A recent Metropolitan News story, “C.A. Tosses Ruling Allowing Client to Cut Lawyer Out of Fee Award,” reports that an attorney who represents the prevailing plaintiff in a wage-and-hour case is entitled to have fees awarded to the lawyer personally, rather than the client, unless the parties’ fee agreement is to the contrary, the Court of Appeals ruled. Div. Three overturned Los Angeles Superior Court Judge Mary H. Strobel’s denial of a motion to allow attorney Henry M. Lee to personally enforce the $300,000 fee award he received for representing Ok Song Chang in a suit against A-Ju Tours, Inc. The court ordered the trial judge to determine whether the fee agreement between Lee and Chang bars Chang from enforcing the award in his own name.
The plaintiff was awarded $62,000 in unpaid wages and penalties. The fee award was added on motion filed by Lee, but before a writ of execution could be enforced, the defendant obtained an ex parte stay and a hearing was scheduled in order to determine whether the undertaking filed by defendant was sufficient to stay the fee award. The plaintiff fired Lee, and substituted herself in propria persona, apparently in order to settle with A-Ju directly. Lee then moved to amend the judgment to provide that attorney fees were awarded to, and could be enforced by, him personally. The judge denied the motion and Lee appealed the ruling.
Justice Walter Croskey wrote for the court, which rejected arguments that Lee lacked standing and that the case was inappropriate for writ relief. “Lee’s claim that the fee award should be made payable to him rather than Chang must be resolved before the appeal from the fee order proceeds any further so that he may have an opportunity to participate as a respondent in that appeal if he is successful on his claim,” the justice said.
“Construing Labor Code sections 1194, subsection (a) and 226, subsection (e) as requiring the payment of a statutory attorney fee award to the litigant rather than to the attorney, absent a contract providing for a different disposition of an attorney fee award, would diminish the certainty that attorneys who undertake such litigation will be fully compensated, contrary to the legislative intent of encouraging counsel to prosecute such litigation,” the justice said.
The published ruling is Henry M. Lee Law Corporation v. Superior Court (Chang) (pdf).