California Court of Appeal
46 Cal.Rptr.3d 573 (2006)
Kenneth Petrulis was appointed administrator of the estate of Dan Stevenson. The law firm Goodson & Wachtel (Goodson) represented the estate. The estate had no assets, and creditors filed claims against the estate totaling more than $12 million. Goodson negotiated the claims down to $1.7 million in court-approved settlements, and obtained $700,000 in payments from creditors based on claims that they had acted fraudulently. Petrulis (plaintiff) asked the court to approve a fee agreement for Goodson without notice to the creditors. Under the agreement, Goodson was to be paid twice its hourly rate. The trial court held a hearing without providing notice to the creditors, approved the agreement, and ordered the agreement sealed until litigation was completed. After the creditor claims were settled, Petrulis petitioned for payment of attorney fees according to the approved fee agreement. Petrulis requested $1.25 in fees for Goodson. One of the estate’s creditors, William Wilks (defendant), objected, arguing that Goodson induced him to settle without his being aware of the fee agreement. The trial court reduced the attorney fees to $200,000, and Petrulis appealed.
Rule of Law
Holding and Reasoning (Mallano, J.)
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