Farmers Insurance Exchange v. Law Offices of Conrado Joe Sayas, Jr.

Opinion by Judge TALLMAN; Dissent by Judge HUG.

Narendra and Bela Desai appeal the district court’s decision to award attorneys’ fees to their former attorneys, The Law Offices of Conrado Joe Sayas, Jr. (“Sa-yas”) and Quisenberry & Barbanel, LLP (“Q & B”). 1 Sayas and Q & B jointly represented the Desais in an insurance bad faith action. The Desais were unhappy with the outcome and discharged the two law firms. The firms then hired each other to litigate against the Desais in order to recover the contingent fee due under the initial client retainer agreement. The district court awarded each firm attorneys’ fees to cover the costs of litigating the underlying fee dispute against the De-sais. We have jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm.

I. FACTS AND PRIOR PROCEEDINGS.

Narendra and Bela Desai owned rental property in Santa Monica, California, that was partially insured by Farmers Insurance Exchange. The property was damaged by fire during,, the Northridge Earthquake of 1994. The Desais received disaster loans from the United States Small Business Administration (“SBA”) and the City of Santa Monica. They also filed a claim with Farmers for the insured portions…

Dissenting:

I respectfully dissent. The two firms involved jointly undertook the representation of the Desais and were joint parties to the retainer agreement with the Desais. The two firms were to receive a contingent fee and, thus, as joint parties to the initial contingent fee agreement they jointly sued the Desais to recover their contingent fee. Having won on that suit, they now seek to recover the attorneys’ fees that were occasioned in their suit to collect their contingent fee. (California law precludes them from recovering such fees if each represented its own interest. See Trope v. Katz, 11 Cal.4th 274 , 45 Cal.Rptr.2d 241 , 902 P.2d 259 (1995)). Trope prevents disparate treatment of pro se litigants that would result from allowing attorneys to recover their own fees when self-represented but no similar award to other litigants who choose to represent themselves. Id. at 252, 902 P.2d 259 . The fact that each law firm now claims to have been engaged to represent the other is a device that should not overcome the policy of Trope . It is-significant that there is no difference here in the legal position of either firm in their litigation concerning the contingent fee…