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Absent an agreement to contrary, attorney fees awarded under the Labor Code are payable to attorney and not the client

Henry M. Lee Law Corp. v. Superior Court (2012) 204 Cal.App.4th 1375, 139 Cal.Rptr.3d 712

Background: Petitioner, Henry M. Lee represented Ok Song Chang (Chang) as her attorney in employment litigation. The jury awarded the plaintiff $62,246.74 in compensatory damages as well as $300,000 in attorney fees under Labor Code Sections 1194(a) and 226(e). Chang later substituted herself in propria persona for her former attorney. Thereafter, Henry M. Lee Law Corporation filed an ex parte application seeking (1) leave to intervene in the action and (2) to vacate the postjudgment order awarding attorney fees, and to make the fee award payable to Law Corporation.

Court History: The trial court denied the motion of the attorney and attorney petitioned for writ of mandate.

Pertinent Issues addressed: In reaching its judgment, the Court of Appeal referred to Flannery v. Prentice (2001) 26 Cal.4th 572, 110 Cal.Rptr.2d 809 in which the California Supreme Court held that attorney fees in California Fair Employment and Housing Act (FEHA) cases “belong, absent an enforceable agreement to the contrary, to the attorneys who labored to earn them.” Supreme Court stated that, “construing Government Code section 12965, subdivision (b) as vesting ownership of attorney fees in the litigant rather than in counsel, absent a contract providing for a contrary disposition of a fee award, would diminish the certainty that attorneys who undertake FEHA cases will be fully compensated and to that extent would be contrary to the legislative intent of encouraging counsel to undertake FEHA litigation.”

In accordance with Flannery v. Prentice (2001) 26 Cal.4th 572, 110 Cal.Rptr.2d 809, the Court of Appeal held that, “absent a contract determining a different disposition of an attorney fee award, attorney fees awarded under Labor Code sections 1194, subdivision (a) and 226, subdivision (e), in excess of fees already paid to the attorneys by the client, should be made payable directly to the attorney who provided the legal services.”

Pointers:

  • The case clarifies the issue of whether the client or the attorney is entitled to the fee award and further encourages counsel to undertake FEHA litigations.