Court Opinion

ID: 815665
Source: CourtListenerOpinion
Date Created: 2013-01-18 20:57:34+00
Date Added: 2024-06-11T13:09:25.595691
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              JAN 18 2013

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

In Re:,                                          No. 11-57789

MODTECH HOLDINGS, INC.,                          D.C. No. 5:10-cv-00466-PSG

              Debtor,
                                                 MEMORANDUM *
__________________,

MODTECH STRUCTURES, LLC,

              Appellant,

  v.

MONTELEONE & MCCRORY LLP,

              Appellee.,

  and

MODTECH HOLDINGS, INC.,

               Interested Party.

                    Appeal from the United States District Court
                        for the Central District of California
                    Philip S. Gutierrez, District Judge, Presiding

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                            Submitted January 8, 2013 **
                               Pasadena, California

Before: CANBY, REINHARDT, and WARDLAW, Circuit Judges.

      Modtech Structures, LLC (MSL) appeals the district court’s order affirming

the bankruptcy court’s decision granting Monteleone & McCrory, LLP’s (M&M)

Motion for Summary Judgment and denying MSL’s Cross-Motion for Summary

Judgment. MSL argues that the bankruptcy court erred in concluding that the

amount Modtech Holdings, Inc. (Modtech) owed M&M in attorneys’ fees was

secured by a valid and enforceable attorney’s lien. We have jurisdiction pursuant

to 28 U.S.C. §§ 158(d) and 1291, and we affirm.

      The bankruptcy court did not err when it determined that M&M provided

Modtech with sufficient disclosures under California Rule of Professional Conduct

3-300. Because the terms of the lien were fair, reasonable, and fully disclosed in

writing to Modtech in a manner which Modtech reasonably should have

understood; because M&M advised Modtech in writing that it could seek the

advice of independent counsel regarding the terms of the lien and that it would give

Modtech time to do so; and because Modtech consented in writing to the terms of

        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

                                          2
the lien, the bankruptcy court correctly concluded that M&M provided Modtech

with sufficient disclosures under California Rule of Professional Conduct 3-300.

See Cal. Rule of Prof. Conduct 3-300; see also Fletcher v. Davis, 90 P.3d 1216,

1222 (Cal. 2004) (“Rule 3-300 does not bar attorneys from obtaining liens on

future recoveries. The rule merely requires the attorney who wishes to obtain such

a lien to explain the transaction fully, to offer fair and reasonable terms, to provide

a copy of the agreement, to give the client an opportunity to seek independent legal

advice, and to secure the client’s written consent.”). Beery v. State Bar of

California, 739 P.2d 1289 (Cal. 1987), does not impose any additional disclosure

requirements, as that case pertains only to an attorney's ethical obligations when

entering into independent business transactions with his client.

      Nor was the bankruptcy court incorrect in its ruling that M&M was not

required to file a UCC financing statement with the California Secretary of State in

order to perfect its lien with respect to fees incurred for legal services unrelated to

achieving the recoveries in question. California law does not require recording of

attorney’s liens to render them enforceable, regardless of whether the fees incurred

were for legal services related to the recoveries in question. Cetenko v. United Cal.

Bank, 30 Cal. 3d 528, 531, 532-33, 536 (Cal. 1982) (holding that an attorney could

                                            3
enforce a lien against his client's recovery in one particular matter for “services

rendered in [that matter] and several other matters” (emphasis added)).

      Therefore, the district court’s order affirming the bankruptcy court’s

decision is AFFIRMED.

                                           4