Marriage Of Georgiou & Leslie

218 Cal.App.4th 561 (2013)

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Nature of the Case

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Facts

H and W married in 1985 and separated in 2003. H filed for dissolution that year, and a bifurcated judgment terminated the marital status in 2005. H is an attorney, and in 2000 he entered into an “of counsel” relationship with Milberg Weiss Bershad Hynes & Lerach LLP (Milberg) that entitled him to a referral fee of 10 percent in class action litigation in which H secured the plaintiff, and the firm was designated, lead counsel. In 2002, Milberg entered into a contingency fee agreement with The Regents of the University of California which was ultimately designated the lead plaintiff in federal class action securities litigation against Enron. The agreement authorized attorney fees of between 8 and 10 percent of the recovery. In February 2007, H and W entered into an MSA. W knew of H's referral fee agreement and that approximately $7.2 billion in settlement funds had been recovered. W knew that Milberg would be submitting a request for attorney fees in federal district court under its fee agreement with the Regents. H did not give W a copy of the fee agreement. W deposed Robbins, a Milberg partner. Robbins testified the federal district court must approve a fee award based on a variety of factors, and it is not bound by a fee agreement. W did not ask what the proposed fee was, nor did she ask for a copy of the agreement. Robbins testified that H was entitled to a referral fee, but there was a dispute as to the amount of the fee. Robbins could not imagine any scenario under which H would receive less than three percent. W knew H's referral fee may be between $9 and $33 million. These were all estimates as everyone knew everyone involved was going for a maximum amount. W agreed to accept 10 percent of the fee, in exchange for approximately $7 million in other assets and debt relief. She received the family home, even though it was H's separate property, eight townhomes that produced net monthly income, a Roth IRA and retirement accounts. H received 90 percent of his referral fee, life insurance policies, loan receivables, business interests, and substantial credit card and other debt. The MSA was incorporated the dissolution on December 12, 2007. Shortly thereafter, Milberg submitted its fee application requesting 9.52 percent of the ultimate recovery of approximately $7.2 billion, pursuant to the terms of its fee agreement with the Regents. The court awarded Milberg $688 million in fees. Milberg negotiated a 9 percent referral fee with H. H paid W $4 million for her 10 percent share of the fee. W retained a new attorney, and in November 2009 she filed a motion under section 2122, subdivision (d), to set aside the judgment based on her mental incapacity. In September 2010 after retaining yet another attorney, W dismissed the motion. On December 13, 2010, w filed this action under section 1101 for H's breach of his fiduciary duty of disclosure. H moved for summary adjudication because it was not filed within three years from the date she had “actual knowledge that the transaction or event for which the remedy is being sought occurred.” The court determined relief for breach of fiduciary duty under section 1101 “is not legally available in a post-marital dissolution judgment action.” W did not qualify for Section 2122 because its limitations period was one-year. W appealed.