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Henry M. Lee Law Corporation v. the Superior Court of Los Angeles County

April 16, 2012

HENRY M. LEE LAW CORPORATION, PETITIONER,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, RESPONDENT; OK SONG CHANG ET AL., REAL PARTIES IN INTEREST.



(Los Angeles County Super. Ct. No. BC401329) ORIGINAL PROCEEDINGS in mandate. Mary H. Strobel, Judge. Petition granted and remanded with directions.

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

CERTIFIED FOR PUBLICATION

Henry M. Lee represented Ok Song Chang (Chang) as her attorney in employment litigation resulting in a $62,246.74 judgment in favor of Chang after a jury trial. The trial court also awarded Chang $300,000 in attorney fees under Labor Code sections 1194, subdivision (a) and 226, subdivision (e). Chang later substituted herself in propria persona for her former attorney. Henry M. Lee Law Corporation then moved to intervene in the action and to amend the postjudgment order awarding attorney fees to make the fee award payable to Henry M. Lee Law Corporation.*fn1 The trial court denied the motion.

Lee petitioned this court for extraordinary relief contending that he is entitled to intervene and that the attorney fee award belongs to and should be made payable to him. We conclude that Lee, as a person whose interests were injuriously affected by the order awarding attorney fees, was entitled to move to vacate the order and enter a new order awarding fees to him. We also conclude that an appeal from the denial of his motion is not an adequate legal remedy in these circumstances and that extraordinary writ review is appropriate. On the merits of the motion, we hold that an attorney fee award under Labor Code sections 1194, subdivision (a) and 226, subdivision (e) should be made payable to the attorney who provided the legal services rather than the client, unless their fee agreement otherwise provides. Because there remains an unresolved factual question as to the terms of the agreement entered into by Chang and Lee, the trial court, on remand, must reconsider its ruling on Lee's motion.

FACTUAL AND PROCEDURAL BACKGROUND

Chang filed a complaint against A-Ju Tours, Inc. (A-Ju Tours), and others in November 2003 alleging various counts for wage and hour violations and wrongful termination, among other counts. The case was tried before a jury in July 2010. Lee represented Chang as her attorney.

The jury returned a special verdict finding that Chang was an employee of A-Ju Tours and that A-Ju Tours had failed to pay minimum wages. It further found that A-Ju Tours did not fail to pay overtime wages and that Chang was not wrongfully forced to resign. The trial court denied a motion for new trial by A-Ju Tours, but granted in part its motion for judgment notwithstanding the judgment. The court entered a judgment in January 2011 awarding Chang $30,150 in unpaid minimum wages, a $1,920 waiting time penalty (Lab. Code, § 203), a $4,000 penalty for failure to provide an itemized wage statement (id., § 226), $15,075 in liquidated damages and $11,101.74 in prejudgment interest, all against A-Ju Tours. The total amount awarded in favor of Chang and against A-Ju Tours was $62,246.74. The judgment did not determine any entitlement to attorney fees. A-Ju Tours filed a notice of appeal from the judgment in February 2011 (No. B230858) and provided an undertaking. That appeal is still pending.

Chang and A-Ju Tours each moved for an attorney fee award. The trial court granted Chang's motion on April 25, 2011, awarding her $300,000 in fees under Labor Code sections 1194, subdivision (a) and 226, subdivision (e). The court also granted the motion by A-Ju Tours in part, awarding it $15,250 in fees under Labor Code section 218.5. The court amended the judgment by interlineation to include the attorney fee awards. (See Cal. Rules of Court, rule 3.1700(b)(4).) A-Ju Tours filed a notice of appeal from the postjudgment order awarding attorney fees in May 2011 (No. B232815).*fn2 That appeal is also still pending.

The clerk of the court issued a writ of execution on the attorney fee award on May 6, 2011. The trial court, however, granted A-Ju Tours's ex parte application to recall that writ on May 12, 2011, stayed enforcement of the attorney fee award and scheduled a hearing for May 20, 2011, to determine whether the undertaking was sufficient. On May 20, 2011, the court determined that the undertaking was insufficient and continued the stay for 10 days to allow A-Ju Tours to either increase the amount of the undertaking or provide a separate undertaking for the attorney fee award.*fn3 A-Ju apparently did neither.

Chang filed a substitution of attorney form in the trial court on May 25, 2011, substituting herself in propria persona for Lee. Chang signed the form, but the signature line for Lee was left blank. Chang later retained new counsel.

Lee, purportedly on behalf of Chang, filed an ex parte application on June 1, 2011, to vacate the stay of enforcement of the attorney fee award and reissue the recalled writ of execution.*fn4 A-Ju Tours opposed the application, arguing that Lee no longer represented Chang and had no authority to seek relief on her behalf. A-Ju Tours presented a written notice from Chang to Lee stating that she was discharging him as her attorney and asking him to sign a substitution of attorney form. The trial court denied the ex parte application, stating that Lee had failed to establish that he continued to represent Chang. The court also stated that if no additional undertaking was provided the stay had expired in accordance with the order of May 20, 2011.*fn5

Lee filed an ex parte application on his own behalf on June 7, 2011, seeking (1) leave to intervene in the action and (2) an amendment of the postjudgment order awarding attorney fees to make the fee award payable to him. The trial court scheduled a hearing on the motion for July 15, 2011. Chang and A-Ju Tours both opposed the motion. Chang filed a declaration stating that she had notified Lee that he no longer represented her.

The trial court concluded that the pending appeals from the judgment and the postjudgment order awarding attorney fees deprived it of jurisdiction to grant the requested relief. The court stated further that even if it had jurisdiction, the motion was denied on the merits because Labor Code sections 1194, subdivision (a) and 226, subdivision (e) both unambiguously provide for an award of fees payable to the employee rather than her attorney. The court therefore denied the motion in its entirety on July 15, 2011.

Lee commenced a separate action against Chang by filing a complaint against her on July 21, 2011 (Super. Ct. L.A. County, No. BC465694), alleging counts for (1) breach of a written contract, seeking reimbursement of costs and expenses advanced to prosecute the present action, and (2) declaratory relief, seeking a declaration that the $300,000 attorney fee award belongs to Lee and cannot be compromised or settled by Chang. That action is pending and is not at issue in this writ proceeding.

In addition, Lee petitioned this court for extraordinary relief, challenging the denial of his motion. In light of the important issues raised and their potential impact on the pending appeals, we issued an order ...


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