Preview
1 WILLIAM A. LAPCEVIC (SBN 238893)
2/7/2022
JUSTIN S. DRAA (SBN 253688)
2 DIBENEDETTO LAPCEVIC & DRAA, LLP
1101 Pacific Avenue, Suite 320
3
Santa Cruz, California 95060
4 Tel.: (831) 325-2674
Fax: (831) 477-7617
5 Email: wal@dld-law.com
Email: jdraa@dld-law.com
6
Attorneys for Plaintiff JEFFREY F. RYAN
7
8 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 FOR THE COUNTY OF SAN MATEO
10 CIVIL DIVISION
11 JEFFREY F. RYAN, Case No. 21-CIV-04391
12 Plaintiff, REPLY TO OPPOSITION TO
vs. DEMURRER TO VERIFIED CROSS-
13
COMPLAINT
14 WILLIAM CARLOS LEET, an individual;
and DOES 1-10. (CCP §§ 92, 430.10, 430.30)
15
Defendants. Date: February 15, 2022
16 Time: 2:00 P.M.
Dept.: 4
17
18 AND RELATED CROSS ACTION Assigned for All Purposes to
Hon. Nancy L. Fineman, Dept. 4
19
20
21 Plaintiff and Cross-Defendant JEFFREY F. RYAN (“RYAN”) submits the within Reply to
22 the Opposition (“OPP.”) of Defendant and Cross-Complainant WILLIAM CARLOS LEET
23 (“LEET”) to RYAN’S Demurrer to LEET’S Verified Cross-Complaint (“VCC.”).
24 I. CASE OVERVIEW
25 The Complaint filed by RYAN on 8/17/2021 alleges that in 2019 LEET agreed to perform
26 legal services in a case RYAN had been handling since 2017 under a hybrid, half-hourly-half-
27 contingency-fee agreement with the clients, but which the clients had recently convinced RYAN
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 1 of 11
1 to convert to a straight contingency fee basis. (COMP. ¶¶ 7 – 10.)
2 Attached as “Exhibit A” to RYAN’S Complaint is a true copy of the revised fee agreement
3 with RYAN’S clients, with the terms of his fee-splitting agreement with LEET spelled out in ¶5,
4 page 2 of 6, of that March 1, 2019, fee agreement. The Complaint, at ¶11, quoted the terms of the
5 fee-splitting agreement provisions of that fee agreement. RYAN alleges that after the clients read
6 and executed the fee agreement-cum-fee-splitting agreement, he sent a copy to LEET. (COMP, ¶
7 12.)
8 RYAN further alleges that at some point during the litigation of the clients’ case, LEET
9 essentially disappeared, refusing to perform the services he had committed to perform, which
10 necessitated the hiring by RYAN of another attorney and a paralegal to pick up the slack, which
11 cost the clients an additional $100,000 that had not been contemplated by the March 1, 2019, straight
12 contingency agreement. (COMP. ¶¶ 14 – 16.)
13 LEET reappeared coincidental with partial settlement (for $2,975,000) of the clients’ case
14 after 3 and ½ weeks of bench trial, tried by RYAN alone, and none of which was attended by LEET,
15 who proceeded to demand $357,000 as his share of RYAN’S contingency fee. (COMP. ¶¶ 18 – 19.)
16 RYAN sues for breach of contract and declaratory relief. (COMP, ¶¶ 23 – 35.) 1
17 LEET’S VCC alleges that while RYAN truthfully advised him that the March 1, 2019, fee
18 agreement with the clients provided that RYAN’S 40% contingency fee would be calculated after
19 crediting the clients for the amounts they had paid under the initial half-hourly-half-contingency fee
20 agreement, RYAN had intentionally misrepresented to LEET the extent of those credits. (VCC, ¶¶
21 1 – 8.)
22 Specifically, LEET alleges that RYAN told him on March 11, 2019 that the revised fee
23 agreement with the client, with the fee-split contained there had already been done [VCC, ¶34]; that
24 the only credits clients would receive against RYAN’S 40% contingency fee would be for the
25
26
27 1 The Court’s docket reflects that RYAN dismissed without prejudice his Third Cause of Action
28 for Civil Extortion on August 30, 2021.
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 2 of 11
1 amounts clients had paid to attorney Jennifer Hagan, which LEET alleges RYAN represented to be
2 in the neighborhood of $200,000; that when LEET expressed hesitation, RYAN agreed that the
3 Hagan credit would come out of RYAN’S share of the fee-split, which the parties agreed would be
4 2/3 to RYAN, 1/3 to LEET. (VCC, ¶¶3, 35 - 40.)
5 LEET alleges that his fee-splitting agreement with RYAN is in writing, consisting of emails
6 they exchanged, and that RYAN confirmed the particulars on April 2, 2019. (VCC, ¶¶ 31, 42.) [NB.
7 The dates set forth in the VCC, as recounted in this and the preceding paragraph are critically
8 important because they show that LEET knew on March 11, 2019 that the revised fee agreement
9 with the clients, containing the fee-split terms, had been done before RYAN allegedly agreed to
10 LEET’S proposal regarding the hourly fee credits issue, and most certainly it had “been done” before
11 LEET confirmed it on April 2, 2019.]
12 LEET alleges that RYAN represented that the clients had approved their fee-splitting
13 agreement in a writing that complied with Rules of Professional Conduct (“RPC”) rule 1.5.1. (VCC,
14 ¶ 6.)
15 LEET alleges that RYAN further represented that the only “lien” against the 40%
16 contingency fee was the credit due to the clients for the payments made to Jennifer Hagan, but that,
17 in fact, the total credits due to the clients for payments to all attorneys and paralegals before the fee
18 agreement was converted to straight contingency amounted to $650,000, which RYAN concealed
19 from LEET. (VCC, ¶¶ 7, 9.) LEET further appears to assert his claim to 1/3 of the 40% contingency
20 fee that might be due on any recovery against the remaining party, or parties in the clients’ case.
21 (VCC, ¶ 11.)
22 LEET alleges that he does not contend that clients are entitled to anything less than what is
23 set forth in the March 1, 2019, fee-agreement-cum-fee-splitting-agreement, a true copy of which he
24 appends to his VCC as separately-filed Exhibit B. (VCC, ¶ 18.) But LEET further alleges that RYAN
25 did not provide LEET with a copy of that March 1, 2019, writing “at any time proximate to this
26 [April 2, 2019] discussion.” (VCC, ¶44.)
27
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 3 of 11
1 LEET alleges that he appeared in the underlying case in March 2019, and then “noticed” in
2 August 2021 on the case docket that a partial settlement had been approved by the Court. (VCC, ¶¶
3 57 – 58.) LEET cross-complains for fraudulent misrepresentation, fraudulent concealment,
4 promissory estoppel, anticipatory breach of contract, and unfair business practices.
5 (VCC, ¶¶74 – 100.)
6 II. SUMMARY OF REPLY TO OPPOSITON TO DEMURRER
7 It is long-settled that “ ‘[a] void contract, a contract against public policy or against the
8 mandate of the statute, may not be made the foundation of any action, either in law or in equity.’
9 (Chateau v. Singla (1896) 114 Cal. 91, 94, 45 P. 1015; Hooper v. Barranti (1947) 81 Cal.App.2d
10 570, 574, 184 P.2d 688.).” (Lawler v. Jacobs (2000) 83 Cal.App.4th 723, 737; emphasis added.)
11 Thus, for example, a cause of action for fraud based on nonperformance of a contract that
12 is unenforceable as contrary to public policy is an impermissible attempt” … to accomplish by
13 indirection what [that public policy] prohibits.” (Cf. Lawler, supra, at 738.) (See, also, Bank of
14 Orland v. Harlan (1922) 188 Cal. 413, 422 [ “It is immaterial whether the facts showing the
15 unenforceable nature of the contract appear from the pleadings or not, where the evidence discloses
16 the relations of the parties to the transaction are illegal and against public policy the court will act
17 on its own motion. [citations omitted.].”).
18 A fee-splitting agreement between attorneys must be written, and its terms must be fully
19 disclosed to the clients, who must give their written consent thereto. (RPC 1.5.1; Chambers v. Kay
20 (2002) 29 Cal.4th 142, 156; Margolin v. Shemaria (2000) 85 Cal. App.4th 891, 901-902.) A fee-
21 splitting agreement that does not comport with Rule 1.5.1 requirements is not only violative of the
22 Rules of Professional Conduct, but “…is unenforceable as against public policy if the client did not
23 give informed, written consent to the fee-sharing agreement.” (Reeve v. Meleyco (2020) 46
24 Cal.App.5th 1092, 1098.) (Emphasis added.)
25 Even where the lawyer later accused by the other attorney of malfeasance promises that he
26 will secure the client consent and then fails to do so, non-compliance with Rule 1.5.1 is not excused.
27 (Margolin, surpa, at 902.) Notably, the court specifically stated that one lawyer's reliance on another
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 4 of 11
1 lawyer's promise to obtain a particular fee-sharing consent “was not sufficiently reasonable to afford
2 ... relief from the requirements of [then] rule 2-200 [now rule 1.1.5].”
3 (Margolin at 901.)
4 In Chambers, “…the court held an attorney can protect his or her interests, and at the same
5 time fulfill the beneficial purposes of the rule, acting in the client's best interests, by requesting proof
6 of the client's written consent to the fee division. (Id. at pp. 162-163, 126 Cal.Rptr.2d 536, 56 P.3d
7 645.).” (Reeve v. Meleyco, supra, 46 Cal.App.5th at 1098.)(Emphasis added.)
8 Indeed, “…a noncompliant agreement generally cannot be enforced by an attorney.
9 Chambers, Margolin, and Mark [v. Spencer (2008) 166 Cal.App.4th 219, 299] uniformly
10 recognize that an attorney cannot enforce a fee-sharing agreement if that attorney could have
11 obtained written client consent as required by rule 2–200 [now rule 1.5.1], but failed to do so.”
12 (Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler (2012) 212 Cal.App.4th 172, 181.) (Emphasis
13 added.)
14 It is not in question that the Ryan disclosed the terms of his fee-splitting agreement with
15 LEET to his clients and obtained their informed written consent. LEET does not plead that he fully
16 disclosed the terms of his fee-splitting agreement with RYAN to the clients and obtained their
17 informed written consent. Nor does LEET plead that RYAN in any way prevented LEET from
18 obtaining a copy of the fee-splitting agreement that the clients had approved, or from presenting to
19 the clients for their approval the fee-splitting agreement LEET wanted them to approve. 2 Incredibly,
20 despite the further negotiations with RYAN about the credits issue AFTER RYAN had advised
21 LEET that the revised agreement had already been sent to the clients, LEET does not plead that he
22 ever asked RYAN, or the clients, for a copy of the revised fee-agreement-cum-fee-splitting
23 agreement to make sure that is comported with what he alleges he and RYAN later agreed to.
24
25
26
2 The sole authority cited by counsel for an exception to strict compliance with the client consent
27 requirement is where the defendant-attorney took affirmative steps to prevent the plaintiff-attorney
from obtaining that consent. (Barnes, supra, at 12 Cal.App. 4th at 185–186.)
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 5 of 11
1 The failure by LEET to plead facts supporting the client disclosure and consent predicates
2 for a valid, enforceable fee-splitting agreement means that RYAN’S demurrer must be sustained.
3 (Cf. Chambers v. Kay, supra, 29 Cal.4th 142, 161 [“…it would be absurd for this or any other court
4 to aid [Leet] in accomplishing a fee division that would violate the rule's explicit requirement of
5 written client consent and would subject [Leet] to professional discipline.”].)
6 Finally, LEET’S attempt at hair-splitting argument, i.e., since both his and RYAN’S
7 agreements called for a 2/3 – 1/3 split, which the clients approved, and the amount of the credits to
8 be applied before calculating the overall 40% attorney fee had no effect on the clients’ net recovery
9 (since under LEET’S version those credits would be charged in toto against RYAN’S 2/3 share), it
10 was therefore immaterial, or not really a “term” that required disclosure and consent, runs contrary
11 to the fundamental purpose of Rule 1.5.1:
12 “Just as a client has a right to know how his or her attorney's fees will be
Determined, he or she also has a right to know the extent of, and the basis for,
13 the sharing of such fees by attorneys. Knowledge of these matters helps
assure the client that he or she will not be charged unwarranted fees just
14
so that the attorney who actually provides the client with representation
15 on the legal matter has ‘sufficient compensation’ to be able to share fees
with the referring attorney. Disclosure of these matters to the client should
16 be in writing because the client should not be expected to mentally retain
such information throughout the pendency of the case.” (Margolin,
17 supra, 85 Cal.App.4th at p. 903, 102 Cal.Rptr.2d 502.) Moreover, “[r]equiring
the client's written consent to fee sharing impresses upon the client the
18
importance of his or her consent, and of the right to reject the fee sharing.”
19 (Ibid.)9
20 We agree with this statement of rule 2–200's [now Rule 1.5.1] purpose.
21 (Chambers v. Kay, supra, 29 Cal.4th 142, 156–57.) (Emphasis added.)
22 Ergo, the clients in the underlying case needed to know---and approve---LEET’S version to
23 consider what effect deducting the entire $650,000 in credits from RYAN’S 2/3 share of the
24 recovery in a case that was still 2 years from trial would have on their lead counsel’s ability---and
25 motivation---to effectively represent them going forward.
26 LEET’S fee-splitting agreement was not fully disclosed to the clients, and lacked their
27
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 6 of 11
1 written consent. It is contrary to public policy and unenforceable; it cannot serve as the basis for his
2 other causes of action, in law or equity, regardless of theory or label. Certainly, quantum meruit
3 recovery is available under Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, but his position is
4 no better than that of the plaintiff-attorney in Chambers v. Kay.
5 III. ARGUMENT
6 A. LEET’s claim for Fraud and promissory estoppel fail as they are contrary to public
policy.
7
8 LEET cites, quotes and relies on decisions in cases involving real estate brokers’ commission
9 disputes with their principals where the statutorily-required agreements had not been signed by the
10 principals. (OPP, pp. 10 – 12.). In those cases, the reviewing courts reasoned that while an action in
11 contract did not lie because the statute required a written commission agreement, and equitable
12 estoppel based on a principal’s oral promise to sign the agreement at a later date failed because such
13 a promise was “not reasonable,” a fraud cause and equitable estoppel might lie where the principal
14 represented that the agreement had, in fact, been executed.
15 Curiously, LEET does not cite, let alone discuss, any similar decision involving RPC 1.5.1,
16 its predecessor Rule 2-200, attorney-client fee agreements, or fee-splitting agreements between
17 attorneys. But, in the Margolin referral-fee case cited by RYAN in his demurrer (MPA, p. 10), and
18 by LEET in his opposition (OPP, p. 10), the court did intimate a possibility. (Margolin v. Shemaria,
19 supra, 85 Cal.App.4th 891, 903, fn. 7; italics in original, underlining added.)
20 However, those were not the circumstances here, as LEET’S failure to even show up for the
21 3 and ½ week bench trial of the clients’ case starkly illustrates. Moreover, LEET does not deny that
22 in Margolin the Court upheld a directed verdict in the defendant's favor, reasoning that lawyers
23 suing over breaches such as the one alleged by LEET in this case are charged themselves
24 with securing the client consent that benefits them, even despite their protest that the defendant-
25 lawyer had promised that he would secure the clients’ consent but failed to do so. (Margolin at 902.)
26 The court in fact specifically stated that one lawyer's reliance on another lawyer's promise
27
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 7 of 11
1 to obtain a particular fee-sharing consent “was not sufficiently reasonable to afford ... relief from
2 the requirements of [then] rule 2-200 [now rule 1.1.5].” (Margolin at 901.) (Cf. Mark v. Spencer
3 (2008)166 Cal.App.4th 219, 229 [“Courts do not excuse nonlawyers for their ignorance of the law.
4 (Arthur Andersen v. Superior Court (1998) 67 Cal.App.4th 1481, 1506, 79 Cal.Rptr.2d 879.) We
5 see no reason to carve out an exception for attorneys.”].)
6 Even more remarkable than LEET’S failure to cite any attorney fee-splitting cases where
7 fraud or equitable estoppel claims were allowed to proceed absent an agreement that complied with
8 RPC 1.5.1, is his failure to address the facts and reasoning in Chambers v. Kay, supra, except to
9 claim it is not applicable because it did not involve the brand of fraud LEET claims Ryan has
10 committed. (OPP., pp. 13, 14.)
11 In Chambers, “…Kay wrote a letter notifying Chambers that he was being removed from
12 the Weeks case with the client's approval. That letter, which noted a ‘cc’ to the client, also confirmed
13 that Chambers would ‘receive the compensation agreed upon,’ namely, in the event the Weeks case
14 settled before depositions, ‘16.5% of the attorney's fees called for under my agreement with [the
15 client], which is 40% of the monies recovered’; thereafter, an ‘increase to 28%’ of the fees specified
16 under the agreement with the client; and reimbursement of Chambers's costs.” (Id., 29 Cal.4th 142,
17 155–56.)
18 As may be surmised from the fact that litigation ensued, Kay later informed Chambers, after
19 a large judgment in favor of the client (Ms. Weeks), that Chambers had not performed as agreed;
20 that Kay would not honor the fee-splitting agreement, but would pay Chambers $200 per hour for
21 the hours reflected in Chambers’ billing statement. Chambers sued.
22 In holding in favor of Kay’s position the California Supreme Court opined:
23 Even assuming, for purposes of argument, that Kay's letter to Chambers raises
a triable issue of material fact regarding satisfaction of rule 2–200's
24 requirement that clients be given full written disclosure of fee divisions, the
letter furnishes no basis whatsoever for inferring compliance with the rule's
25
written consent requirement. Notably, nothing in the record contradicts Kay's
26 evidence that no one ever sought or obtained Weeks's oral or written consent
to the fee sharing, or suggests that Weeks was even aware of her right of
27 consent. Hence, we now address Chambers' contention that he is entitled to a
division of fees obtained in the Weeks case despite noncompliance with the
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 8 of 11
1 rule's written consent requirement. ¶Rule 2–200 [now Rule 1.5.1]
unambiguously directs that a member of the State Bar “shall not divide a fee
2 for legal services ” unless the rule's written disclosure and consent
requirements and its restrictions on the total fee are met. Yet Chambers, in
3
effect, seeks the aid of this court in dividing the fees of a client without
4 satisfaction of the rule's written consent requirement. We decline such aid.
5 (Chambers v. Kay, supra, 29 Cal.4th 142, 156; italics in original, underlining added.)
6 Nor has LEET anywhere in his VCC pleaded that RYAN sought and obtained the clients’
7 consent to any fee-splitting agreement after March 11, 2019, which was BEFORE the alleged
8 client credit adjustments and allocations LEET says RYAN agreed to. As to LEET’S attempt to
9 equate lawyers with real estate brokers, the Chambers Court has emphatically reminded members
10 of the bar that, “attorneys ‘are bound at all events not to transgress a handful of professional ethical
11 norms that distinguish their work from that of the non-attorney.’” (Id, 29 Cal.4th at156
12 (Citation omitted; emphasis added.)
13 The Supreme Court in Chambers further opined on the issue in this matter when it wrote:
14 Although Chambers argues that rational reasons exist for allowing a division
of fees despite the lack of written client consent, e.g., it would effectuate the
15 intent of the contracting attorneys and would avoid incentives for fraud in
the inducement of such contracts, we remain mindful that we adopted the
16 rule to protect the public and to promote respect and confidence in the legal
17 profession. (See rule 1–100(A), 1st par.) Because attorneys who negotiate fee
divisions without fulfilling their obligations under rule 2–200 [now rule 1.5.1]
18 undermine the public's respect and confidence in the legal profession by failing
to put the best interests of their clients first,and because attorneys are fully
19 capable of safeguarding their own interests simply by obtaining the requisite
client consent, we are not persuaded that Chambers's proffered reasons are
20
sufficient to disregard rule 2–200's [rule 1.5.1’s] command.
21 (Id, at p. 159; emphasis added.)
22 Stare decisis---as well as the calendar, which shows that Chambers was decided by the
23 Supreme Court after Margolin was decided by the Court of Appeal---leaves LEET without recourse,
24 other than quantum meruit, and if the thrust of Chambers be doubted, the Court more recently said
25 what itmeant, and meant what it said: In Chambers “…this court refused enforcement of a fee
26 division agreement undertaken without written client consent, on the ground that the arrangement
27 violated the Rules of Professional Conduct…[ i]t follows that an attorney contract that has as its
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 9 of 11
1 object conduct constituting a violation of the Rules of Professional Conduct is contrary to the
2 public policy of this state and is therefore unenforceable.” (Sheppard, Mullin, Richter &
3 Hampton, LLP v. J-M Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 73–74; emphasis added.)
4 As to LEET’S professed “justifiable reliance” on what he pleads RYAN told him---and
5 when it was that LEET says RYAN made those representations---the question of justifiable
6 reliance is generally a question of fact to be determined by the trier of fact. However, that question
7 “ ‘may be decided as a matter of law if reasonable minds can come to only one conclusion based on
8 the facts.’ “ (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239, quoting Guido v.
9 Koopman (1991) 1 Cal.App.4th 837, 843 (superseded by statute on other grounds, see King v. CJM
10 Country Stables (D.Haw.2004) 315 F.Supp.2d 1061, 1067, fn. 6).)
11 “In determining whether one can reasonably or justifiably rely on an alleged
12 misrepresentation, the knowledge, education and experience of the person claiming reliance must
13 be considered.” (Guido, supra, 1 Cal.App.4th at p. 843.) Here, of course, that means that LEET’S
14 legal knowledge, and education and experience as an attorney, who, based on LEET’S own verified
15 cross-complaint, was familiar with RPC 1.5.1, and its requirements. (VCC., ¶¶28, 31, 33.)
16 Moreover, and as noted earlier, the Margolin court had held an attorney’s claim that he had
17 relied on defendant-attorney’s never-honored oral promise to secure client consent to a fee splitting
18 agreement was/is “not sufficiently reasonable”. Thus, given the reasoning in both Chambers and
19 Margolin, LEET does not adequately plead that essential element of fraud.
20 B. LEET’S estoppel, anticipatory breach of contract and unfair business practice counts
also fail as they are Founded on contract that is contrary to public policy.
21
22 LEET argues that if the clients are not directly impacted by the undisclosed, and non-
23 approved fee split agreement he promotes, this Court should, in effect, enforce it, even though our
24 Supreme Court said it would be “absurd” to do so, since it would subject LEET to disciplinary action
25 by the State Bar. (Chambers v. Kay, supra, 29 Cal.4th 142, 161.)
26 He further asks this Court, in making that ruling, to ignore the fact that LEET could have,
27 and should have, and was not prevented from, making that disclosure and obtaining that client
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 10 of 11
1 consent himself; that his obligation to do should be waived because he relied on RYAN’S promise
2 to do so, although the Margolin court said that such reliance is not “sufficiently reasonable.” As
3 such the requires that the Court sustain this demurrer without leave to amend.
4 IV. CONCLUSION
5 For all of the reasons stated herein, and in Plaintiff’s Demurrer and memorandum in support
6 thereof, the Court should sustain said Demurrer, without leave to amend, as to all causes of action
7 and defenses asserted by Defendant and Cross-Complainant WILLIAM CARLOS LEET.
8
9 Dated: February 7, 2022 DIBENEDETTO LAPCEVIC & DRAA, LLP
10
11
By: ___________________________________
12
WILLIAM A. LAPCEVIC
13 JUSTIN S. DRAA
Attorneys for Plaintiff JEFFREY F. RYAN
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
CASE NO. 21-CIV-04391
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
Page 11 of 11
1
2 Case Name: Jeffrey F. Ryan v. William Carlos Leet
Case No.: 21-CV-04391
3 File No.:
PROOF OF SERVICE - CCP §1013a, 2015.5
4
5 I certify and declare as follows:
6 I am over the age of 18 years, and not a party to this action. My business address is
1101 Pacific Avenue, Suite 320, Santa Cruz, California 95060, and my email address is
7 dgerard@dld-law.com.
8
On the date set forth below, I served a copy of the within documents:
9
REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT
10
on the parties in this action, by the following means:
11
12 X (BY MAIL) My business address is 1101 Pacific Avenue, Suite 320, Santa Cruz,
California 95060, which is located in the County where the mailing described took place.
13 I am readily familiar with the business practice at my place of business for collection and
processing of correspondence for mailing with the United States Postal Service.
14
Correspondence so collected and processed is deposited with the United States Postal
15 Service that same day in the ordinary course of business.
X (BY E-MAIL) My email address is dgerard@dld-law.com. I caused each such document
16 listed above to be delivered by electronic mail to the addressee(s) noted below, per
mutual agreement under C.C.P. §1010.6(e).
17
I declare under penalty of perjury under the laws of the State of California that the
18 foregoing is true and correct, and that this dee a ation w n February 7, 20i, at Santa
Cruz, California. 1
19
20
21
22 PLEASE SEE ATTACHED LIST FOR NAMES AND ADDRESSES OR FAX NUMBERS OF
23 EACH PARTY SERVED:
24 Peter DelVecchio
LEET LAW
25 210 N. 4th Street, #201
26 San Jose, CA, 95112
pmd@leetlaw.com
21 Attorney for Defendant WILLIAM CARLOS LEET
28
CASE NO. 21-CIV-04391
PROOF OF SERVICE
Page 1 ofl
Preview
1 WILLIAM A. LAPCEVIC (SBN 238893) 2/7/2022 JUSTIN S. DRAA (SBN 253688) 2 DIBENEDETTO LAPCEVIC & DRAA, LLP 1101 Pacific Avenue, Suite 320 3 Santa Cruz, California 95060 4 Tel.: (831) 325-2674 Fax: (831) 477-7617 5 Email: wal@dld-law.com Email: jdraa@dld-law.com 6 Attorneys for Plaintiff JEFFREY F. RYAN 7 8 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF SAN MATEO 10 CIVIL DIVISION 11 JEFFREY F. RYAN, Case No. 21-CIV-04391 12 Plaintiff, REPLY TO OPPOSITION TO vs. DEMURRER TO VERIFIED CROSS- 13 COMPLAINT 14 WILLIAM CARLOS LEET, an individual; and DOES 1-10. (CCP §§ 92, 430.10, 430.30) 15 Defendants. Date: February 15, 2022 16 Time: 2:00 P.M. Dept.: 4 17 18 AND RELATED CROSS ACTION Assigned for All Purposes to Hon. Nancy L. Fineman, Dept. 4 19 20 21 Plaintiff and Cross-Defendant JEFFREY F. RYAN (“RYAN”) submits the within Reply to 22 the Opposition (“OPP.”) of Defendant and Cross-Complainant WILLIAM CARLOS LEET 23 (“LEET”) to RYAN’S Demurrer to LEET’S Verified Cross-Complaint (“VCC.”). 24 I. CASE OVERVIEW 25 The Complaint filed by RYAN on 8/17/2021 alleges that in 2019 LEET agreed to perform 26 legal services in a case RYAN had been handling since 2017 under a hybrid, half-hourly-half- 27 contingency-fee agreement with the clients, but which the clients had recently convinced RYAN 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 1 of 11 1 to convert to a straight contingency fee basis. (COMP. ¶¶ 7 – 10.) 2 Attached as “Exhibit A” to RYAN’S Complaint is a true copy of the revised fee agreement 3 with RYAN’S clients, with the terms of his fee-splitting agreement with LEET spelled out in ¶5, 4 page 2 of 6, of that March 1, 2019, fee agreement. The Complaint, at ¶11, quoted the terms of the 5 fee-splitting agreement provisions of that fee agreement. RYAN alleges that after the clients read 6 and executed the fee agreement-cum-fee-splitting agreement, he sent a copy to LEET. (COMP, ¶ 7 12.) 8 RYAN further alleges that at some point during the litigation of the clients’ case, LEET 9 essentially disappeared, refusing to perform the services he had committed to perform, which 10 necessitated the hiring by RYAN of another attorney and a paralegal to pick up the slack, which 11 cost the clients an additional $100,000 that had not been contemplated by the March 1, 2019, straight 12 contingency agreement. (COMP. ¶¶ 14 – 16.) 13 LEET reappeared coincidental with partial settlement (for $2,975,000) of the clients’ case 14 after 3 and ½ weeks of bench trial, tried by RYAN alone, and none of which was attended by LEET, 15 who proceeded to demand $357,000 as his share of RYAN’S contingency fee. (COMP. ¶¶ 18 – 19.) 16 RYAN sues for breach of contract and declaratory relief. (COMP, ¶¶ 23 – 35.) 1 17 LEET’S VCC alleges that while RYAN truthfully advised him that the March 1, 2019, fee 18 agreement with the clients provided that RYAN’S 40% contingency fee would be calculated after 19 crediting the clients for the amounts they had paid under the initial half-hourly-half-contingency fee 20 agreement, RYAN had intentionally misrepresented to LEET the extent of those credits. (VCC, ¶¶ 21 1 – 8.) 22 Specifically, LEET alleges that RYAN told him on March 11, 2019 that the revised fee 23 agreement with the client, with the fee-split contained there had already been done [VCC, ¶34]; that 24 the only credits clients would receive against RYAN’S 40% contingency fee would be for the 25 26 27 1 The Court’s docket reflects that RYAN dismissed without prejudice his Third Cause of Action 28 for Civil Extortion on August 30, 2021. CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 2 of 11 1 amounts clients had paid to attorney Jennifer Hagan, which LEET alleges RYAN represented to be 2 in the neighborhood of $200,000; that when LEET expressed hesitation, RYAN agreed that the 3 Hagan credit would come out of RYAN’S share of the fee-split, which the parties agreed would be 4 2/3 to RYAN, 1/3 to LEET. (VCC, ¶¶3, 35 - 40.) 5 LEET alleges that his fee-splitting agreement with RYAN is in writing, consisting of emails 6 they exchanged, and that RYAN confirmed the particulars on April 2, 2019. (VCC, ¶¶ 31, 42.) [NB. 7 The dates set forth in the VCC, as recounted in this and the preceding paragraph are critically 8 important because they show that LEET knew on March 11, 2019 that the revised fee agreement 9 with the clients, containing the fee-split terms, had been done before RYAN allegedly agreed to 10 LEET’S proposal regarding the hourly fee credits issue, and most certainly it had “been done” before 11 LEET confirmed it on April 2, 2019.] 12 LEET alleges that RYAN represented that the clients had approved their fee-splitting 13 agreement in a writing that complied with Rules of Professional Conduct (“RPC”) rule 1.5.1. (VCC, 14 ¶ 6.) 15 LEET alleges that RYAN further represented that the only “lien” against the 40% 16 contingency fee was the credit due to the clients for the payments made to Jennifer Hagan, but that, 17 in fact, the total credits due to the clients for payments to all attorneys and paralegals before the fee 18 agreement was converted to straight contingency amounted to $650,000, which RYAN concealed 19 from LEET. (VCC, ¶¶ 7, 9.) LEET further appears to assert his claim to 1/3 of the 40% contingency 20 fee that might be due on any recovery against the remaining party, or parties in the clients’ case. 21 (VCC, ¶ 11.) 22 LEET alleges that he does not contend that clients are entitled to anything less than what is 23 set forth in the March 1, 2019, fee-agreement-cum-fee-splitting-agreement, a true copy of which he 24 appends to his VCC as separately-filed Exhibit B. (VCC, ¶ 18.) But LEET further alleges that RYAN 25 did not provide LEET with a copy of that March 1, 2019, writing “at any time proximate to this 26 [April 2, 2019] discussion.” (VCC, ¶44.) 27 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 3 of 11 1 LEET alleges that he appeared in the underlying case in March 2019, and then “noticed” in 2 August 2021 on the case docket that a partial settlement had been approved by the Court. (VCC, ¶¶ 3 57 – 58.) LEET cross-complains for fraudulent misrepresentation, fraudulent concealment, 4 promissory estoppel, anticipatory breach of contract, and unfair business practices. 5 (VCC, ¶¶74 – 100.) 6 II. SUMMARY OF REPLY TO OPPOSITON TO DEMURRER 7 It is long-settled that “ ‘[a] void contract, a contract against public policy or against the 8 mandate of the statute, may not be made the foundation of any action, either in law or in equity.’ 9 (Chateau v. Singla (1896) 114 Cal. 91, 94, 45 P. 1015; Hooper v. Barranti (1947) 81 Cal.App.2d 10 570, 574, 184 P.2d 688.).” (Lawler v. Jacobs (2000) 83 Cal.App.4th 723, 737; emphasis added.) 11 Thus, for example, a cause of action for fraud based on nonperformance of a contract that 12 is unenforceable as contrary to public policy is an impermissible attempt” … to accomplish by 13 indirection what [that public policy] prohibits.” (Cf. Lawler, supra, at 738.) (See, also, Bank of 14 Orland v. Harlan (1922) 188 Cal. 413, 422 [ “It is immaterial whether the facts showing the 15 unenforceable nature of the contract appear from the pleadings or not, where the evidence discloses 16 the relations of the parties to the transaction are illegal and against public policy the court will act 17 on its own motion. [citations omitted.].”). 18 A fee-splitting agreement between attorneys must be written, and its terms must be fully 19 disclosed to the clients, who must give their written consent thereto. (RPC 1.5.1; Chambers v. Kay 20 (2002) 29 Cal.4th 142, 156; Margolin v. Shemaria (2000) 85 Cal. App.4th 891, 901-902.) A fee- 21 splitting agreement that does not comport with Rule 1.5.1 requirements is not only violative of the 22 Rules of Professional Conduct, but “…is unenforceable as against public policy if the client did not 23 give informed, written consent to the fee-sharing agreement.” (Reeve v. Meleyco (2020) 46 24 Cal.App.5th 1092, 1098.) (Emphasis added.) 25 Even where the lawyer later accused by the other attorney of malfeasance promises that he 26 will secure the client consent and then fails to do so, non-compliance with Rule 1.5.1 is not excused. 27 (Margolin, surpa, at 902.) Notably, the court specifically stated that one lawyer's reliance on another 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 4 of 11 1 lawyer's promise to obtain a particular fee-sharing consent “was not sufficiently reasonable to afford 2 ... relief from the requirements of [then] rule 2-200 [now rule 1.1.5].” 3 (Margolin at 901.) 4 In Chambers, “…the court held an attorney can protect his or her interests, and at the same 5 time fulfill the beneficial purposes of the rule, acting in the client's best interests, by requesting proof 6 of the client's written consent to the fee division. (Id. at pp. 162-163, 126 Cal.Rptr.2d 536, 56 P.3d 7 645.).” (Reeve v. Meleyco, supra, 46 Cal.App.5th at 1098.)(Emphasis added.) 8 Indeed, “…a noncompliant agreement generally cannot be enforced by an attorney. 9 Chambers, Margolin, and Mark [v. Spencer (2008) 166 Cal.App.4th 219, 299] uniformly 10 recognize that an attorney cannot enforce a fee-sharing agreement if that attorney could have 11 obtained written client consent as required by rule 2–200 [now rule 1.5.1], but failed to do so.” 12 (Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler (2012) 212 Cal.App.4th 172, 181.) (Emphasis 13 added.) 14 It is not in question that the Ryan disclosed the terms of his fee-splitting agreement with 15 LEET to his clients and obtained their informed written consent. LEET does not plead that he fully 16 disclosed the terms of his fee-splitting agreement with RYAN to the clients and obtained their 17 informed written consent. Nor does LEET plead that RYAN in any way prevented LEET from 18 obtaining a copy of the fee-splitting agreement that the clients had approved, or from presenting to 19 the clients for their approval the fee-splitting agreement LEET wanted them to approve. 2 Incredibly, 20 despite the further negotiations with RYAN about the credits issue AFTER RYAN had advised 21 LEET that the revised agreement had already been sent to the clients, LEET does not plead that he 22 ever asked RYAN, or the clients, for a copy of the revised fee-agreement-cum-fee-splitting 23 agreement to make sure that is comported with what he alleges he and RYAN later agreed to. 24 25 26 2 The sole authority cited by counsel for an exception to strict compliance with the client consent 27 requirement is where the defendant-attorney took affirmative steps to prevent the plaintiff-attorney from obtaining that consent. (Barnes, supra, at 12 Cal.App. 4th at 185–186.) 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 5 of 11 1 The failure by LEET to plead facts supporting the client disclosure and consent predicates 2 for a valid, enforceable fee-splitting agreement means that RYAN’S demurrer must be sustained. 3 (Cf. Chambers v. Kay, supra, 29 Cal.4th 142, 161 [“…it would be absurd for this or any other court 4 to aid [Leet] in accomplishing a fee division that would violate the rule's explicit requirement of 5 written client consent and would subject [Leet] to professional discipline.”].) 6 Finally, LEET’S attempt at hair-splitting argument, i.e., since both his and RYAN’S 7 agreements called for a 2/3 – 1/3 split, which the clients approved, and the amount of the credits to 8 be applied before calculating the overall 40% attorney fee had no effect on the clients’ net recovery 9 (since under LEET’S version those credits would be charged in toto against RYAN’S 2/3 share), it 10 was therefore immaterial, or not really a “term” that required disclosure and consent, runs contrary 11 to the fundamental purpose of Rule 1.5.1: 12 “Just as a client has a right to know how his or her attorney's fees will be Determined, he or she also has a right to know the extent of, and the basis for, 13 the sharing of such fees by attorneys. Knowledge of these matters helps assure the client that he or she will not be charged unwarranted fees just 14 so that the attorney who actually provides the client with representation 15 on the legal matter has ‘sufficient compensation’ to be able to share fees with the referring attorney. Disclosure of these matters to the client should 16 be in writing because the client should not be expected to mentally retain such information throughout the pendency of the case.” (Margolin, 17 supra, 85 Cal.App.4th at p. 903, 102 Cal.Rptr.2d 502.) Moreover, “[r]equiring the client's written consent to fee sharing impresses upon the client the 18 importance of his or her consent, and of the right to reject the fee sharing.” 19 (Ibid.)9 20 We agree with this statement of rule 2–200's [now Rule 1.5.1] purpose. 21 (Chambers v. Kay, supra, 29 Cal.4th 142, 156–57.) (Emphasis added.) 22 Ergo, the clients in the underlying case needed to know---and approve---LEET’S version to 23 consider what effect deducting the entire $650,000 in credits from RYAN’S 2/3 share of the 24 recovery in a case that was still 2 years from trial would have on their lead counsel’s ability---and 25 motivation---to effectively represent them going forward. 26 LEET’S fee-splitting agreement was not fully disclosed to the clients, and lacked their 27 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 6 of 11 1 written consent. It is contrary to public policy and unenforceable; it cannot serve as the basis for his 2 other causes of action, in law or equity, regardless of theory or label. Certainly, quantum meruit 3 recovery is available under Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, but his position is 4 no better than that of the plaintiff-attorney in Chambers v. Kay. 5 III. ARGUMENT 6 A. LEET’s claim for Fraud and promissory estoppel fail as they are contrary to public policy. 7 8 LEET cites, quotes and relies on decisions in cases involving real estate brokers’ commission 9 disputes with their principals where the statutorily-required agreements had not been signed by the 10 principals. (OPP, pp. 10 – 12.). In those cases, the reviewing courts reasoned that while an action in 11 contract did not lie because the statute required a written commission agreement, and equitable 12 estoppel based on a principal’s oral promise to sign the agreement at a later date failed because such 13 a promise was “not reasonable,” a fraud cause and equitable estoppel might lie where the principal 14 represented that the agreement had, in fact, been executed. 15 Curiously, LEET does not cite, let alone discuss, any similar decision involving RPC 1.5.1, 16 its predecessor Rule 2-200, attorney-client fee agreements, or fee-splitting agreements between 17 attorneys. But, in the Margolin referral-fee case cited by RYAN in his demurrer (MPA, p. 10), and 18 by LEET in his opposition (OPP, p. 10), the court did intimate a possibility. (Margolin v. Shemaria, 19 supra, 85 Cal.App.4th 891, 903, fn. 7; italics in original, underlining added.) 20 However, those were not the circumstances here, as LEET’S failure to even show up for the 21 3 and ½ week bench trial of the clients’ case starkly illustrates. Moreover, LEET does not deny that 22 in Margolin the Court upheld a directed verdict in the defendant's favor, reasoning that lawyers 23 suing over breaches such as the one alleged by LEET in this case are charged themselves 24 with securing the client consent that benefits them, even despite their protest that the defendant- 25 lawyer had promised that he would secure the clients’ consent but failed to do so. (Margolin at 902.) 26 The court in fact specifically stated that one lawyer's reliance on another lawyer's promise 27 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 7 of 11 1 to obtain a particular fee-sharing consent “was not sufficiently reasonable to afford ... relief from 2 the requirements of [then] rule 2-200 [now rule 1.1.5].” (Margolin at 901.) (Cf. Mark v. Spencer 3 (2008)166 Cal.App.4th 219, 229 [“Courts do not excuse nonlawyers for their ignorance of the law. 4 (Arthur Andersen v. Superior Court (1998) 67 Cal.App.4th 1481, 1506, 79 Cal.Rptr.2d 879.) We 5 see no reason to carve out an exception for attorneys.”].) 6 Even more remarkable than LEET’S failure to cite any attorney fee-splitting cases where 7 fraud or equitable estoppel claims were allowed to proceed absent an agreement that complied with 8 RPC 1.5.1, is his failure to address the facts and reasoning in Chambers v. Kay, supra, except to 9 claim it is not applicable because it did not involve the brand of fraud LEET claims Ryan has 10 committed. (OPP., pp. 13, 14.) 11 In Chambers, “…Kay wrote a letter notifying Chambers that he was being removed from 12 the Weeks case with the client's approval. That letter, which noted a ‘cc’ to the client, also confirmed 13 that Chambers would ‘receive the compensation agreed upon,’ namely, in the event the Weeks case 14 settled before depositions, ‘16.5% of the attorney's fees called for under my agreement with [the 15 client], which is 40% of the monies recovered’; thereafter, an ‘increase to 28%’ of the fees specified 16 under the agreement with the client; and reimbursement of Chambers's costs.” (Id., 29 Cal.4th 142, 17 155–56.) 18 As may be surmised from the fact that litigation ensued, Kay later informed Chambers, after 19 a large judgment in favor of the client (Ms. Weeks), that Chambers had not performed as agreed; 20 that Kay would not honor the fee-splitting agreement, but would pay Chambers $200 per hour for 21 the hours reflected in Chambers’ billing statement. Chambers sued. 22 In holding in favor of Kay’s position the California Supreme Court opined: 23 Even assuming, for purposes of argument, that Kay's letter to Chambers raises a triable issue of material fact regarding satisfaction of rule 2–200's 24 requirement that clients be given full written disclosure of fee divisions, the letter furnishes no basis whatsoever for inferring compliance with the rule's 25 written consent requirement. Notably, nothing in the record contradicts Kay's 26 evidence that no one ever sought or obtained Weeks's oral or written consent to the fee sharing, or suggests that Weeks was even aware of her right of 27 consent. Hence, we now address Chambers' contention that he is entitled to a division of fees obtained in the Weeks case despite noncompliance with the 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 8 of 11 1 rule's written consent requirement. ¶Rule 2–200 [now Rule 1.5.1] unambiguously directs that a member of the State Bar “shall not divide a fee 2 for legal services ” unless the rule's written disclosure and consent requirements and its restrictions on the total fee are met. Yet Chambers, in 3 effect, seeks the aid of this court in dividing the fees of a client without 4 satisfaction of the rule's written consent requirement. We decline such aid. 5 (Chambers v. Kay, supra, 29 Cal.4th 142, 156; italics in original, underlining added.) 6 Nor has LEET anywhere in his VCC pleaded that RYAN sought and obtained the clients’ 7 consent to any fee-splitting agreement after March 11, 2019, which was BEFORE the alleged 8 client credit adjustments and allocations LEET says RYAN agreed to. As to LEET’S attempt to 9 equate lawyers with real estate brokers, the Chambers Court has emphatically reminded members 10 of the bar that, “attorneys ‘are bound at all events not to transgress a handful of professional ethical 11 norms that distinguish their work from that of the non-attorney.’” (Id, 29 Cal.4th at156 12 (Citation omitted; emphasis added.) 13 The Supreme Court in Chambers further opined on the issue in this matter when it wrote: 14 Although Chambers argues that rational reasons exist for allowing a division of fees despite the lack of written client consent, e.g., it would effectuate the 15 intent of the contracting attorneys and would avoid incentives for fraud in the inducement of such contracts, we remain mindful that we adopted the 16 rule to protect the public and to promote respect and confidence in the legal 17 profession. (See rule 1–100(A), 1st par.) Because attorneys who negotiate fee divisions without fulfilling their obligations under rule 2–200 [now rule 1.5.1] 18 undermine the public's respect and confidence in the legal profession by failing to put the best interests of their clients first,and because attorneys are fully 19 capable of safeguarding their own interests simply by obtaining the requisite client consent, we are not persuaded that Chambers's proffered reasons are 20 sufficient to disregard rule 2–200's [rule 1.5.1’s] command. 21 (Id, at p. 159; emphasis added.) 22 Stare decisis---as well as the calendar, which shows that Chambers was decided by the 23 Supreme Court after Margolin was decided by the Court of Appeal---leaves LEET without recourse, 24 other than quantum meruit, and if the thrust of Chambers be doubted, the Court more recently said 25 what itmeant, and meant what it said: In Chambers “…this court refused enforcement of a fee 26 division agreement undertaken without written client consent, on the ground that the arrangement 27 violated the Rules of Professional Conduct…[ i]t follows that an attorney contract that has as its 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 9 of 11 1 object conduct constituting a violation of the Rules of Professional Conduct is contrary to the 2 public policy of this state and is therefore unenforceable.” (Sheppard, Mullin, Richter & 3 Hampton, LLP v. J-M Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 73–74; emphasis added.) 4 As to LEET’S professed “justifiable reliance” on what he pleads RYAN told him---and 5 when it was that LEET says RYAN made those representations---the question of justifiable 6 reliance is generally a question of fact to be determined by the trier of fact. However, that question 7 “ ‘may be decided as a matter of law if reasonable minds can come to only one conclusion based on 8 the facts.’ “ (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239, quoting Guido v. 9 Koopman (1991) 1 Cal.App.4th 837, 843 (superseded by statute on other grounds, see King v. CJM 10 Country Stables (D.Haw.2004) 315 F.Supp.2d 1061, 1067, fn. 6).) 11 “In determining whether one can reasonably or justifiably rely on an alleged 12 misrepresentation, the knowledge, education and experience of the person claiming reliance must 13 be considered.” (Guido, supra, 1 Cal.App.4th at p. 843.) Here, of course, that means that LEET’S 14 legal knowledge, and education and experience as an attorney, who, based on LEET’S own verified 15 cross-complaint, was familiar with RPC 1.5.1, and its requirements. (VCC., ¶¶28, 31, 33.) 16 Moreover, and as noted earlier, the Margolin court had held an attorney’s claim that he had 17 relied on defendant-attorney’s never-honored oral promise to secure client consent to a fee splitting 18 agreement was/is “not sufficiently reasonable”. Thus, given the reasoning in both Chambers and 19 Margolin, LEET does not adequately plead that essential element of fraud. 20 B. LEET’S estoppel, anticipatory breach of contract and unfair business practice counts also fail as they are Founded on contract that is contrary to public policy. 21 22 LEET argues that if the clients are not directly impacted by the undisclosed, and non- 23 approved fee split agreement he promotes, this Court should, in effect, enforce it, even though our 24 Supreme Court said it would be “absurd” to do so, since it would subject LEET to disciplinary action 25 by the State Bar. (Chambers v. Kay, supra, 29 Cal.4th 142, 161.) 26 He further asks this Court, in making that ruling, to ignore the fact that LEET could have, 27 and should have, and was not prevented from, making that disclosure and obtaining that client 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 10 of 11 1 consent himself; that his obligation to do should be waived because he relied on RYAN’S promise 2 to do so, although the Margolin court said that such reliance is not “sufficiently reasonable.” As 3 such the requires that the Court sustain this demurrer without leave to amend. 4 IV. CONCLUSION 5 For all of the reasons stated herein, and in Plaintiff’s Demurrer and memorandum in support 6 thereof, the Court should sustain said Demurrer, without leave to amend, as to all causes of action 7 and defenses asserted by Defendant and Cross-Complainant WILLIAM CARLOS LEET. 8 9 Dated: February 7, 2022 DIBENEDETTO LAPCEVIC & DRAA, LLP 10 11 By: ___________________________________ 12 WILLIAM A. LAPCEVIC 13 JUSTIN S. DRAA Attorneys for Plaintiff JEFFREY F. RYAN 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CASE NO. 21-CIV-04391 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT Page 11 of 11 1 2 Case Name: Jeffrey F. Ryan v. William Carlos Leet Case No.: 21-CV-04391 3 File No.: PROOF OF SERVICE - CCP §1013a, 2015.5 4 5 I certify and declare as follows: 6 I am over the age of 18 years, and not a party to this action. My business address is 1101 Pacific Avenue, Suite 320, Santa Cruz, California 95060, and my email address is 7 dgerard@dld-law.com. 8 On the date set forth below, I served a copy of the within documents: 9 REPLY TO OPPOSITION TO DEMURRER TO VERIFIED CROSS-COMPLAINT 10 on the parties in this action, by the following means: 11 12 X (BY MAIL) My business address is 1101 Pacific Avenue, Suite 320, Santa Cruz, California 95060, which is located in the County where the mailing described took place. 13 I am readily familiar with the business practice at my place of business for collection and processing of correspondence for mailing with the United States Postal Service. 14 Correspondence so collected and processed is deposited with the United States Postal 15 Service that same day in the ordinary course of business. X (BY E-MAIL) My email address is dgerard@dld-law.com. I caused each such document 16 listed above to be delivered by electronic mail to the addressee(s) noted below, per mutual agreement under C.C.P. §1010.6(e). 17 I declare under penalty of perjury under the laws of the State of California that the 18 foregoing is true and correct, and that this dee a ation w n February 7, 20i, at Santa Cruz, California. 1 19 20 21 22 PLEASE SEE ATTACHED LIST FOR NAMES AND ADDRESSES OR FAX NUMBERS OF 23 EACH PARTY SERVED: 24 Peter DelVecchio LEET LAW 25 210 N. 4th Street, #201 26 San Jose, CA, 95112 pmd@leetlaw.com 21 Attorney for Defendant WILLIAM CARLOS LEET 28 CASE NO. 21-CIV-04391 PROOF OF SERVICE Page 1 ofl