Hance v. Super Store Indus., 44 Cal. App. 5th 676 (2020)

The attorneys who represented the employees in a class action filed a motion with the trial court for approval of a settlement of the action and also for an award of attorneys’ fees and a division of those fees among the lawyers in accordance with a fee division agreement that had been worked out among the lawyers. One of the lawyers challenged the fee division agreement on multiple grounds, including that one of the lawyers who was seeking enforcement of the agreement had failed to advise the clients that he lacked professional liability insurance as he was required to do by the California Rules of Professional Conduct. The trial court enforced the agreement, but the Court of Appeal reversed, holding that “[t]o allow [the attorney] to recover his agreed upon percentage of the attorney fee award, despite noncompliance with the requirements of the [insurance disclosure] rule, would effectively condone that violation, contrary to the purpose behind the rules.” The Court remanded the case to the trial court to determine what amount of fees the attorney should recover on a quantum meruit (i.e., equitable value) basis.