Anderson v. Eaton

WASTE, C. J.

The complaint in this action for attorney’s fees contains two counts. The first count sets forth a written contract providing for the payment of a one-third contingent fee and the second, a common count, asks for the reasonable value of services performed. No evidence was introduced in support of the latter count, and we therefore dismiss it from consideration. In conformity with the allegations of defendant’s affirmative defense, the trial court found that the contract set out in count one had been procured by fraud, and that it was against public policy and void. Judgment was thereupon entered for the defendant. Plaintiff prosecutes this appeal, contending that the judgment is contrary to law, and that the evidence does not support the finding of fraud.

On February 1, 1926, Oris Eaton, an unmarried adult son of the defendant, met his death while acting within the scope and course of his employment with the San Diego Consolidated Gas & Electric Company. The injuries causing his death resulted from the negligence of the employees of the Benson Lumber Company. As an outgrowth of the untimely death of her son, the defendant became invested with two causes of action—one against the employer Gas Company under the provisions of the Workmen’s Compensation Act and the other against the Lumber Company based on negligence. Section 26 of the Workmen’s Compensation Act gave to the employer Gas Company

[115]

a cause of action against the Lumber Company for any loss sustained by it, or a first lien on any judgment recovered by the employee against the Lumber Company. The plaintiff was the attorney for the insurance carrier of the employer Gas Company on a regular retainer. He also carried on a general practice. As the attorney for this insurance carrier, he investigated the accident and so met the defendant. In the course of his conversations with the defendant, the plaintiff stated that his company admitted its liability under the provisions of the Workmen’s Compensation Act and that it would not contest her claim before the Industrial Accident Commission. Defendant testified that plaintiff suggested that she retain him as her attorney to press her claim against the Lumber Company because of his familiarity with the circumstances surrounding the accident, and that five days after the accident she signed the contract here sued on, employing plaintiff on a one-third contingent fee basis. There is evidence to the effect that plaintiff advised the defendant not to employ an attorney to represent her at the hearings before the Industrial Accident Commission in her claim against the employer Gas Company, and not to divulge that he was representing her in her claim against the Lumber Company. At the several hearings before the Industrial Accident Commission, the plaintiff appeared on behalf of the Gas Company and its compensation insurance carrier, and, while admitting liability, apparently contested or questioned defendant’s claim as. to the degree of dependency. As a result of these hearings, the defendant received an award of $309, although plaintiff, prior to his employment by defendant, had approximated the claim against the employer to be worth $1500. During all of this period plaintiff had been negotiating Avith the insurance carrier of the Lumber Company for a settlement of defendant’s claim for damages, although prior to his employment by defendant he had intimated to her that he would bring suit against the Lumber Company, asking damages in the sum of $40,000 or $50,000. Defendant became dissatisfied with the manner in which her claim against the Lumber Company was being handled, and addressed a letter to the plaintiff discharging him and offering to pay the reasonable value of his services. Defendant thereafter personally negotiated with the