Procedural Posture

Plaintiff consultant, a non-lawyer, sued defendants, a lawyer and his firm, for breach of contract, alleging failure to honor an agreement to share attorney fees in exchange for consulting services in class actions against a bank for which the consultant had worked. The Superior Court of Marin County, California, granted summary judgment to the lawyer after finding as a matter of law that the agreement was unenforceable. The consultant appealed.

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Overview

In light of public interest concerns, and because there was no dispute that the agreement violated Cal. R. Prof. Conduct 1-320(A), the court agreed with the trial court that the doctrine of illegality applied facially to the fee-sharing agreement. The court was unpersuaded by the consultant’s argument that the agreement was illegal only as to the lawyer because the consultant was not a member of the bar and thus was not subject to the rule. The court also agreed that the parties were in pari delicto. The consultant’s agent, who negotiated the agreement, was a member of the bar and was directly bound by the rule. His knowledge of the illegality was imputed to the consultant under Cal. Civ. Code § 2332. It was proper to make the determination as a matter of law based on the consultant’s complicity in hiding the deal. The summary judgment record revealed that special efforts were taken by all to shield the consultant from the details of the fee-sharing arrangement to keep the deal secret from the opposing party, as well as the lawyer’s partners. The consultant denied in a deposition that he expected to receive compensation, and the law would not countenance a reversal of position.

Outcome

The court affirmed the judgment of the trial court. Costs on appeal were awarded to the lawyer.