The opinion
Filed 8/30/21
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
SAYEDEH SAHBA AMJADI,
Plaintiff and Appellant, G059069, G059273
v. (Super. Ct. No. 30-2018-00976542)
JERROD WEST BROWN, OPINION
Defendant and Respondent.
Appeals from a judgment and an order of the Superior Court of Orange
County, Derek W. Hunt, Judge. Reversed.
diDonato Law Center, Peter R. diDonato, and Jewels J. Jin for Plaintiff and
Appellant.
MacDonald & Cody, Richard S. Gower, and Christian X. Przybylowski for
Defendant and Respondent.
Plaintiff Sayedeh Sahba Amjadi appeals from a judgment of dismissal
entered after a settlement was entered by her attorney on her behalf and over her
objection with defendant Jerrod West Brown, and from an order denying her subsequent
motion to vacate the judgment. The settlement was entered by plaintiff’s attorney
pursuant to a provision in the attorney’s contingent fee agreement, which purports to
grant the attorney the right to accept settlement offers on the client’s behalf in the
attorney’s “sole discretion,” so long as the attorney believes in good faith that the
settlement offer is reasonable and in the client’s best interest. We conclude such a
provision violates the Rules of Professional Conduct and is void to the extent it purports
to grant an attorney the right to accept a settlement over the client’s objection.
Accordingly, we hold the settlement to be void and reverse the resulting judgment. We
also refer plaintiff’s former attorneys to the State Bar for potential discipline, as required
by law and by Canon 3D(2) of the Code of Judicial Ethics.
FACTS
Plaintiff sued defendant (& two other people, not parties to this appeal) for
damages arising from injuries she sustained in an automobile accident. The matter was
set for jury trial in July of 2019. The week before trial, plaintiff fired her attorneys and
the trial date was vacated. Plaintiff hired new attorneys (Kevin Jolly & Leah Berry of
Jolly Berry Law and Joseph Nazarian from Accident Lawyers Firm) and her trial was
reset for January 2020. The contingent fee agreement between plaintiff and the Jolly
Berry firm included this language, which has now given rise to the present appeal:
“CLIENT agrees that if a settlement offer is tendered in the case by any defendants and
the ATTORNEY believes in good faith that the settlement offer is reasonable, and that
acceptance of the offer is in the CLIENT’s best interest, and should be accepted, CLIENT
authorizes ATTORNEY to accept said offer on CLIENT’s behalf, at ATTORNEY’s sole
discretion.”
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In the days before trial, plaintiff’s relationship with her new attorneys
soured, in part over a disagreement about whether to ask for a further continuance of trial.
One of plaintiff’s attorneys e-mailed plaintiff the night before trial asking plaintiff how
she wished to proceed, and indicating the attorneys were preparing a substitution of
attorney.
On the morning of trial, plaintiff’s attorneys sought to be relieved as
counsel for plaintiff based upon a conflict of interest. The trial court denied their motion
to be relieved. Then, plaintiff’s attorney Kevin Jolly (Jolly) approached defense counsel
about a potential settlement for $150,000, an amount plaintiff had previously rejected.
Defense counsel renewed the $150,000 offer. Jolly then advised plaintiff he was
accepting the settlement offer on her behalf.
Jolly returned to court and announced the settlement to the court, over
plaintiff’s objection. The court instructed counsel to prepare and submit a signed written
settlement agreement over the lunch break. During the lunch break, plaintiff sent an e-
mail to her attorneys indicating she wanted them to sign a substitution of attorney form,
and objecting to unilateral action by the attorneys on her behalf. Nevertheless, Jolly
signed a settlement agreement on plaintiff’s behalf on the unilateral authority provided by
the retainer agreement and presented it to the court. The court accepted the settlement
and set a hearing for an order to show cause regarding dismissal.
Before the hearing on dismissal, plaintiff (now in propria persona) filed a
declaration asserting she objected to the settlement and dismissal, and had not consented
to the settlement agreement executed by Jolly. At the hearing, the trial court dismissed
the case, indicating plaintiff had failed to bring a motion. The trial court later issued a
minute order reflecting this disposition, but erroneously noting plaintiff “did not submit
any written material.”
Plaintiff then hired new counsel, who filed a motion to vacate the judgment
on her behalf. The motion was opposed by the Jolly Berry firm, acting as “Former
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Attorneys for Plaintiff.” The Jolly Berry firm’s opposition included declarations from
her attorneys describing various attorney-client communications in the course of
negotiating the retainer agreement and the run-up to trial, complete copies of the retainer
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agreement and a limited power of attorney executed by plaintiff, and copies of text
messages and e-mails between plaintiff and her attorneys. The attorney declarations
included discussions of plaintiff’s communication with other past attorneys, mental
health, feelings of religious persecution, and intimacy that were apparently previously
confidential. The trial court denied the motion to vacate.
Plaintiff took timely appeals from both the judgment and the order denying
plaintiff’s motion to vacate the judgment, which we consolidated.
DISCUSSION
Plaintiff contends the settlement is void and challenges both the trial court’s
entry of a judgment of dismissal and the trial court’s order denying plaintiff’s motion to
vacate the judgment. Defendant argues the settlement was authorized by a permissible
provision of the Jolly Berry firm’s attorney fee agreement and the trial court was justified
in dismissing the action and denying the motion to vacate the judgment. We begin with
the trial court’s reason for refusing to consider plaintiff’s arguments at the hearing on
dismissal.
1. The Order to Show Cause Hearing
At the hearing on the court’s order to show cause regarding dismissal, the
trial court refused to consider plaintiff’s arguments because she failed to “come to [the
court] with a specific motion.” We conclude this was error. “An order to show cause is
considered the equivalent of a notice of motion, but with a citation to appear and show
cause annexed.” (Eddy v. Temkin (1985) 167 Cal.App.3d 1115, 1120.) Both a
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The power of attorney in question only authorized the Jolly Berry firm to
execute and endorse checks on plaintiff’s behalf into the Jolly Berry firm’s client
trust account, and is therefore irrelevant to the issues presented by this appeal.
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declaration and oral testimony are ordinary and sufficient responses to an order to show
cause. (Id. at p. 1121.) There was no need for a further motion—the settlement and
dismissal were properly before the court and plaintiff’s declaration should have been
considered. We therefore turn to the merits of plaintiff’s arguments.
2. Validity of the Settlement
Plaintiff’s challenge to the dismissal rests upon her contention that an
attorney may not settle a case over his or her client’s objection, regardless of whether the
retainer agreement purports to authorize the attorney to do so.
In evaluating the behavior of an attorney, our first reference is to the Rules
of Professional Conduct, which “are intended to regulate professional conduct of
lawyers . . . [and] to protect the public, the courts, and the legal profession; protect the
integrity of the legal system; and promote the administration of justice and confidence in
the legal profession.” (Rules Prof. Conduct, rule 1.0(a).) Rule 1.2(a) provides, in
relevant part, “A lawyer shall abide by a client’s decision whether to settle a matter.” On
its face, this rule appears to prohibit the disputed provision of the Jolly Berry firm’s
retainer agreement.
Plaintiff also cites In the Matter of Guzman (Review Dept. 2014) 5 Cal.
State Bar Ct. Rptr. 308, 314-315 (Guzman) for the proposition that retainer agreements
purporting to grant the attorney the unfettered right to settle the client’s case are invalid.
In Guzman, an attorney settled his clients’ case without their knowledge or consent, and
relied upon a provision of his retainer agreement which provided him with sole authority
to settle. (Guzman, supra, 5 Cal. State Bar Ct. Rptr. at pp. 313-314.) The State Bar court
found the attorney’s behavior “involve[d] overreaching and constitute[d] moral
turpitude.” (Id. at p. 314.) The court also held the relevant provision of the retainer
agreement invalid: “Attempts by an attorney to restrict a client’s right to control his or
her case are invalid and evidence of overreaching.” (Ibid.) While we note Guzman was
decided under the previous version of the Rules of Professional Conduct, we nevertheless
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find it persuasive, particularly in light of the total absence of contrary decisional authority
presented by defendant.
And there are many other reasons, left unstated in Guzman, to doubt the
propriety of a provision of this type. In the context of a contingent fee agreement (as in
both Guzman & the present case), such a provision creates an immediate, direct conflict
of interest under rule 1.7 (b) of the Rules of Professional Conduct whenever the client
and attorney disagree about settlement. The provision also forces the attorney to disclose
details of the retainer agreement to opposing counsel in order to become effective, which
violates the attorney’s duty of confidentiality to his or her client. (Rules Prof. Conduct,
rule 1.6(a); Bus. & Prof. Code, § 6149 [retainer agreement is confidential attorney-client
communication].) And the provision seems logically inconsistent with the well-
understood rule that “the client’s power to discharge an attorney, with or without cause, is
absolute.” (Fracasse v. Brent (1972) 6 Cal.3d 784, 790.)
Against these considerations, defendant raises two principal arguments.
First, defendant argues the settlement was entered before plaintiff objected or revoked her
attorneys’ authority. Accordingly, defendant contends, plaintiff’s attorney acted under
permissible advance authorization to settle, and plaintiff’s later protestations cannot undo
what her attorney had already done. The record does not support defendant’s position.
Plaintiff provided unrebutted testimony that she objected to the settlement at all times,
including contemporaneously with its execution. Even the Jolly Berry firm’s
declarations, provided in opposition to plaintiff’s motion to vacate the judgment, support
plaintiff’s position. Moreover, the parties agree plaintiff rejected the exact same
$150,000 settlement offer months earlier, demonstrating Jolly was knowingly entering a
settlement that his client did not want.
Second, defendant cites the commentary to rule 1.2 of the Rules of
Professional Conduct, arguing it clarifies the rule and permits clients to grant their
attorneys advance authorization to settle. The relevant section of the commentary states:
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“At the outset of, or during a representation, the client may authorize the lawyer to take
specific action on the client’s behalf without further consultation. Absent a material
change in circumstances and subject to rule 1.4, a lawyer may rely on such an advance
authorization. The client may revoke such authority at any time.” (Rules Prof. Conduct,
rule 1.2, comment [2].)
We find defendant’s second argument equally unpersuasive. The
commentary permits clients to provide their attorneys advance authorization to settle, but
does not permit an attorney to settle a case over the client’s contemporaneous objection.
In fact, it expressly forbids such a maneuver: “The client may revoke [settlement]
authority at any time.” And to the extent the Jolly Berry firm’s retainer agreement
purported to give the Jolly Berry firm such authority, it violates the Rules of Professional
Conduct and is void. Moreover, though we do not decide the issue, we question whether
a blanket authorization, given at the inception of the attorney-client relationship, to settle
at any amount and on any terms in the attorney’s “sole discretion” would be sufficiently
“specific” to satisfy the commentary even if the settlement were made in the client’s
absence and without a contemporaneous objection.
In summary, we hold an attorney may not settle a client’s case over the
client’s objection and any provision of a retainer agreement purporting to give an
attorney such authority violates the Rules of Professional Conduct and is void.
Consequently, the settlement was entered without authority and was voidable by plaintiff.
And when plaintiff objected to the settlement and resulting dismissal, she voided the
settlement. Without the settlement, the dismissal cannot stand and the judgment must be
reversed.
3. Plaintiff’s Other Requested Relief
In addition to declaring the settlement void and reversing the dismissal,
plaintiff also requests we (1) reverse the trial court’s ruling denying plaintiff’s motion to
vacate the dismissal; (2) order reinstatement of the matter to the civil active list for trial;
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(3) order Jolly to return to defendant’s insurer funds paid to Jolly’s client trust account
pursuant to the settlement agreement; and (4) order Jolly to pay attorney fees and costs
incurred by plaintiff in prosecuting her appeals. Having reversed the dismissal, we find
the motion to vacate the dismissal moot, and therefore decline to evaluate the trial court’s
ruling thereon. We also decline to interfere with the trial court’s sound management of
its own docket, as we presume the trial court will properly take whatever procedural steps
are necessary after our remittitur issues.
We decline to issue any orders regarding amounts paid pursuant to the void
settlement agreement. Again, we presume any such funds have been handled and will
continue to be handled by the Jolly Berry firm in compliance with the Rules of
Professional Conduct. Last, we decline to depart from our usual practice with respect to
fees and costs incurred on appeal. As set forth below, we award costs to plaintiff (&
against defendant, not Jolly) as the prevailing party on this appeal pursuant to California
Rules of Court, rule 8.278. And under California Rules of Court, rule 3.1702, any claim
for attorney fees incurred on appeal is properly made to the trial court, not to us.
4. Referral to the State Bar
Business and Professions Code section 6086.7, subdivision (a)(2) requires
us to notify the State Bar “[w]henever a modification or reversal of a judgment in a
judicial proceeding is based in whole or in part on the misconduct, incompetent
representation, or willful misrepresentation of an attorney.” Similarly, Canon 3D(2) of
the Code of Judicial Ethics states “Whenever a judge has personal knowledge, or
concludes in a judicial decision, that a lawyer has committed misconduct or has violated
any provision of the Rules of Professional Conduct, the judge shall take appropriate
corrective action, which may include reporting the violation to the appropriate authority.”
Because we based our reversal in this matter on the Jolly Berry firm’s violation of rule
1.2 of the Rules of Professional Conduct, we refer plaintiff’s former attorneys Kevin
Jolly, Leah Berry, and Joseph Nazarian to the State Bar for potential discipline.
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In addition to our finding of a violation of rule 1.2 of the Rules of
Professional Conduct, we also note potential violations of rules 1.6 (when plaintiff’s
former attorneys disclosed various confidential communications to opposing counsel &
the court), 1.7 (for largely the same reasons as those supporting our finding on rule 1.2),
and 1.9 (when plaintiff’s former attorneys opposed their own former client’s motion to
vacate the dismissal, arguably to preserve their ability to collect fees from the settlement
proceeds). We recognize plaintiff’s former attorneys did not appear in the proceedings
before this court, and therefore make no findings as to potential violations of these rules,
but nevertheless refer the issues to the State Bar for investigation.
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DISPOSITION
The judgment is reversed. Plaintiff shall recover costs on appeal. Pursuant
to Canon 3D(2) of the California Code of Judicial Ethics and California Business and
Professions Code section 6086.7, subdivision (a)(2), we hereby report Attorneys Kevin
Richard Jolly, Leah Neveen Berry, and Joseph John Nazarian to the State Bar of
California for their violations and potential violations of the Rules of Professional
Conduct, as described in this opinion. The clerk of this court is directed to send copies of
this opinion and the appendices filed herein by plaintiff to the State Bar of California.
The clerk is further directed to send a copy of this opinion to Attorneys Kevin Richard
Jolly, State Bar No. 172328, Leah Neveen Berry, State Bar No. 196505, and Joseph John
Nazarian, State Bar No. 299526, at their addresses listed by the State Bar.
THOMPSON, J.
WE CONCUR:
O’LEARY, P. J.
FYBEL, J.
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