Berney Law Corp. v. ClubCorp Porter Valley Country Club CA2/7 ( 2023 )

Filed 5/18/23 Berney Law Corp. v. ClubCorp Porter Valley Country Club CA2/7
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California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
BERNEY LAW CORP., B313888
Cross-complainant and (Los Angeles County
Appellant, Super. Ct. No. BC669520)
v.
CLUBCORP PORTER
VALLEY COUNTRY CLUB,
INC. et al.,
Cross-defendants and
Respondents.
APPEAL from an order of the Superior Court of
Los Angeles County, Mel Red Recana, Judge. Affirmed.
Klapach & Klapach and Joseph S. Klapach for Cross-
complainant and Appellant.
Foley & Lardner, Thomas F. Carlucci and Jaime
Dorenbaum for Cross-defendants and Respondents ClubCorp
Porter Valley Country Club, Inc.; ClubCorp Club Operations,
Inc.; CCA Club Operation Holdings, LLC; ClubCorp Holdings,
Inc. and ClubCorp USA, Inc.
___________________
A qui tam plaintiff who prevails in or settles an action
under California’s False Claims Act (CFCA) (Gov. Code,
1
§ 12650 et seq.) is entitled to recover reasonable attorney fees
2
from the defendant. (§ 12652, subd. (g)(8).) If the qui tam
plaintiff and defendant settle their action, agreeing to bear their
own attorney fees, and the matter is dismissed with prejudice,
may the qui tam plaintiff’s counsel, who was not a party to the
action or a signatory to the settlement agreement, bring a
subsequent action against the settling defendant for statutory
attorney fees under section 12652? The trial court said no,
sustained the defendants’ demurrer without leave to amend and
dismissed the action by counsel for the qui tam plaintiff. We
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Qui Tam Lawsuit
Robert G. Bartlett, a former member of the Porter Valley
Country Club in Los Angeles, sued the club and related entities
1
Statutory references are to this code unless otherwise
stated.
2
“Qui tam is short for ‘qui tam pro domino rege quam pro se
ipso in hac parte sequitur,’ which means ‘who pursues this action
on our Lord the King’s behalf as well as his own.’” (Rockwell
International Corp. v. United States (2007) 549 U.S. 457, 463,
fn. 2; State ex rel. Bartlett v. Miller (2016) 243 Cal.App.4th 1398,
1402, fn. 1.)
2
3
(collectively ClubCorp) in 2011, alleging causes of action relating
to the club’s failure to refund his initiation deposit. Berney Law
Corporation, Bartlett’s counsel in that action, amended the
complaint in 2012 to add a CFCA cause of action on behalf of
Bartlett and the State of California, the qui tam claim, alleging
ClubCorp had failed to escheat to the State unclaimed initiation
deposits of ClubCorp’s members and former members in violation
of California’s Unclaimed Property Law (Code Civ. Proc.,
4
§ 1500 et seq.).
In accordance with CFCA requirements, Bartlett filed his
amended complaint under seal and served it on the State to allow
the State to decide whether to intervene and prosecute the CFCA
claim on its own behalf. In response, the State moved to dismiss
the qui tam claim as jurisdictionally barred under section 12652,
former subdivision (d)(3)(A), arguing ClubCorp had publicly
disclosed in filings with the United States Securities and
Exchange Commission its failure to escheat unclaimed deposits
to the State. The trial court granted the State’s motion (styled as
a motion to dismiss rather than a demurrer or motion for
judgment on the pleadings) and dismissed the qui tam claim,
prompting Bartlett to voluntarily dismiss his remaining causes of
action without prejudice and appeal from the judgment entered.
3
Bartlett’s lawsuit named ClubCorp Porter Valley Country
Club, Inc., ClubCorp Club Operations, Inc., CCA Club Operation
Holdings, LLC, ClubCorp Holdings, Inc. and ClubCorp USA, Inc.
as defendants.
4
Our recitation of the underlying qui tam claim borrows
from our opinion in State ex rel. Bartlett v. Miller, supra,
243 Cal.App.4th at pages 1407-1408, 1410-1414.
3
Bartlett was represented on appeal by Howarth & Smith.
We reversed, holding the trial court had applied an overly broad
interpretation of section 12652, former subdivision (d)(3)(A)’s
public disclosure bar (see State ex rel. Bartlett v. Miller (2016)
243 Cal.App.4th 1398, 1407-1408, 1410-1414) (State ex rel
Bartlett), and remanded for further proceedings (id. at p. 1415).
2. Settlement and Dismissal of Bartlett’s Action
Against ClubCorp
In March 2017, following issuance of our remittitur in State
ex rel Bartlett, Bartlett and ClubCorp settled the CFCA action for
$3.1 million, with each side agreeing to bear its own attorney fees
and costs. In accordance with the settlement terms, Howarth &
Smith, on Bartlett’s behalf, filed a request for dismissal with
5
prejudice of all Bartlett’s claims against ClubCorp. The request
for dismissal, filed on April 12, 2017 and entered the same day,
provided, “Each party is to bear its own respective fees and costs
related thereto.”
3. Post-dismissal Attorney Fee Agreement
On April 18, 2017, one day after Bartlett’s action against
ClubCorp was dismissed with prejudice, Bartlett entered into an
agreement with Berney Law and Howarth & Smith to pay each
firm a specified amount in attorney fees from the proceeds of the
settlement, nearly $1 million to Howarth & Smith and nearly
$1.2 million to Berney Law. When ClubCorp remitted the
$3.1 million in settlement funds to Howarth & Smith, the firm
5
The request for dismissal entered by the court clerk
specified all claims, including the qui tam claim, were dismissed
with prejudice as to Bartlett; the qui tam claim was dismissed
without prejudice as to the State.
4
transferred to Berney Law its share of the settlement proceeds
in accordance with the April 2017 fee agreement.
4. Berney Law’s and Bartlett’s Competing Claims for
Declaratory Relief
In July 2017 Bartlett repudiated the April 2017 fee
agreement to the extent it required him to pay Berney Law any
share of the settlement proceeds from the qui tam action and
demanded Berney Law return the settlement monies it had
obtained as fees. (Bartlett did not repudiate the agreement as to
Howarth & Smith.)
After Bartlett’s demand, Berney Law and Bartlett sued
each other for declaratory relief. Berney Law, the first to file,
sought a judicial declaration the April 2017 fee agreement was
valid and enforceable. Alternatively, Berney Law requested “an
award of attorney’s fees and/or quantum meruit as deemed
appropriate by the Court.”
Bartlett cross-complained, requesting a judicial declaration
the April 2017 attorney fee agreement with Berney Law was
unenforceable as the product of fraud and elder abuse. Bartlett
alleged he had retained Berney Law in 2011 on a contingency fee
basis to sue ClubCorp on his behalf for matters relating to his
membership. In February 2014, after Berney Law had amended
Bartlett’s complaint to add a qui tam cause of action and the
State responded by filing a motion to dismiss, Bartlett entered
into a new fee agreement with Berney Law and Howarth &
Smith that expressly superseded his 2011 contingency fee
agreement with Berney Law. According to Bartlett, the February
2014 agreement provided his attorneys would receive no fees if
the State’s then-pending motion to dismiss the qui tam cause of
action was granted. In June 2014, after the State’s motion was
5
granted, Bartlett entered into a new agreement with Howarth &
Smith for additional legal work on the qui tam action in exchange
for a percentage of any recovery. After the court of appeal
revived the qui tam action, the parties settled; and ClubCorp
remitted $3.1 million in settlement funds for Howarth & Smith to
distribute. Immediately thereafter, Bartlett alleged, Berney Law
falsely told Bartlett it was entitled to 50 percent of the settlement
proceeds based on their 2011 contingency fee agreement. When
Berney Law presented Bartlett with a new attorney fee
agreement on April 18, 2017 (a date Berney Law knew was the
“busiest day of the year” for Bartlett, a tax accountant) and
demanded that he sign it and agree to provide Berney Law with
39 percent of the settlement proceeds as attorney fees, Bartlett
did so.
5. Berney Law’s Cross-complaint and First Amended Cross-
complaint Against ClubCorp
Berney Law cross-complained against ClubCorp for
declaratory relief, seeking a judicial declaration that, in the event
the April 2017 fee agreement with Bartlett was declared legally
invalid, ClubCorp was directly liable to Berney Law pursuant to
section 12652, subdivision (g)(8), for Berney Law’s statutory
attorney fees.
In its original cross-complaint against ClubCorp, filed
February 22, 2018, Berney Law alleged, “Pursuant to the
March 27, 2017 settlement agreement between Bartlett and
[ClubCorp], Bartlett agreed to pay [Berney Law]’s attorney’s fees
and costs. The amount of [Berney Law]’s attorney’s fees and
costs was agreed to by and between Bartlett and [Berney Law]”
in an April 2017 agreement prepared by Berney Law’s co-counsel
in the qui tam action, Don Howarth of Howarth & Smith. In
6
reliance on the March 27, 2017 settlement agreement and the
April 18, 2017 fee agreement, Berney Law “did not pursue its
statutory claim for attorney’s fees and costs” against ClubCorp.
Berney Law acknowledged that paragraph 9 of the
settlement agreement between Bartlett and ClubCorp provided,
“The Parties to this Agreement shall bear their own attorneys’
fees, costs, and expenses. ClubCorp shall not be liable to
Bartlett’s current or former counsel for attorneys’ fees, costs, or
expenses, and if Bartlett’s current or former counsel asserts an
attorney’s lien or otherwise seeks any fees or costs from ClubCorp
related to the Lawsuit, Bartlett shall indemnify and hold
ClubCorp harmless.” However, Berney Law continued, “[Berney
Law] was not a party to” the settlement agreement and thus
“never waived its claims or rights to recovery of attorney’s fees
and expenses from ClubCorp.”
Berney Law also admitted it had received $1,193,133.63 in
fees and costs from the settlement proceeds. However, because
Bartlett had repudiated the April 2017 fee agreement and filed
suit to have that agreement declared invalid, Berney Law had no
choice but to file a protective cross-complaint seeking a judicial
declaration that ClubCorp was directly liable to Berney Law for
statutory attorney fees under section 12652, subdivision (g)(8), in
the event the April 2017 fee agreement was nullified.
Berney Law’s first amended cross-complaint included
essentially the same allegations, except it deleted any reference
to paragraph 9 of the confidential settlement agreement relating
to attorney fees.
7
6. ClubCorp’s Successful Demurrer to the First Amended
Cross-complaint
ClubCorp demurred to Berney Law’s first amended cross-
complaint, asserting Berney Law had failed to allege facts
sufficient to state a cause of action. ClubCorp argued
section 12652, subdivision (g)(8), conferred on the qui tam
plaintiff, not plaintiff’s counsel, the right to demand fees from
defendant; Bartlett had waived the right in the settlement
agreement in which the parties expressly agreed to bear their
own fees and costs; and the matter was dismissed against
ClubCorp with prejudice. ClubCorp argued it had no further
liability for fees as a matter of law. In addition, ClubCorp argued
there was no present controversy between the parties that
provided the basis for declaratory relief because Berney Law had
received its attorney fees, and ClubCorp was not claiming a right
to them. Together with its demurrer and supporting papers,
ClubCorp requested the court take judicial notice of several
documents, including the confidential settlement agreement filed
under seal, the April 12, 2017 order dismissing the qui tam action
against ClubCorp with prejudice and Russell Berney’s deposition
testimony describing his direct participation in the parties’
settlement agreement.
Berney Law opposed the demurrer, arguing the right to
statutory attorney fees under section 12652 belonged as a matter
of law to the plaintiff’s counsel in the qui tam action, who had
earned them. Berney Law argued it was not a party to the
qui tam action or settlement agreement and thus did not waive
its right to statutory attorney fees under section 12652,
subdivision (g)(8), and was not bound by the dismissal of that
action with prejudice.
8
The trial court took judicial notice of the request for, and
entry of, dismissal of the qui tam lawsuit with prejudice, but
otherwise denied ClubCorp’s request for judicial notice. Relying
on United States ex rel. Virani v. Jerry M. Lewis Truck Parts &
Equipment, Inc. (9th Cir. 1996) 89 F.3d 574 (Virani), which
interpreted an analogous fee-shifting provision under the federal
False Claims Act (FCA) (31 U.S.C. § 3730), the court ruled that
only the plaintiff has standing to request statutory fees. While
Virani also held that once asked for and awarded, the fees
belonged to the attorneys, no such fees were demanded by
Bartlett, who had waived them. The court sustained ClubCorp’s
demurrer and granted Berney Law leave to amend.
7. Berney Law’s Operative Second Amended Cross-
complaint
Berney Law filed a second amended cross-complaint, again
alleging a cause of action for declaratory relief and adding a new
cause of action for promissory estoppel. In an apparent effort to
remedy the deficiencies the court identified in its earlier ruling,
Berney Law added the following allegations:
In paragraph 13 Berney Law alleged that in a February
2014 attorney fee agreement between it and Bartlett, “Bartlett
agreed that the right to collect any statutory attorney’s fees,
including without limitation those available under Government
Code section 12652(g)(8), belonged to Bartlett’s attorneys,”
including Berney Law.
In paragraph 14 Berney Law alleged, “Upon information
and belief, Bartlett had the power to demand that [ClubCorp] pay
statutory attorney’s fees . . . and Bartlett exercised that power in
the Qui Tam Lawsuit. [O]nce that power was exercised by
Bartlett, BLC’s [Berney Law’s] right to collect the statutory
9
attorney’s fees vested in BLC and [ClubCorp’s] duty to pay the
attorney’s fees became fixed upon, among other things,
settlement of the Qui Tam Lawsuit.” “[W]hen Bartlett and
[ClubCorp] settled the Qui Tam Lawsuit, the statutory attorney’s
fees rights provided by Section 12652(g)(8) were triggered.”
Finally, in paragraph 16 Berney Law alleged, “In the
Settlement Agreement, Bartlett and [ClubCorp] agreed to pay
BLC’s attorney’s fees and costs from the settlement monies. The
specific dollar amount of BLC’s attorney’s fees and costs was
agreed to by and between Bartlett and BLC” in the April 2017
postjudgment attorney fee agreement.
ClubCorp again demurred, asserting the new allegations
failed to remedy the deficiencies in the first amended cross-
complaint relating to lack of standing. It also argued the
allegation concerning ClubCorp’s agreement to pay Berney Law’s
fees was a sham amendment, contradicted by the allegations in
Berney Law’s original cross-complaint.
The trial court agreed with ClubCorp and sustained
ClubCorp’s demurrer to the declaratory relief action in the
operative second amended complaint without leave to amend.
The court sustained the demurrer to the promissory estoppel
cause of action in that pleading with leave to amend.
8. Berney Law’s Third Amended Cross-complaint,
ClubCorp’s Demurrer and Entry of Judgment
Berney Law filed a third amended cross-complaint alleging
promissory estoppel and purporting to allege new causes of action
for rescission of the settlement agreement as a third party
beneficiary of that agreement and unjust enrichment. The trial
court sustained ClubCorp’s demurrer to that pleading without
10
leave to amend and entered judgment in ClubCorp’s favor on
6
Berney Law’s cross-complaint. Berney Law timely appealed.
DISCUSSION
1. Standard of Review
A demurrer tests the legal sufficiency of the factual
allegations in a complaint. We independently review the trial
court’s ruling on a demurrer and determine de novo whether the
complaint alleges facts sufficient to state a cause of action or
discloses a complete defense. (Mathews v. Becerra (2019)
8 Cal.5th 756, 768; T.H. v. Novartis Pharmaceuticals Corp. (2017)
4 Cal.5th 145, 162.) We assume the truth of the properly pleaded
factual allegations, facts that reasonably can be inferred from
those expressly pleaded and matters of which judicial notice has
properly been taken. (Evans v. City of Berkeley (2006) 38 Cal.4th
1, 20; accord, Centinela Freeman Emergency Medical Associates v.
Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010;
Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
We affirm the judgment if it is correct on any ground stated
in the demurrer, regardless of the trial court’s stated reasons
(Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967;
Regina v. State of California (2023) 89 Cal.App.5th 386, 396-397),
but liberally construe the pleading with a view to substantial
justice between the parties. (Code Civ. Proc., § 452; Ivanoff v.
6
Because Berney Law’s appeal focuses on the court’s ruling
on the second amended cross-complaint and does not challenge
the propriety of the court’s ruling on the third amended cross-
complaint, we do not recite in detail the substance of that latter
pleading.
11
Bank of America, N.A. (2017) 9 Cal.App.5th 719, 726; see
Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.)
2. CFCA and Attorney Fees
CFCA is designed to prevent fraud on the public treasury.
(State of California v. Altus Finance (2005) 36 Cal.4th 1284, 1296;
State ex rel. Bartlett, supra, 243 Cal.App.4th at p. 1405.) To
assist the State and its political subdivisions in their efforts to
protect the public fisc, CFCA authorizes private parties, referred
to as qui tam plaintiffs or relators, to prosecute the claim for, and
in the name of, the government entity. (State ex rel. Bartlett, at
p. 1406; see John Russo Industrial Sheetmetal, Inc. v. City of
Los Angeles Dept. of Airports (2018) 29 Cal.App.5th 378, 384
[“CFCA ‘is intended to “‘“supplement governmental efforts to
identify and prosecute fraudulent claims made against state and
local governmental entities”’”’”].) The State or its political
subdivision may elect to intervene and assume control of the
lawsuit (§ 12652, subd. (c)(4)-(8)), or not to intervene, leaving the
qui tam plaintiff to prosecute the action on the State’s behalf.
(§ 12652, subd. (c)(6)(B), (7)(D)(ii), (8)(D)(iii); see State ex rel.
Harris v. PricewaterhouseCoopers, LLP (2006) 39 Cal.4th 1220,
1228.)
To encourage private parties to initiate such actions, CFCA
authorizes the qui tam plaintiff to recover a percentage of the
proceeds recovered for the State or its political subdivision, with
the minimum and maximum percentages of the recovery
dependent on whether or not the State intervened. (See § 12652,
subd. (g)(2), (3).) In addition, as pertinent here, section 12652,
subdivision (g)(8), provides, “If the state, political subdivision, or
the qui tam plaintiff prevails in or settles” the qui tam action,
“the qui tam plaintiff shall receive” from the defendant
12
reasonable expenses necessarily incurred “plus reasonable costs
7
and attorney’s fees.”
3. The Court Did Not Err in Ruling ClubCorp Was Not
Liable to Berney Law for Statutory Attorney Fees as a
Matter of Law
In interpreting section 12652, subdivision (g)(8), our
“‘fundamental task here is to determine the Legislature’s intent
so as to effect the law’s purpose.’ [Citation.] ‘We begin by
examining the statutory language, giving it a plain and
commonsense meaning. [Citation.] We do not, however, consider
the statutory language in isolation; rather, we look to the entire
substance of the statutes in order to determine their scope and
purposes. [Citation.] That is, we construe the words in question
in context, keeping in mind the statutes’ nature and obvious
purposes. [Citation.] We must harmonize the various parts of
the enactments by considering them in the context of the
statutory [framework] as a whole. [Citation.] If the statutory
language is unambiguous, then its plain meaning controls. If,
however, the language supports more than one reasonable
construction, then we may look to extrinsic aids, including the
ostensible objects to be achieved and the legislative history.’”
(Skidgel v. California Unemployment Ins. Appeals Bd. (2021)
12 Cal.5th 1, 14.)
The plain language of section 12652, subdivision (g)(8),
requires the court to award reasonable attorney fees to the “qui
7
Section 12652, subdivision (g)(8), also provides in part, “All
expenses, costs, and fees shall be awarded against the defendant
and under no circumstances shall they be the responsibility of the
state or political subdivision.”
13
tam plaintiff” who prevails in or settles the action, not his or her
counsel. Federal courts interpreting federal fee-shifting statutes
authorizing attorney fee awards to the prevailing party have held
that such language confers the right to attorney fees to the
“prevailing party,” not its counsel. (See, e.g., Astrue v. Ratliff
(2010) 560 U.S. 586, 581 [prevailing litigant, rather than her
lawyer, is entitled to fees under a fee-shifting provision of the
Equal Access to Justice Act (28 U.S.C. § 2412(d)(1)(A))]; Venegas
v. Mitchell (1990) 495 U.S. 82, 89 [entitlement to attorney fee
award under federal civil rights fee-shifting provision (42 U.S.C.
§ 1988) belongs to the party, not its counsel]; Virani, supra,89 F.3d 574 [interpreting analogous fee-shifting provision under
FCA].)
Relying on Flannery v. Prentice (2001) 26 Cal.4th 572(Flannery), which interpreted a fee-shifting provision under the
Fair Employment and Housing Act (FEHA) awarding fees to the
8
prevailing party, Berney Law contends the California Supreme
Court has rejected the federal courts’ narrow interpretations of
fee-shifting statutes that deny counsel the direct right to a
statutory attorney fee award. In Flannery a jury awarded the
plaintiff $250,000, and the court awarded her statutory attorney
fees in the amount of $900,000. Plaintiff and her counsel then
disputed who was entitled to the fee award. The plaintiff sued
her former attorneys in a separate action for declaratory relief,
asserting that she, as the prevailing party, was entitled to the
8
Section 12965, subdivision (c)(6), part of FEHA, authorizes
the court, in its discretion, to award to “the prevailing party”
reasonable attorney fees and costs, except that the prevailing
defendant is not entitled to such costs and fees absent a finding
the action was frivolous.
14
full amount of statutory fees awarded in the earlier action, not
her counsel. The attorneys cross-claimed, seeking a declaration
they were entitled to the fee award in full and, in the alternative,
sought recovery in quantum meruit. (Id. at pp. 576-577.)
Identifying the question before it as “to whom, as between
attorney and client, attorney fees awarded under [FEHA] belong
when no contractual agreement provides for their disposition”
(Flannery, supra, 26 Cal.4th at p. 575, fn. omitted), the Supreme
Court held attorney fee awards pursuant to section 12965,
excluding fees already paid, belonged, absent an agreement to the
contrary, to the “attorneys who labored to earn them.” (Id. at
pp. 575, 590.) Highlighting the ambiguity inherent in the
statute’s use of “prevailing party” (see id. at p. 578 [the phrase
“prevailing party” “does not unambiguously favor plaintiff”]) and
examining the purpose of the fee-shifting provision, the Court
explained attorney fee awards are intended as compensation to
the attorneys and, absent an agreement otherwise, belong to
them, not the party. (See id. at p. 583 [“were we to interpret
section 12965 as plaintiff urges, vesting ownership of fees
awarded thereunder and not disposed of by contract in the
litigant, rather than in counsel, we would diminish the certainty
that attorneys who undertake FEHA cases will be fully
compensated, and to that extent we would dilute section 12965’s
effectiveness at encouraging counsel to undertake FEHA
litigation,” thus undermining FEHA’s purpose in providing
effective remedies to eliminate discriminatory practices].) The
Court also observed its interpretation was consistent with public
policy. (Id. at p. 584 [our interpretation “[e]ncourage[s]
representation of legitimate FEHA claimants, discourage[s]
15
nonmeritorious suits” among other harms, and avoids unjust
enrichment to the litigant].)
California courts since Flannery, supra, 26 Cal.4th 572have interpreted California fee-shifting statutes outside the
FEHA context similarly, holding that, as between the party
awarded fees and its counsel, the fee award belongs to the
attorney. (See, e.g., Aerotek, Inc. v. Johnson Group Staffing Co.,
Inc. (2020) 54 Cal.App.5th 670, 680-682 [relying on Flannery to
hold, in a dispute between party and its counsel over fees
awarded to party under Uniform Trade Secrets Act (Civ. Code,
§ 3426 et seq.), the award belonged to counsel absent agreement
providing otherwise]; Henry M. Lee Law Corp. v. Superior Court
(2012) 204 Cal.App.4th 1375, 1388 [holding “in accordance with
Flannery, supra, 26 Cal.4th 572, 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”].)
Relying on Flannery, supra, 26 Cal.4th 572 and Aerotek,
supra, 54 Cal.App.5th 670, Berney Law contends that, in the
event its April 2017 fee agreement is not “enforceable,” the
Flannery rule governing the FEHA fee-shifting statute should
also apply by analogy to section 12652. That is, Berney Law
argues, it is entitled to pursue its statutory fees directly from
ClubCorp.
Flannery does not assist Berney Law. Flannery addressed
to whom fees awarded by the court belonged and determined, “as
between the plaintiff and her counsel,” they belonged to counsel
absent a contrary agreement. Here, no fees were awarded at all.
16
(See Beard v. Goodrich (2003) 110 Cal.App.4th 1031, 1036
[“Flannery applies only to court-awarded fees. Here as discussed
above, there are no court-awarded fees. The vacation of the
judgment effectively eliminated the fee award. Nothing in
Flannery supports the notion that an attorney is entitled to a fee
award that was vacated as part of a postjudgment settlement”];
see also Churchill Village, L.L.C. v. General Electric (9th Cir.
2004) 361 F.3d 566, 579, fn. 12 [despite some language in
Flannery “suggesting that an analogous state-law attorneys’ fees
statute might confer standing on an attorney in order to recover
fees, that case arose in the context of, and was limited to, an
attorney-client dispute over fee ownership”].)
Berney Law contends support for its standing to seek fees
directly against ClubCorp can be found in cases since Flannery
that recognized an attorney’s right to intervene in an action to
protect its interest in statutory attorney fees. In Lindelli v. Town
of San Anselmo (2006) 139 Cal.App.4th 1499 (Lindelli) the
appellate court addressed “whether attorneys acting on their own
behalf can intervene in a client’s lawsuit and move for attorney
fees under Code of Civil Procedure section 1021.5[9] which
provides for fee awards in cases resulting in the enforcement of
important rights affecting the public interest.” (Id. at p. 1501.)
After losing in the trial court and then prevailing on appeal, the
9
Code of Civil Procedure section 1021.5 provides in part,
“Upon motion, a court may award attorneys’ fees to a successful
party against one or more opposing parties in any action which
resulted in the enforcement of an important right affecting the
public interest” if the action conferred a significant benefit on the
general public or large class of persons and the necessity and
financial burden of enforcement make the award appropriate.
17
plaintiffs refused to authorize their attorneys to file a motion for
attorney fees in the trial court. The attorneys moved to intervene
to file a motion for attorney fees on their own behalf. The trial
court denied the motion for lack of standing because Code of Civil
Procedure section 1021.5 authorized attorney fees to the
“prevailing party,” not the party’s counsel. The court of appeal
reversed. Finding Code of Civil Procedure section 1021.5’s fee-
shifting statute markedly similar in language to FEHA’s attorney
fee provision construed in Flannery, supra, 26 Cal.4th 572, the
court of appeal held Flannery’s analysis applicable: That is,
absent an agreement otherwise, attorney fees awarded pursuant
to Code of Civil Procedure section 1021.5 belonged to the
attorneys, not the prevailing litigant. Because the attorneys had
a right to any fees ultimately awarded, the court explained, they
“ha[d] a sufficiently direct and immediate interest to permit
intervention and a motion for an award of [statutory] fees under
section 1021.5.” (Lindelli, at p. 1512.)
Similarly, in Ruiz v. California State Automobile Assn.
Inter-Insurance Bureau (2013) 222 Cal.App.4th 596 (Ruiz), the
plaintiff, on behalf of himself and a class of consumers, sued an
insurer alleging the insurer had engaged in false and misleading
billing practices. The parties ultimately settled their dispute and
entered into a settlement agreement giving class counsel the
right to seek an award of attorney fees from the court and
requiring class counsel to accept, “in full satisfaction of their
right to attorney fees, either the maximum specified in the
[agreement] or the amount awarded by the trial court, whichever
was less.” (Id. at p. 601.) After the trial court approved the
settlement and awarded attorney fees to class counsel in an
amount considerably less than counsel requested, counsel
18
appealed. The insurer argued class counsel lacked standing to
challenge the fee award directly because it had not formally
intervened in the action. The court rejected that argument,
holding that, despite the lack of class counsel’s formal
intervention, “we are persuaded that the analysis in Lindelli,
supra, 139 Cal.App.4th 1499, extending the logic in Flannery,
supra, 26 Cal.4th 572, leads inexorably to the conclusion that
class counsel have standing, in their own right, to litigate the
amount of attorney fees, both in the trial court and on appeal.”
(Ruiz, at p. 610.)
Berney Law paints the issue presented in the case at bar as
a conflict between federal authorities narrowly interpreting
federal fee-shifting statutes to limit fee awards to the party
rather than counsel, on the one hand, and state authorities,
following Flannery, supra, 26 Cal.4th 572, construing state fee-
shifting statutes as conferring on counsel a “right” to a statutory
fee award, on the other hand, and insists state law controls. (See
Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 569
[“United States Supreme Court interpretation of federal statutes
does not bind us to similarly interpret state statutes. Indeed, in
the realm of attorney fees for private attorneys general, this court
has markedly diverged from United States Supreme Court
precedent”]; see also Lindelli, supra, 139 Cal.App.4th at p. 1515
[federal courts’ interpretations of federal fee-shifting provisions
such as found in Virani, supra, 89 F.3d 574, “cannot be the law in
California after Flannery”].)
However, construing section 12652, subdivision (g)(8), in
accordance with Flannery, supra, 26 Cal.4th 572 and its progeny,
rather than federal law, does not support Berney Law’s right to
sue ClubCorp for statutory attorney fees waived by Bartlett in
19
the March 2017 settlement agreement. As discussed, the case at
bar is not a conflict between Bartlett and Berney Law over a
statutory fee award. And, if anything, Lindelli, supra,
139 Cal.App.4th 1499 and Ruiz, supra, 222 Cal.App.4th 596,
undermine Berney Law’s contention that counsel possesses not
simply the right to an award as between counsel and client, but
also the right to pursue fees directly against the defendant in a
separate action. As Lindelli recognized, the very purpose of
counsel’s intervention is to permit counsel to protect an interest
in a potential fee award that a party might waive. If counsel
could simply proceed against the defendant directly in a separate
action for statutory fees, there would be no need for intervention.
(Cf. Lindelli, at p. 1512 [“Under Flannery [citation], the attorney
is entitled to fees awarded unless an agreement specifies
otherwise. By application of Flannery’s reasoning to the term
‘successful party’ in [Code of Civil Procedure] section 1021.5,
RJP’s [law firm’s] interest in a fee award will be directly and
adversely affected if a final judgment issues prior to a motion for
fees. RJP will forever lose the right to collect fees from defendant
under section 1021.5. RJP has a sufficiently direct and
immediate interest to permit intervention and a motion for an
award of fees under section 1021.5”].)
Berney Law did not seek to intervene in the action to
protect its interest in a statutory fee award (see Lindelli, supra,
139 Cal.App.4th 1499), nor did it effect a settlement agreement
that contemplated a court order of statutory fees (see Ruiz, supra,
222 Cal.App.4th 596). Instead, by Berney Law’s own admission,
Berney Law and Bartlett agreed Berney Law would obtain a
portion of the settlement proceeds as attorney fees. ClubCorp, for
its part, bargained for, and received, a settlement and dismissal
20
of the action with prejudice relieving it from any further
obligation to pay statutory attorney fees. If the April 2017
attorney fee agreement is declared unenforceable due to Berney
Law’s own improper actions (as opposed to ClubCorp’s), as
Bartlett has alleged, it simply does not follow that Berney Law is
rewarded with standing to proceed against ClubCorp in a
separate action. Indeed, Berney Law cites no case, and we are
not aware of any, that allows counsel to proceed against the
settling defendant for statutory fees following dismissal of the
action with prejudice when no fees were awarded in the
underlying case, no provision was made in the settlement
agreement for counsel to obtain a fee award, the parties expressly
agreed to bear their own fees, and counsel concedes it made
alternative arrangements with its client to obtain fees from the
settlement.
Berney Law’s contention it was not a party to the
settlement agreement between Bartlett and ClubCorp and did
not waive its “right to proceed” against ClubCorp for statutory
fees thus misapprehends whatever right it may have to request
fees in the qui tam action itself. As discussed, Berney Law may
well have had the right to claim entitlement to section 12652,
subdivision (g)(8), fees awarded to Bartlett (cf. Flannery, supra,26 Cal.4th 572; Aerotek, supra, 54 Cal.App.5th 670), to intervene
in the qui tam action to protect its interest in one (see Lindelli,
supra, 139 Cal.App.4th 1499) or to effect a settlement that
contemplated a fee award (see Ruiz, supra, 222 Cal.App.4th 596).
Having elected instead to rely on a separate agreement, Berney
Law, in effect, waived whatever basis it may have otherwise had
to pursue a claim for statutory fees in the action directly against
ClubCorp. (Cf. Lindelli, at p. 1512.)
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Berney Law asserts the finding it lacks standing to proceed
directly against ClubCorp for statutory attorney fees will
undermine CFCA’s purpose and intent to incentivize attorneys to
represent parties in qui tam actions. A qui tam plaintiff could, as
Bartlett did here, waive his or her right to statutory attorney
fees, keep a “windfall” of a settlement that was intended to
include attorney fees, and leave counsel out in the cold. However,
a prudent attorney will protect against that outcome by entering
a fair, noncoercive fee agreement with his or her client.
Moreover, as Berney Law well knows because it included such a
claim in its complaint against Bartlett, even without an
agreement the plaintiff is not entitled to keep the windfall; and
counsel is not without a remedy. Counsel may proceed in
quantum meruit for reasonable attorney fees (see generally
Flannery, supra, 26 Cal.4th at p. 588 [“[p]laintiff correctly points
out, also, that our construing section 12965 in her favor would
not diminish defendants’ right to enforce any compensation right
in quantum meruit”]), which is all section 12652,
subdivision (g)(8), affords in any event.
4. Berney Law Has Not Alleged an Assignment of Bartlett’s
Rights To Seek Statutory Attorney Fees
Berney Law also argues, if we disagree it is entitled to
proceed against ClubCorp for statutory fees pursuant to
Flannery, supra, 26 Cal.4th 572, it has standing to seek fees
based on a February 2014 fee agreement in which Bartlett
“agreed that the right to collect any statutory attorney’s fees,
including without limitation those available under Government
Code section 12652(g)(8), belonged to Bartlett’s attorneys,”
including Berney Law. Assuming that allegation is true, as we
must, all that means is that Bartlett agreed any statutory fees
22
awarded in the action, as between Berney Law and Bartlett,
belonged to Berney Law. But, as discussed, there was no
court-awarded fee. This allegation does not salvage Berney Law’s
10
operative second amended complaint.
DISPOSITION
The order of dismissal is affirmed. ClubCorp is to recover
its costs on appeal.
PERLUSS, P. J.
We concur:
SEGAL, J.

ESCALANTE, J.
10
Berney Law’s allegation that ClubCorp had agreed to pay
Berney Law its attorney fees directly contradicted Berney Law’s
allegations in every prior iteration of its cross-complaint against
ClubCorp. The court did not err in rejecting that allegation as a
sham amendment. (Tindell v. Murphy (2018) 22 Cal.App.5th
1239, 1249 [“plaintiff cannot avoid allegations that are
determinative to a cause of action simply by filing an amended
complaint which omits the problematic facts or pleads facts
inconsistent with those alleged in the original complaint”].)

Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
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