Birbrower, Montalbano, Condon & Frank, P.C. v. The Superior Court Of Santa Clara County

949 P.2d 1 (1998)

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Nature of the Case

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Facts

P is a California corporation with its principal place of business in Santa Clara County. P and D negotiated and executed the fee agreement in New York, providing that D would perform legal services for P. The agreement included all matters pertaining to the investigation of and prosecution of all claims and causes of action against Tandem Computers. Tandem is a Delaware corporation with its principal place of business in Santa Clara County, California. There was a software development and marketing contract between Tandem and P dated March 16, 1990 (Tandem Agreement). The Tandem Agreement stated that 'The internal laws of the State of California (irrespective of its choice of law principles) shall govern the validity of this Agreement, the construction of its terms, and the interpretation and enforcement of the rights and duties of the parties hereto.' D asserts, and P disputes, that P knew D was not licensed to practice law in California. Lawyers from D traveled to California on several occasions. While in California they discussed various matters related to P's dispute with Tandem and strategy for resolving the dispute. Ds also met with Tandem representatives on four or five occasions during which Ds spoke on P's behalf. D demanded that Tandem pay P $ 15 million. D told Tandem that damages would exceed $15 million if the parties litigated the dispute. Ds visited California to interview potential arbitrators and to meet again with P and its accountants. D filed a demand for arbitration against Tandem with the San Francisco offices of the American Arbitration Association (AAA). Ds again returned to California to assist P in settling the Tandem matter. D met with P and its accountants to discuss a proposed settlement agreement Tandem authored. D also met with Tandem to discuss possible changes in the proposed agreement. D gave P legal advice during this trip, including his opinion that P should not settle with Tandem on the terms proposed. P and Tandem settled. Before settlement P and D modified the contingency fee agreement to a fixed fee agreeement for P to pay D over $1 million. The original agreement was for 1/3^rd. P then sued D for legal malpractice. D moved for summary judgment arguing that by practicing law without a license in California and by failing to associate legal counsel while doing so, D violated section 6125, rendering the fee agreement unenforceable. The court granted P's motion for summary judgment. The trial court left open P's malpractice action against D, and the remaining causes of action in D's counterclaim, including d's fifth cause of action for quantum meruit (seeking the reasonable value of legal services provided). The Court of Appeal denied D's petition and affirmed the trial court's order. The Court of Appeal agreed with the trial court but held that D was precluded from seeking fees generated in New York under the fee agreement. D appealed.