pollok, and a copy of Amber's dismissal of the appeal. No party served these notices upon Little, even though he was a counsel of record in the trial action and on appeal.

Little testified that as a result of the settlement, he was unable to recover $190,684.06 in fees owed under the retainer agreement, comprising the $152,700 fee award and approximately $37,984 in other unpaid fees. According to Little, Amber's settlement with the Martini parties denied him the benefit of the fee award and prompted them not to pay his outstanding deferred fees. Little further stated that he sought to recover the $190,684.06 in unpaid fees solely from Amber because the Martini parties would not have breached the retainer agreement "but for the false representations made to them" by Amber.

Little also testified that he had incurred additional damages due to the loss of what he termed "the Sharma account." Although he remained "amicable" with Martini and Sharma, they no longer employed him. Prior to the settlement, they had paid him an average of $150,000 per year for at least 8 years, resulting in annual net profits of $82,000. In view of his age, he expected his relationship with Martini and Sharma to have continued for 12 years, resulting in lost future profits totaling $984,000.

Martini also testified on Little's behalf.*fn3 According to Martini, prior to the action involving Amber, he employed Little to provide legal services for 10 or 11 years at an annual rate of approximately $150,000. In hiring Little to provide representation against Amber, Martini and his brother executed the October 2004 retainer agreement with the intention of "transfer[ring] ownership" of any fee award to Little. During the action involving Amber, Little advised Martini that he had a potential claim for malicious prosecution against Amber.

In early 2008, Martini was contacted by Stephen Post, Amber's president. Post offered to pay the Martini parties a sum of money and dismiss Amber's appeal in exchange for a "dismissal" of the December 2007 judgment and abandonment of any potential malicious prosecution action. As the litigation involving Amber threatened high litigation expenses, Martini explored a settlement with Amber. During the negotiations, Pollok maintained that the December 2007 judgment was certain to be reversed on appeal, and that Martini would ultimately be subject to a judgment for damages exceeding $1 million. When Martini informed Little that Post had offered $75,000 to settle the litigation, Little reminded him of the attorney lien and noted that the fee award Little sought was likely to exceed the offer. According to Martini, in negotiating the settlement, he repeatedly raised the issue of Little's lien, and never intended to release it.

At some point, Martini entered into an oral settlement agreement with Post. Under its terms, Amber was to dismiss its appeal and give Martini $100,000 "in a quiet way," that is, the payment was not be disclosed to anyone, including Little. In exchange, Martini agreed not to pursue a malicious prosecution action against Amber. According to Martini, Post and Pollok told him that the settlement agreement did not concern the attorney fee award; in addition, Post promised that Amber "would take care of" Little's claim to the fee award. As a result of these assurances, Martini and the other Martini parties executed the acknowledgments of satisfaction of judgment. On March 24, 2008, at Post's direction, Martini made a nighttime drive to Malibu, where Post gave him $100,000 in cash.

Following the settlement and Little's lawsuit regarding the fee award, Martini no longer hired Little, even though he had no hard feelings toward his former counsel. According to Martini, his decision not to rehire Little was based on Little's action against him; in addition, Martini had ...


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