Cazares v. Saenz

In Cazares v. Saenz (1989) 208 Cal.App.3d 279, two attorneys agreed to share a contingent fee, but the lead attorney who had performed substantial work on the case could not continue practicing law because he had accepted a judicial appointment. The appellate court concluded the lead lawyer's inability to complete the contract discharged all obligations under the agreement, subject only to the lead attorney's right to recover the reasonable value of the services rendered before discharge. (Id. at p. 286.) On this issue, the court held the incapacitated attorney was entitled to a "pro rata share" of the ultimate recovery, reflecting both the inherent risks of a contingent fee and the value of the legal services rendered. (Id. at pp. 288-289.) Attorney Saenz associated with the law firm of Cazares & Tosdal, to represent the plaintiff in a personal injury action pursuant to a contingency fee agreement. Saenz and Cazares orally agreed to a 50/50 split of the contingency fee. (Cazares, at pp. 282-283.) In a footnote, Cazares noted that at the time of the attorney's association agreement, the Rules of Professional Conduct provided that any agreement between lawyers to divide a fee must be consented to in writing by the client after full disclosure. However, since the rule was for the benefit of the client, and the client was not a party to the appeal, the Court of Appeal did not address the parties' failure to comply with that requirement. (Cazares, supra, 208 Cal.App.3d at p. 283, fn. 5.) The Cazares & Tosdal partnership dissolved and Cazares, the lead attorney, who had performed substantial work on the plaintiff's case, could not continue practicing law because he was appointed to the bench. Saenz, with the help of two new lawyers, Khoury and Mazella, obtained a favorable settlement for the plaintiff, entitling Saenz to a fee of approximately $366,000. Saenz offered Cazares $40,000 for his work on the case; Cazares claimed Cazares & Tosdal was owed more than $183,000. A referee determined Saenz was entitled to deduct the $47,000 paid to Khoury and Mazella before calculating the 50 percent due Cazares & Tosdal, and judgment for Cazares & Tosdal was entered in the amount of $159,833. (Id. at pp. 283-284.) The Court of Appeal concluded that the inability of Cazares to complete the contract after his appointment to the bench discharged all obligations under the contract, entitling him to recover the reasonable value of the services he rendered before the discharge. (Id. at p. 286.) In Cazares v. Saenz (1989) Phil Saenz, an inexperienced lawyer representing a Mexican national in a personal injury case, retained cocounsel, Roy Cazares, who spoke Spanish and had worked in the Mexican-American community. (Cazares, supra, 208 Cal.App.3d at pp. 282-283.) Cazares, however, was a partner in a two-man law firm, Cazares & Tosdal. Saenz did not feel comfortable with Cazares's partner and was not willing to work with him. (Ibid.) Cazares and Saenz agreed to a 50/50 split of the contingency fee. (Id. at p. 283.) Cazares worked on the case for two and one-half years before the Cazares & Tosdal partnership was terminated and another year before he was appointed to the bench. (Ibid.) He urged Saenz to accept his former partner's help, but Saenz refused. (Id. at pp. 283-284.) After Saenz settled the case, the defunct partnership sought one-half of the attorney fees Saenz collected. (Id. at p. 284.) Cazares is a fight for fees between lawyers, both of whom had performed significant legal work on a contingency case. Dismissing this fundamental foundational fact that the client made no claim for fees, Blackhurst cites legal principles purportedly derived from Cazares inapplicable to the entirely different situation where, as here, there is only one law firm making a claim for a fee under a contract for a contingency fee. Certainly, when multiple attorneys seek compensation from a pot capped by the contingency fee agreement, their compensation must be apportioned between them, and according to the court in Cazares, they are entitled to a pro rata share of the total fee. (Cazares, supra, 208 Cal.App.3d at p. 289.) In that context, a lawyer who has partially performed is entitled to a pro rata share.The Cazares court concluded that Mr. Cazares's inability to complete the agreement discharged all obligations under the agreement, subject only to Mr. Cazares's right to recover the reasonable value of the services rendered before his discharge. (Id. at p. 282.) The Cazares court stated that on remand, the fees should be calculated pro rata, "where the numerator is the value of the legal services rendered by the particular attorney or firm at issue and the denominator is the aggregate value of all the legal services rendered by any attorney in the case." (Id. at p. 288.)