Second District Finds Actual Controversy in Declaratory Judgment Action Between Two Former Co-Counsel Relating to Distribution of Attorneys Fees
In a dispute over the distribution of attorneys fees between two former co-counsel in a class action lawsuit, the Court of Appeal for the Second District reversed a trial court’s denial of relief in a declaratory action. Leonard Carder, LLP v. Patten, Faith & Sandford, No. B221940, — Cal.Rptr.3d —-, 2010 WL 3961275 (Cal. Ct. App. 2d Dist. Oct. 12, 2010).
Plaintiff and appellant Leonard Carder, LLP filed a declaratory relief action against his former co-counsel Patten, Faith & Sandford (Patten) regarding the distribution of attorney fees awarded in a stipulated judgment in a class action lawsuit. Id. *1. The trial court entered a judgment denying all relief to Leonard Carder on the basis the complaint did not present a case or controversy and that jurisdiction had been reserved with the judge who approved the class action settlement. Id. The Second District reversed, holding that the complaint did articulate a justiciable case or controversy, and the class action court specifically declined to retain exclusive jurisdiction over the distribution of attorney fees. Id.
Leonard Carder and Patten were appointed class counsel in an action tried in 2004 before the Honorable Howard J. Schwab, with the bulk of the work on behalf of the plaintiff class performed by Leonard Carder. Id. The plaintiff class was determined to be entitled to an award of approximately $14.4 million. A loadstar chart in support of the motion for attorneys fees showed 11,414 hours worked by Leonard Carder and 673 by Patten. Id. The loadstar chart justified total fees of $10,879,272 for Leonard Carder and $373,040 for Patten. Id. Judge Highberger signed the parties’ stipulation to reasonable attorney fees and costs in the total amount of $12,475,000 to be paid within 45 days to Leonard Carder “as trustees for distribution to all counsel in accordance with the approved stipulation.” Id. The final provision in the stipulated judgment was that “[t]his court shall retain jurisdiction over the parties to enforce the terms of this Stipulated Judgment.” Id. *2. Judge Highberger orally stated that if there were unresolved issues regarding distribution of the fees, “you’ll find some other forum to resolve them. They don’t automatically come to me as a matter of exclusive jurisdiction.” Id. All counsel expressed agreement with the court’s statement regarding exclusive jurisdiction. Id. Read the rest of this entry »