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Armendarez v. Pacific Specialty Insurance Co.3/26/2003
Sheri Armendarez sued her automobile insurer, the Pacific Specialty Insurance Company (PSIC), for breach of contract and bad faith, based on the company's refusal to defend or indemnify her in litigation spawned by her involvement in a DUI accident. As part of her attack on the jury's finding that she did not suffer any economic damages, Armendarez challenges the admission of her attorney's fee agreement and the denial of her motion for a new trial. For the reasons set forth below, we affirm.
I.
Armendarez, then driving under the influence of a controlled substance, was involved in an automobile accident on September 27, 1998. On December 17, she pleaded guilty to various criminal charges and was sentenced to a 32-month term.
Armendarez's automobile insurance policy was issued by PSIC. She reported the accident to PSIC in October 1998 and the insurer eventually settled her property damage claim. Sometime around March 30, 1999, PSIC learned, for the first time, that third parties were injured in the accident. On May 7, an attorney for one of the injured parties notified PSIC that Armendarez was currently incarcerated. PSIC had been mailing correspondence to her home with no response.
April Lynch filed a personal injury action against Armendarez in May 1999, and her attorney went on to obtain a default judgment in the sum of $16,972.01. In July, PSIC concluded Armendarez was not assisting in her defense, and denied coverage on that basis.
By May 2000, two additional plaintiffs (Garcia and Ramirez) had surfaced and obtained combined default judgments against Armendarez in excess of $22,000. Armendarez, in turn, sued PSIC for breach of contract and bad faith. Approximately six months later, PSIC settled with all three defendants, and amended its answer to assert the affirmative defense that it has satisfied the default judgments.
PSIC eventually moved for summary judgment, claiming Armendarez had not suffered any economic damages. To defeat the motion and raise a triable issue of material fact, Armendarez's opposition included a declaration from her attorney, Stuart E. Bruers, stating his client had incurred attorney fees in the sum of $17,615.50, "representing a very conservative estimate of 73.5 hours at average hourly rate . . . of $225.00." Bruers attached an itemized list of his charges as an exhibit to his declaration. Based on this evidence, the court denied the motion.
PSIC eventually stipulated to liability and the matter went to trial on the issues of causation and damages. At trial, Bruers shifted gears, testifying Armendarez had never received a monthly bill from his office and he originally agreed to represent her on a contingency basis. He claimed they later revised the agreement to reflect payment on a hourly basis. According to Bruers , the "daily bills" reflecting his work on the Armendarez file had long since been destroyed, but he insisted his client still "owed him the money." Armendarez testified she had retained Bruers on a contingency basis but thought he should be paid for his time.
The jury found PSIC's conduct had damaged Armendarez, but concluded she had not suffered any economic damages. This appeal followed.
II.
Armendarez contends the trial court erred in admitting the contingency fee agreement, claiming the document was protected by the attorney-client privilege. Alternatively, she claims the contingency fee agreement was not relevant to the sum of the fees actually incurred and the prejudicial impact of this evidence outweighed any probative value. Neither contention has merit and we affirm.
Our analysis begins with this well s
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