CONDON v. McHENRY

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Court of Appeal, First District, Division 3, California.

ESTATE OF Evelyn J. CONDON, Deceased. Michael R. CONDON et al., Petitioners and Appellants, v. Caroline M. McHENRY, Objector and Respondent.

No. A074636.

Decided: June 25, 1997

Dominic J. Campisi, James F. Feutz, Andrew Zabronski, Evans, Latham, Harris and Campisi, San Francisco, for Petitioners. Paul J. Barulich, Law Offices of Paul J. Barulich, Redwood City, for Objector and Respondent.

Michael Condon and his attorneys, Michael Katz and his firm (the “Elrod firm”), appeal an order of the probate court denying Katz attorney fees for services rendered to the estate of Evelyn Condon.   Michael, Evelyn's son, was appointed co-executor of her will with his sister, Caroline McHenry, the respondent to this appeal.   Michael lives in Colorado.   Caroline lives in California, as did their mother.   The Elrod firm, which Evelyn Condon had retained to prepare her will and other documents effectuating her estate plan, is in Colorado, where Katz is licensed to practice law.   Katz is not a member of the California State Bar.

Michael retained Katz and the Elrod firm to advise him as co-executor in the probate proceedings.   Caroline retained counsel in California, James Cody and his firm (the “Carr firm”), to represent her as co-executor in the same proceedings.   The record reflects that Katz did most of his work in Colorado, communicating by telephone, mail, and fax with Cody and with other of the Condon siblings in California.1  Michael also retained California counsel, Dominic Campisi and his firm (the “Evans firm”), to file papers and make appearances on his behalf in the probate court in San Mateo County.

In January 1996, fully three acrimonious years after the will was admitted to probate, the parties scheduled a hearing to approve the account, distribute the estate's assets, and award the fees owed the executors and their attorneys.   Michael, through Campisi, filed a petition seeking compensation from the estate for Katz's ordinary and extraordinary legal services (see Prob.Code, §§ 10810, 10811).   Caroline challenged the petition, asserting that some of the work for which Katz sought payment was done for Michael and their brother, Eugene, individually, not for the estate.   She also contended that the sums Katz claimed were unreasonable.

The probate judge never reached the issues Caroline raised.   Once he determined that Katz was not a member of the California State Bar and had not applied to appear pro hac vice (see Cal. Rules of Court, rule 983), he expressed his view that Katz was not an “attorney” within the meaning of Probate Code section 10810:  “[A]s far as this court is concerned he's not a licensed legal practitioner․”   He adjourned the hearing, telling Campisi, “I will give you [two hours] to come up with some authority [for me] to order payment out of a California estate to a nonmember of the California bar for attorney's fees[.]”

When the hearing resumed, the judge denied Katz's hastily-assembled application for leave to appear pro hac vice.   After hearing argument, he concluded that, by serving as counsel for the co-executor of a will written by a California decedent, devising California property, and subject to California probate proceedings, Katz, a nonmember of the State Bar, had “practice[d] law in California” in violation of Business and Professions Code section 6125.   The court therefore refused to authorize payment of his legal fees.   Michael and the Elrod firm timely appealed.   Because their appeal raises only questions of law, we review the court's ruling de novo.

THE LEGAL QUESTION

 The Business and Professions Code provides that “[n]o person shall practice law in California unless the person is an active member of the State Bar.” (Bus. & Prof.Code, § 6125.)   It provides further that “[any] person advertising or holding himself or herself out as practicing or entitled to practice law or otherwise practicing law who is not an active member of the State Bar, is guilty of a misdemeanor.”  (Bus. & Prof.Code, § 6126.)   Our courts have spun from these prohibitions a policy against awarding attorney fees to unlicensed practitioners of law.2  (See Agran v. Shapiro (1954) 273 P.2d 619, 127 Cal.App.2d Supp. 807, 826.)

 It is well settled in California that “practicing law” means more than just appearing in court.  “ ‘․ [T]he practice of the law ․ includes legal advice and counsel and the preparation of legal instruments and contracts by which legal rights are secured although such matter may or may not be [ ]pending in a court.’ ” (People ex rel Lawyers' Institute v. Merchants' Protective Corp. (1922) 189 Cal. 531, 535, 209 P. 363.)   The parties agree that Katz “practic[ed] law” for Michael in his capacity as co-executor of his mother's will.3

 They debate whether he did so “in California,” in violation of section 6125 of the Business and Professions Code. The appellants contend that “in California” means “while physically present within the state.”   The respondent, like the trial judge, gives “in California” a metaphysical meaning beyond the obvious one appellants advance.   We infer her argument from her assertion that Katz violated section 6125 when, without entering California, he researched issues of California law;  discussed them with his client in Colorado;  drafted documents settling disputes between the beneficiaries of the estate;  most of whom reside in California, and conferred about legal matters over the telephone with people in California.   We thus consider whether section 6125 proscribes any of the following:  the practice of California law outside of California, except by members of the California State Bar;  the transmission from outside of California of any communication made in the practice of law to anyone who is in California, except by members of the California State Bar. The language of the Probate and Business and Professions Codes, the cases applying both statutes, and the policies that justify and principles that limit the permissible regulation of attorneys all lead us to reject any metaphysical interpretation of “in California.”   We adopt appellants' as the only tenable reading of section 6125, and hold that “in California” means “while physically present within the state.”

ANALYSIS

1. The Probate Code

 The Probate Code makes specific allowance for a nonresident, such as Michael, to serve as executor of a will subject to probate in California (Prob.Code, § 8570 et seq.), and our courts have made clear that “[t]he executor[ ] has the right to choose independent counsel to perform the necessary legal services on behalf of the estate.”  (Estate of Effron (1981) 117 Cal.App.3d 915, 930, 173 Cal.Rptr. 93 [executor's choice retained over unanimous objection of beneficiaries].)  Here, Michael's choice was not only his to make, it was also reasonable;  the Elrod firm did business where he lived and its principals had originally prepared his mother's will, as well as two trust agreements and a buy-sell agreement to transfer ownership of a family business upon her death to Michael and his brothers.  (See ibid. [“[p]resumably, the lawyer with familiarity of the decedent's property is a reasonable choice”];  In re Estate of Waring (1966) 47 N.J. 367, 377 [221 A.2d 193, 198] [approving retention of a New York attorney familiar with a New Jersey estate].)

 Lending further support to our conclusion, the language of the Probate Code is mandatory, “the attorney for the [executor] shall receive compensation” (Prob.Code, § 10810, italics added), making no exception for out-of-state attorneys, and our Supreme Court has held that the attorney's right to ordinary compensation is absolute (Estate of Johnston (1956) 47 Cal.2d 265, 272, 303 P.2d 1).   Moreover, our courts have approved without question the payment of statutory fees to an out-of-state attorney retained by a California executor.  (See Estate of Barreiro (1932) 125 Cal.App. 752, 14 P.2d 786 [fees paid to a Mexican attorney who advised a California executor regarding Mexican matters].)  And it is common practice for California probate judges to award fees to out-of-state attorneys rendering legal service in “ancillary” matters.   In sum, though out-of-state attorneys have surely served California estates before this, and their service has surely entailed professional communications with people in California, there is nothing in the Probate Code or prior cases to suggest that they are disqualified from receiving statutory compensation.

2. The Business and Professions Code

 The Business and Professions Code regulates “practic[ing] law in California.”  (Bus. & Prof.Code, § 6125.)   What litigation this language has occasioned has generated legion opinions on the meaning of “practic[ing] law,” but none on the meaning of “in California.”   We surmise that this is because the latter phrase is clear, not because a situation like this has never before arisen.  “In” California is widely understood to mean “while physically present” here.   We have no authority to interpret plain statutory language to mean more than it appears to mean.  (Solberg v. Superior Court (1977) 19 Cal.3d 182, 198, 137 Cal.Rptr. 460, 561 P.2d 1148[“[w]hen statutory language is ․ clear and unambiguous there is no need for construction, and courts should not indulge in it”].)  This canon of statutory construction impels us to conclude that practicing law “in California” entails being physically present within the state's borders.

 Moreover, we find no precedent for applying our no-compensation policy to an attorney who practices California law in another jurisdiction.   What precedent there is suggests that, as far as the Business and Professions Code is concerned, “California” is a state, not a state of mind.   In Bluestein v. State Bar (1974) 13 Cal.3d 162, 118 Cal.Rptr. 175, 529 P.2d 599, our Supreme Court upheld the suspension of a California attorney for aiding and abetting an unlicensed person to practice law in California.   Bluestein believed the representation of one William Lynas that he was admitted to the bar in New York and had practiced law in Europe.   Although Bluestein knew that Lynas was not admitted to the California bar, he shared an office with him in California, held him out as his associate, and introduced him to clients seeking advice concerning the law of Spain.   The Supreme Court held that Bluestein thus aided Lynas to practice law illegally in California.   In so holding, the court adopted the view of New York's highest court that “ ‘[w]hether a person gives advice as to [local] law, ․ the law of a sister State, or the law of a foreign country, he is giving legal advice.[ 4 ]  ․ To hold otherwise would be to state that a member of the [State] Bar only practices law when he deals with local law, a manifestly anomalous statement.’  (In re Roel [1957] 3 N.Y.2d 224 [165 N.Y.S.2d 31, 35, 144 N.E.2d 24, 26].)”  (13 Cal.3d at pp. 173-174, 118 Cal.Rptr. 175, 529 P.2d 599.)   Respondent urges us to embrace the obverse anomaly:  that a person practices law “in California” any time he practices California law, anywhere, or “virtually” enters the state by telephone, fax, e-mail, or satellite to ply any kind of law.

3. Other Considerations

 Other considerations reinforce our conclusion that section 6125 does not regulate the activities of lawyers outside our borders.   We do not question that California has reason and authority to oversee the practice of law in the state.  “[W]here legal services are rendered in connection with litigation ․, a state has an interest in providing for the orderly conduct of business in its courts.”  (Note, Unauthorized Practice Statutes and the Rights of Out-of-State Attorneys (1967) 40 So.Cal.L.Rev. 569, 570 [Note].) The state has a second interest in “ensur[ing] competency in the performance of certain services and ․ protect[ing] its members from exploitation․  [Both are] within the state's police power” to serve.   (Howard v. Superior Court (1975) 52 Cal.App.3d 722, 726, 125 Cal.Rptr. 255.)5

We doubt, however, that the Legislature is authorized to prevent an unlicensed person in New York or Zurich from plying California law or transmitting legal communications to anyone within the state, so long as the unlicensed person remains outside the state.6  And we suspect that such a policy, if it could be enforced, would prove as frustrating and expensive for consumers of legal services as for purveyors.   A client outside the state, faced with a California legal problem, would be forced to choose counsel, not from the best qualified, most familiar, least expensive, or most accessible attorneys, but from those who belong to the California State Bar. Counsel licensed out-of-state could not contact their clients in California, even to discuss out-of-state law.   In an era when business and personal relationships commonly cross geopolitical boundaries, we see no sense in making it more aggravating and more expensive to conduct legal discussions and resolve legal disputes across those same boundaries without good reason.7

In any event, we are convinced that the rules governing the conduct of attorneys within our borders discourage the unlicensed practice of California law elsewhere.   Anyone hoping to tap the California legal market without joining the California bar will be prevented from setting up shop within the state (Bus. & Prof.Code, § 6125), holding him- or herself out as a lawyer in California (Bus. & Prof.Code, § 6126), or making repeat “guest” appearances in our courts (Cal. Rules of Court, rule 983).   His or her clients will be those few who, faced with a California legal problem, will hire an attorney who may not have passed the state bar examination, cannot go to court in California, and has to render services from across the state line.   All in all, the plain prohibitions expressed in our laws and rules of court seem enough to keep order in our courts and to protect Californians from untrained practitioners.

 In light of the foregoing, we conclude that Katz did not violate our Business and Professions Code.8 He is, therefore, entitled under the Probate Code to ordinary statutory fees and to extraordinary fees in whatever amount the court deems reasonable for any services he rendered to Michael in his capacity as co-executor.  (See Hatch v. Bush (1963) 215 Cal.App.2d 692, 30 Cal.Rptr. 397.)   Appellants are to recover the costs and reasonable attorney fees incurred in prosecuting this appeal.  (Estate of Trynin (1989) 49 Cal.3d 868, 880, 264 Cal.Rptr. 93, 782 P.2d 232.)

REVERSED AND REMANDED.

FOOTNOTES

1.   Michael has four sisters and two brothers, all beneficiaries of the will, with whom Katz dealt either directly or through counsel in resolving disputes over the administration of the estate.

2.   Nonmembers of the California State Bar may recover fees for services that nonattorneys may legally perform.  (Schroeder v. Wheeler (1932) 126 Cal.App. 367, 378, 14 P.2d 903.)   Under this rule, the probate court awarded the Elrod firm compensation for the time Katz spent doing tax work for the estate.

3.   By appellants' uncontradicted account, Katz “represented his clientnegotiating transactions, drafting agreements, researching law and giving legal advice[ ]from his office in Colorado[, while r]outine probate administration filings were handled by [Caroline] and her California counsel.”

4.   The State Bar Act does not regulate practice in the federal courts.  (See Cowen v. Calabrese (1964) 230 Cal.App.2d 870, 872-873, 41 Cal.Rptr. 441.)

5.   Katz may thus be prevented from recovering payment for legal services he rendered while physically present in California, except those he performed with local counsel under their direct supervision and control.

6.   At least one commentator has suggested that section 6125, even as we interpret it, violates out-of-state attorneys' constitutional rights.  (See Note, supra, 40 So.Cal.L.Rev. at pp. 572-574.)

7.   Of course, lawyers who take on work they are not actually qualified to perform may still be liable for fraud or malpractice in certain circumstances.

8.   We are further persuaded that he need not have filed an application to appear pro hac vice for the privilege of plying California law in Colorado.   The Evans firm filed papers and represented Michael in court, whenever that was necessary, and there is nothing to suggest that Katz was “retained to appear ․ as counsel,” as that term is used in California Rules of Court, rule 983.

WALKER, Associate Justice.

PHELAN, P.J., and CORRIGAN, J., concur.

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