Quantum Meruit Attorney Fees in California

Generally, an attorney working on a contingency fee basis who withdraws from representing the client is not entitled to quantum meruit recovery for the value of his services unless the withdrawal was mandated by ethical rules. (Estate of Falco (1987) 188 Cal.App.3d 1004, 1016 (Falco); Rus, Miliband & Smith v. Conkle & Olesten (2003) 113 Cal.App.4th 656, 674-678 (Rus).) In such cases, "the attorney has the burden of proof to show: (1) counsel's withdrawal was mandatory, not merely permissive, under statute or State Bar rules; (2) the overwhelming and primary motivation for counsel's withdrawal was the obligation to adhere to these ethical imperatives under statute or State Bar rules; (3) counsel commenced the action in good faith; (4) subsequent to counsel's withdrawal, the client obtained recovery; (5) counsel has demonstrated that his work contributed in some measurable degree towards the client's ultimate recovery." (Falco, at p. 1016.) Falco left open the possibility that quantum meruit fees could be awarded in permissive withdrawal cases, subject to a heightened level of scrutiny. (Falco, supra, 188 Cal.App.3d at p. 1016, fn. 12.) However, Falco held that a client's failure to cooperate based on rejection of a good settlement offer, mutual animosity between the attorney and client, or a complete breakdown in the attorney-client relationship, did not come within this exception. (See Rus, supra, 113 Cal.App.4th at p. 674, citing Falco, at pp. 1010-1011.) Mandatory and permissive withdrawal are addressed in subparagraphs (B) and (C) of rule 3-700 of the State Bar Rules of Professional Conduct in relevant part as follows: "(B) Mandatory Withdrawal. A member representing a client before a tribunal shall withdraw from employment . . . if: (1) The member knows or should know that the client is bringing an action or . . . asserting a position in litigation . . . without probable cause and for the purpose of harassing or maliciously injuring any person; or (2) The member knows or should know that continued employment will result in violation of these rules or of the State Bar Act; or (3) The member's mental or physical condition renders it unreasonably difficult to carry out the employment effectively. (C) Permissive Withdrawal. If rule 3-700(B) is not applicable, a member may not request permission to withdraw in matters pending before a tribunal . . . unless such request or such withdrawal is because: (1) The client . . . (d) engages in conduct that renders it unreasonably difficult for the member to carry out the employment effectively, or . . . (2) The continued employment is likely to result in a violation of these rules or of the State Bar Act; or . . . (5) The client knowingly and freely assents to termination of the employment; or (6) The member believes in good faith, in a proceeding pending before a tribunal, that the tribunal will find the existence of other good cause for withdrawal."