1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

FILED

NOV 29 2016

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOTFOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. EC-15-1311-JuKuMa

)

SHAVER LAKEWOODS DEVELOPMENT ) Bk. No. 11-62509

INC., )

) Adv. No. 14-01005

Debtor. )

______________________________)

HENRY DORAME NUNEZ, )

)

Appellant, )

)

v. ) M E M O R A N D U M*

)

RANDELL PARKER, Chapter 7 )

Trustee, )

Appellee. )

______________________________)

Argued and Submitted on October 20, 2016

at Sacramento, California

Filed - November 29, 2016

Appeal from the United States Bankruptcy Court

Eastern District of California, Sacramento

Honorable Fredrick E. Clement, Bankruptcy Judge, Presiding

__________________________________

Appearances: Appellant Henry Nunez argued pro se; Lisa Anne 

Holder of Klein Denatale Goldner Cooper Rosenlieb

& Kimball, LLP argued for appellee Randell

Parker, Chapter 7 Trustee

__________________________________

* This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8013-1.

-1-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Before: JURY, KURTZ, and MARTIN,** Bankruptcy Judges.

Appellant Henry Nunez (“Nunez”) appeals from the bankruptcy

court’s judgment in favor of the chapter 71 trustee Randell

Parker (“Trustee”) determining (1) Nunez’s attorney’s lien,

which was purportedly secured by real property, was invalid

under Rule 3-300 of the California Rules of Professional

Conduct, (2) Nunez does not hold an equitable lien on the real

property, and (3) Nunez’s allowable attorney fees and costs are

limited to pre-petition services that benefitted the debtor’s

bankruptcy estate. 

For the reasons stated below, we AFFIRM.

I. FACTS

Shaver Lakewoods Development, Inc. (“Shaver” or “Debtor”)

was formed to develop a residential subdivision. Gordon Loo and

Angela Rodriguez each held a 50 percent ownership interest. 

Loo, Angela,2 and Robert Rodriguez, the husband of Angela,

served as members of the board of directors. Loo was the

president, Angela was involved in the daily operations, and

Robert brought extensive experience in development.

In early 2000, Shaver purchased land in Shaver Lake,

California, which was subdivided into twenty lots, fifteen of

** Hon. Brenda Martin, United States Bankruptcy Judge for

the District of Arizona, sitting in designation.

1 Unless otherwise indicated, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

“Rule” references are to the Federal Bankruptcy Procedure.

2 For ease of reference, we identify the members of the

Rodriguez family by their first names. No disrespect is

intended.

-2-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

which were fully developed, and five of which remained partially

developed (the “Real Property”). Sierra Pines at Shaver Lake

Homeowners Association (“Sierra Pines”) was created for

marketing, managing, and selling the lots.

On June 8, 2009, Sierra Pines and various individual

homeowners (the “plaintiffs”) brought a·construction defect

lawsuit against Shaver·and Robert for breach of implied

warranty, strict liability, and negligence in the Fresno County

Superior Court (the “State Court Action”).

On October 2, 2009, in satisfaction of preexisting debt,

Shaver deeded the Real Property to Angela and Loo (the

“Transferred Lots”).3 On August 19, 2010, the plaintiffs in the

State Court Action filed an amended complaint which, in relevant

part, added Loo and Angela as defendants and added causes of

action for actual fraudulent transfer, constructive fraudulent

transfer, and constructive trust. On August 27, 2010, the

plaintiffs recorded a lis pendens against the Transferred Lots.

Nunez Fee Agreement Meetings

As a result of the State Court Action, Shaver, Loo, Robert,

and Angela retained Nunez, a Fresno based attorney. The parties

and Nunez met on two occasions, in June 2010 and January 2011,

to discuss their retention of Nunez.

3 The bankruptcy court judge found that on November 7, 2002,

Loo loaned Shaver $250,000 and in return received a promissory

note and a security agreement, but not a deed of trust. 

Likewise, the bankruptcy judge found that on October 18, 2005, 

Angela loaned Shaver $282,000 and in return received a promissory

note and a security agreement, but not a deed of trust.

-3-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The June 2010 Meeting

In June 2010, Loo and Robert, without Angela, met with

Nunez (the “June 2010 Meeting”). They discussed the dispute,

the possibility of defenses, and the type of fee arrangement. 

Specifically, the record indicates that Nunez presented Loo and

Robert with a standard pre-printed retainer agreement. The

agreement had blank spaces that could be completed in a

handwritten fashion with information pertinent to identifying

and describing the clients, the dispute, estimated fees,

retainers, and dates and signatures of the parties. Nunez

filled in the first few lines on the blank portions of this

agreement, which included: the client names of Loo, Robert, and

Angela; the client addresses; a description of the Shaver case

name and number; authority for Nunez to act; and an indication

that the fees were unknown but a retainer of $2,500.00 was

required. The judge later found this meeting did not result in

an agreement for payment of fees.4 Nunez agreed to work on the

case on an interim basis, solely based on his long-standing

professional association with Robert Rodriguez, a former client.

The January 2011 Meeting

Six months later, on January 14, 2011, Angela, Loo, and

Robert met with Nunez (the “January 2011 Meeting”). The record

indicates that on that date Nunez on his own behalf and Loo,

Robert, and Angela, both individually and on behalf of Shaver,

4 The trial judge based this finding on (1) Angela was not

present, (2) the retainer agreement was not signed, and (3) the

parties did not agree on the details of the retention of Nunez,

as Nunez repeatedly resisted the demands by Loo and Robert to

proceed on a contingency fee basis.

-4-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

executed a signed retainer agreement. Although the first few

lines from the agreement as marked up at the June 2010 Meeting

remained, the parities added several additional terms. Most

significantly, the new terms included a purported lien in favor

of Nunez which was to be secured by the Transferred Lots. The

agreement, in relevant part, provided:

The parties agree that the fee shall not exceed 1/3 of

the value of lots owned by clients and attorney shall

have the option to accept 1/3 of value of lots

recovered. The lien shall apply to these lots.

...

Clients hereby grants [the Nunez Firm] a lien on

any/and all claims or causes of action that are the

subject of [] representation under this Agreement. 

The lien will attach to any recovery you may obtain

whether by Arbitration award, judgment, settlement, or

otherwise and on the real property lots release of lis

pendens and recovery of lots for clients.

...

The undersigned waive any conflict of interest which

may exist as a result of representation of all

parties.

Of the species of fee agreements recognized in California,

the trial judge later found that the agreement was a “hybrid,”

where there was an hourly component to the agreement that was

capped and the clients held an option to provide Nunez with

one-third of the value of the lots. Said another way, Nunez was

entitled to an hourly fee without regard to whether he was

successful in resolving the dispute with Sierra Pines, and the

hourly fees and one-third valuation were mere measuring devices

for how much Nunez would be paid.

On January 20, 2011, and on March 18, 2011, Nunez made two

attempts in the Fresno County Superior Court to expunge the lis

pendens. Each attempt was unsuccessful.

-5-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The Bankruptcy Proceedings 

On November 17, 2011, Shaver filed a petition under

Chapter 7 of the Bankruptcy Code (the “Petition Date”).5 In

addition to representing Shaver, Loo, Angela, and Robert in the

State Court Action, Nunez represented them in their respective

bankruptcy proceedings as well.

In Amended Schedule B, Debtor listed a contingent claim for

fraudulent transfer of the Transferred Lots valued at

$15,000.00. After negotiations by Trustee, on April 26, 2012,

the bankruptcy court approved a settlement agreement under

Section 9019(a) of the Bankruptcy Code between Trustee, Angela,

Loo, and Nunez (the “Compromise Agreement”). The Compromise

Agreement provided, in relevant part, that Loo and Angela would

reconvey the Transferred Lots to Debtor’s bankruptcy estate and

that Nunez could file a proof of claim for the purported lien

secured by the Transferred Lots. On April 20, 2012, Nunez filed

a proof of claim asserting a secured claim for unpaid fees and

costs in the amount of $88,501.81.

On October 26, 2012, Trustee negotiated with Sierra Pines

to release the lis pendens against the Transferred Lots which

Trustee had obtained. On November 26, 2012, the bankruptcy

court entered an order authorizing the sale of the Transferred

Lots free and clear of the liens of Nunez, Angela, and Loo.

Under the terms of the order, the liens were to attach to the

proceeds with the same validity, priority, and amount as they

5 Loo and Robert also filed for bankruptcy. In total, there

were five bankruptcy filings by parties related to the State

Court Action.

-6-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

attached to the Transferred Lots. The net proceeds from the

sale were $210,540.17.

On January 6, 2014, Trustee filed an adversary proceeding

seeking declaratory relief from the bankruptcy court that

Nunez’s lien was not secured against the Transferred Lots and

requesting the court to determine the amount of Nunez’s claim. 

On February 6, 2014, Nunez filed an answer and counterclaim for

quiet title based on his lien, specific performance, and

declaratory relief. 

The bankruptcy court held a three day trial. On August 26,

2015, the court issued its oral ruling. After stating detailed

findings of fact and conclusions of law, the bankruptcy court

concluded that Nunez did not have a secured claim against the

Transferred Lots because Nunez did not comply with Rule 3-300 of

the California Rules of Professional Conduct (“Rule 3-300”). 

The court found based on the words of the retainer agreement and

the testimony at trial that the fee agreement was a “hybrid” and

therefore, under relevant case law, Nunez’s lien was invalid and

unsecured. Adopting the Trustee’s methodology, the bankruptcy

court then determined that Nunez was allowed an unsecured claim

for fees and costs based on his pre-petition representation of

the Debtor in the amount of $8,535.38, which was to be paid by

the estate. Nunez timely appealed to this court. 

II. JURISDICTION

The bankruptcy court had jurisdiction over this proceeding

under 28 U.S.C. §§ 1334 and 157(b)(2). We have jurisdiction

under 28 U.S.C. § 158.

-7-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

III. ISSUES

A. Whether the bankruptcy court erred by concluding that

Nunez did not hold an enforceable lien on the Transferred Lots

under Rule 3-300 of the California Rules of Professional

Conduct.

B. Whether the bankruptcy court erred by concluding that

Nunez did not hold any equitable liens on the Transferred Lots. 

C. Whether the bankruptcy court abused its discretion in

calculating Nunez’s allowed attorney’s fees and costs in the

amount of $8,535.38.

IV. STANDARDS OF REVIEW

In reviewing decisions of the bankruptcy court, the Panel

reviews legal conclusions de novo, factual findings for clear

error, and mixed questions of law and fact de novo. Murray v.

Bammer (In re Bammer), 131 F.3d 788 (9th Cir. 1997);

In re Jorgensen, 66 B.R. 104, 109 (9th Cir. BAP 1986). A

finding of fact is clearly erroneous when, after reviewing the

evidence, we are left with the definite and firm conviction that

a mistake has been committed. In re Contractors Equip. Supply

Co., 861 F.2d 241, 243 (9th Cir. 1988).

We review a bankruptcy court’s decision to award attorney’s

fees and cost for abuse of discretion. See, e.g. Cal. Emp. Dev.

Dep’t v. Taxel (In re Del Mission Ltd.), 98 F.3d 1147 (9th Cir.

1996). Under the abuse of discretion standard of review, we

first “determine de novo whether the [bankruptcy] court

identified the correct legal rule to apply to the relief

requested.” United States v. Hinkson, 585 F.3d 1247, 1262 (9th

Cir. 2009) (en banc). If the bankruptcy court identified the

-8-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

correct legal rule, we then determine under the clearly

erroneous standard whether its factual findings and its

application of the facts to the relevant law were:

“(1) illogical, (2) implausible, or (3) without support in

inferences that may be drawn from the facts in the record.” Id.

(internal quotation marks omitted).

V. DISCUSSION

A. Motion to Strike

During the pendency of this appeal, Trustee filed a motion

to strike portions of Nunez’s opening brief and excerpts of

record. Nunez included in the excerpts declarations from

summary judgment motions, judicially noticed documents, and

findings of facts and conclusions of law, all that relate to

prior filings with the bankruptcy court, which were not

presented at trial or admitted in the trial record. Nunez

argues that the evidence only needed to be presented at some

point to the trial court to be considered part of the excerpts

of record. Thus, because they were on the court’s docket, they

were presented to the trial court.

In making this argument, Nunez essentially seeks to

introduce new evidence on appeal. The summary judgment motion

and other documents were not introduced into the evidentiary

record at trial. Accordingly, because the material Nunez

included in the excepts was not admitted into the trial record,

it would be improper for this Panel to consider the material

outside the record. See Heath v. Helmick, 173 F.2d 156 (9th

Cir. 1949). Therefore, the challenged exhibits are stricken. 

We likewise accept Trustee’s redacted brief, which eliminated

-9-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

any reference to the material not in the trial record in Nunez’s

opening brief filed with the Panel. 

B. Secured claims against the estate

Nunez argues that his retainer agreement created a secured

claim against the Shaver bankruptcy estate. The bankruptcy

court denied that security for reasons stated above. We address

those reasons in turn. 

1. Attorney’s Lien

Nunez argues that he has a secured attorney’s charging lien

based on the January 2011 retainer agreement which need not

comply with the ethical obligations in Rule 3-300. The record

indicates that in making its determination, the bankruptcy court

found that there are four species of retainer agreements:

hourly, fixed, contingent, and true retainer. After eliminating

each type of agreement, the court characterized the January 2011

retainer agreement as a “hybrid.”6 On appeal, Nunez does not

dispute this characterization, leaving only the issue of whether

Nunez’s fee agreement required compliance with Rule 3-300 before

the Panel.

State law governs the nature, extent, and validity of a

lien in a bankruptcy proceeding. Diamant v. Kasparian (In re S.

Cal. Plastics, Inc.), 165 F.3d 1243, 1248 (9th Cir. 1999). The

parties do not dispute that California law governs the retainer

agreement because undisputably it was entered into in

California. 

6 The bankruptcy court based its determination on there

being an hourly component with an option to pay Nunez one-third

of the value of the Transferred Lots.

-10-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Under California law, there are two types of attorneys’

liens: specific charging liens and general possessory liens. 

Evans v. Stockton & Hing (In re Sw. Restaurant Sys., Inc.),

607 F.2d 1243, 1246 (9th Cir. 1979). “A charging lien attaches

to the particular fund or other property created or secured

through the attorney's efforts,” whereas, a possessory lien

“enables the attorney to retain a client’s records or other

property until the client pays for all of the legal fees owing

to the attorney.”7 Id. A charging lien may be used to secure

either hourly fee or a contingency fee. Cetenko v. United Cal.

Bank, 30 Cal.3d 528 (1982). 

In most jurisdictions, a charging lien may be created

either by contract or by operation of law. Fletcher v. Davis,

33 Cal.4th 61, 62 (2010). Unlike most other jurisdictions,

under California law an attorney’s charging lien to secure

payment for legal services can only be created by contract of

the parties. Carroll v. Interstate Brands Corp., 99 Cal. App.

4th 1168, 1172 (2002). 

For most charging liens, California attorneys must satisfy

the ethical obligations found in Rule 3-300 or the lien will be

invalid. See Fletcher, 33 Cal.4th 61. Rule 3-300, an ethics

rule entitled “Avoiding Interests Adverse to a Client,”

provides: 

A member shall not enter into a business transaction with a

client; or knowingly acquire an ownership, possessory,

security, or other pecuniary interest adverse to a client,

unless each of the following requirements has been

7 Nunez does not argue and the facts do not suggest that the

lien he had was a possessory lien.

-11-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

satisfied:

(A) The transaction or acquisition and its terms are fair

and reasonable to the client and are fully disclosed and

transmitted in writing to the client in a manner which

should reasonably have been understood by the client; and 

(B) The client is advised in writing that the client may

seek the advice of an independent lawyer of the client's

choice and is given a reasonable opportunity to seek that

advice; and 

(C) The client thereafter consents in writing to the terms

of the transaction or the terms of the acquisition. 

Cal. R. Prof. Conduct 3-300.

It is well-established that an attorney who secures payment

of fees by taking a lien on the property of a client creates an

“adverse interest” and must comply with the ethical obligations

in Rule 3-300. See Hawk v. State Bar, 45 Cal.3d 589 (1988)

(holding that an attorney who had secured payment of fees with a

note secured by a deed of trust on a client’s property had to

comply with then-current Rule 5-101 (now Rule 3-300); see also

Brokway v. State Bar, 53 Cal.3d 51 (1991); Fletcher, 33 Cal.4th

at 64; Comments to Rule 3-300. In this case, Nunez billed at an

hourly rate and took a security interest in the Transferred

Lots, which prior to the filing of bankruptcy, belonged to one

of his clients, either Shaver or Loo and Angela. Nunez’s

attorney’s fees were therefore to be secured by property of his

clients, an acquisition that creates an adverse interest under

California law. Id. 

Nunez argues that Plummer v. Day/Eisenberg, 184 Cal.App.

4th 38, 41 (2010) applies to his hybrid fee agreement and

therefore he need not comply with Rule 3-300. We disagree. In

Plummer, the retainer agreement was a pure contingency fee

-12-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

agreement, which provided the attorney with a lien on the

client’s prospective recovery in the same proceeding. Id. at

38. The court, adopting the reasoning of the California State

Bar, concluded that a pure contingency fee agreement does not

create an adverse interest to the client within the meaning of

Rule 3–300. Id.; Cal. Eth. Op. 2006–170 at *6. Plummer is

easily distinguishable because Nunez’s fee agreement was not

contingent upon the outcome of resolving the State Court Action,

which he plainly concedes.8 Moreover, his fees were not

contingent at all, instead billed at an hourly rate whether or

not he won for his clients. Therefore, Plummer cannot apply on

these facts to exempt Nunez’s compliance with the ethical

obligations in Rule 3-300. 

Although we need not make such determination to reach a

decision in this case, we doubt that Nunez held a “charging

lien” at all. A charging lien attaches to a particular

“recovery” or “fund.” Fletcher, 33 Cal.4th at 61; In re Sw.

Restaurant Sys., Inc., 607 F.2d at 1246; Cetenko v. United Cal.

Bank, 30 Cal.3d at 528. Nunez’s lien secured hourly fees but

the fees were not contingent on obtaining a judgment. 

Therefore, his lien could not attach to any conceivable

“recovery” or “fund” and was unperfected, as it was never

recorded. In any case, because the lien was not a pure

continency charging lien, compliance with Rule 3-300 was

8 Even if Plummer applied to this retainer agreement, Nunez

still did not “recover” the Transferred Lots. Nunez was

unsuccessful in his attempts to expunge the lis pendens. It was

Trustee who avoided the lis pendens and recovered the Transferred

Lots in the Compromise Agreement.

-13-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

required. See Plummer, 184 Cal.App. 4th at 38. The bankruptcy

court did not err in determining that Rule 3-300 compliance was

mandatory. 

2. Compliance with Rule 3-300

After three days of trial, the bankruptcy court made

factual findings that Nunez did not comply with Rule 3-300. We

can only disturb these findings if they were clearly erroneous. 

See Joseph F. Sanson Inv. Co. V. 268 Limited (In re 268

Limited), 789 F.2d 674 (9th Cir. 1986).

Under the first requirement of Rule 3-300, in which the

terms must be “fair and “reasonable” and “fully disclosed” to

the client, the bankruptcy court found that the terms were not

fair or reasonable. The court noted three problems. First, the

costs of litigation and sale of the recovered lots are not

described in the fee agreement. Second, Nunez did not discuss

how his lien might impact settlement discussions if a

disagreement resulted between Nunez on the one hand and Loo,

Robert, Angela, or Shaver on the other. Last, and most

significant, was the actual conflict of interest in representing

both the transferor and transferee in the defense of a

fraudulent transfer action. Clients Loo and Angela agreed to

place liens on the Transferred Lots that were titled in their

names in exchange for Nunez’s representation of themselves and

Shaver, the entity which made the transfer. Shaver did not have

the same interest in the State Court Action as Loo and Angela. 

Under the second requirement, which requires there must be

both a written notification of the right to seek advice by

outside counsel and a reasonable opportunity to obtain such

-14-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

advice, the bankruptcy court found that neither was present. 

The court first found that the agreement was not reviewed by an

independent lawyer who was not affiliated with Nunez. The court

commented that the rule makes no exception for sophisticated

clients, as Nunez argued. The bankruptcy court then found that

because the agreement that was ultimately signed in January 2011

was materially different than the June 2010 agreement, a·new

period of review was required, which was not given. Because the

clients signed the agreement on that very day, there was no

reasonable opportunity for independent review. 

Under the last requirement, which requires consent by the

client, the bankruptcy court found that although consent was

given for the January 2011 Agreement, because a reasonable

opportunity for advice must precede consent, which was not

present, Nunez did not comply with the ethical rule. 

We have reviewed the retainer agreement and the bankruptcy

court’s findings. The bankruptcy court did not commit clear

error in making the determination that the Rule 3-300 warnings

were not provided by Nunez to all the signers of the January

2011 retainer agreement. Among other things, the actual

conflict of interest in representing both the transferor and the

transferee is blatant. The terms could have never been fair and

reasonable to all of Nunez’s clients and on this basis alone

Nunez did not comply with the Rule 3-300 warnings. Therefore,

the bankruptcy court properly determined that Nunez’s lien was

-15-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

invalid under Rule 3-300.9 Fletcher, 33 Cal.4th at 66. 

3. Equitable Lien 

Nunez also argues that the bankruptcy court erred in not

imposing an equitable lien on the Transferred Lots to protect

his claim for attorney’s fees. 

We disagree. This equitable remedy must be considered

under California law. See Wilkins v. Oken, 321 P.2d 876, 879

(Cal. Ct. App. 1958). The imposition of an equitable lien is an

extraordinary remedy to establish justice in a given situation. 

See Farmers Ins. Exchange v. Smith, 71 Cal. App. 4th App. 660,

667 (1999); see also City. of Los Angeles v. Constr. Laborers

Trust Funds for S. Cal., 137 Cal. App. 410, 415 (2006);

53 C.J.S. Liens, § 5, pp. 462–463, fns. omitted. An equitable

lien is topically based on the doctrines of estoppel, unjust

enrichment, or the equitable maxim that equity will deem as done

that which ought to be done. See Farmers Ins. Exchange v.

Zerin, 53 Cal. App. 4th 445, 453 (1997); Constr. Laborers Trust

Funds For S. Cal., 137 Cal. App. at 416.

Although we question whether an equitable lien is available

as a remedy to an attorney whose retainer agreement did not

create a valid charging lien, see Wilkins v. Oken, 157 Cal. App.

2d, 603 (1958), we acknowledge that there is no California case

that establishes such a bright line rule. However, we need not

establish such a rule in this case. Consistent with the policy

9 Although the lien is invalid for non-compliance with

Rule 3-300, it does not follow that the underlying contractual

provisions of the retainer agreement are also invalid. See

Shopoff & Cavallo v. Lyon LLP, 167 Cal. App. 4th 1489, 1523

(2000).

-16-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

of Rule 3-300, we find that under these facts Nunez is not

entitled to an equitable lien. The basis of Nunez’s

representation and its adverse impact on his clients required

him to comply with the ethical provisions of Rule 3-300, which

he did not do. Nunez’s non-compliance with Rule 3-300 rendered

him unsecured. Nunez cannot now argue under an equitable theory

that he is entitled to different treatment. Because the

imposition of an equitable lien is based upon providing justice

in a given situation, imposing an equitable lien in favor of an

attorney who has failed to comply with the Code of Professional

Conduct would be improper. See Farmers Ins. Exchange v. Smith,

71 Cal. App. 4th App. at 667. 

We affirm the bankruptcy court’s decision that Nunez has no

right to an equitable lien. 

4. Attorney’s Fee Award 

After properly determining that Nunez’s claim was

unsecured, the bankruptcy court adjudicated the amount of

Nunez’s unsecured claim for attorney’s fees. In doing so, the

record indicates that the court adopted the Trustee’s

methodology in calculating the fees. The bankruptcy court did

not abuse its discretion in determining the reasonableness of

Nunez’s fees. 

Section 502(b)(4) provides that a prepetition claim for

services performed by an attorney or insider of the debtor shall

be disallowed to the extent the claim exceeds the reasonable

value of the services provided. Thus, “the excess amount of the

claim beyond such reasonable value fixed by the court is simply

disallowed and may not, therefore, share in the distribution of

-17-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the debtor's assets.” 4 Collier on Bankruptcy ¶ 502.03[5][c]

(Alan N. Resnick & Henry J. Sommer eds., 16th ed. 2009). The

reasonableness of attorney's fees under section 502(b)(4) is a

question of federal law. Schoenmann v. Bach Constr., Inc.

(In re Segovia), 387 B.R. 773, 779 (Bankr. N.D. Cal. 2008),

aff'd, 2008 WL 8462967, at *6 (9th Cir. BAP Oct.22, 2008);

In re W. Real Estate Fund, 922 F.2d at 597. As such, Nunez’s

claim for attorney's fees and costs may be allowed only to the

extent it is reasonable as determined under federal law. 

Landsing Diversified Props.-II v. First Nat’l Bank & Trust Co.

of Tulsa (In re W. Real Estate Fund, Inc.), 922 F.2d 592, 597

(10th Cir. 1991). The bankruptcy court correctly applied this

law.

Nunez’s total claim for attorney fees and costs was in the

amount of $88,501.81. The bankruptcy court first properly

disallowed all fees after the Petition Date in the amount of

$30,824.27. The record indicates that Nunez was not employed by

the estate. Because an attorney can only be paid by the estate

for post-petition services if employed by the trustee with court

approval, §§ 327-330; Lamie v. United States Tr., 540 U.S. 526

(2004), the bankruptcy court properly determined that Nunez was

not entitled to post-petition fees. 

The bankruptcy court then deducted $15,000 for the work

previously done for Robert because there was no benefit to the

Debtor. It was not clear error for the bankruptcy court to

deduct fees that were unrelated to the representation of the

debtor. Finally, since Debtor was one of five represented

clients, with all of the clients’ fees and expenses included in

-18-
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the claim, the court assigned 20 percent (1/5) of the remaining

balance of the claim to the Debtor, leaving $8,535.38 as a

general unsecured claim. We conclude this factual finding was

not clearly erroneous. 

VI. CONCLUSION

For the reasons stated above, we AFFIRM.

-19-