Question: I live in a free-standing town house with no common walls and only two units in the entire association. The builder left a dangerous defect in my home. I wanted to bring a legal action against the builder and gave $7,500 to an attorney for the retainer fee.
The owner of the second town house wanted to be included in the lawsuit, as he was having the same problem. My attorney prepared a retainer agreement for the other owner to pay his share of the attorney fees. The attorney also prepared documents for the homeowners association for our review and signing.
The other owner never came to our meeting. He became unavailable and unapproachable. All this preparation of documents and time he spent on the phone with the attorney was charged to my retainer.
I proceeded on my own. In mediation/arbitration, I was able to recover $3,000 in damages and have the defective construction corrected.
This settlement was not even close to the more than $16,000 I spent on attorney fees. What are my odds of recovering, in Small Claims Court, the documented time in attorney fees the other owner racked up?
Answer: Discuss with your attorney why efforts he expended in attempting to sign up a new client were charged to your account. Afterward, send a letter to your attorney detailing that discussion. If the attorney entered into an agreement for representation with your neighbor, those costs should have been borne by that client.
Some or all of the attorney's retainer you paid may be recoverable as unearned fees since you accomplished your goal without the help of an attorney. The $3,000 awarded to you constitutes damages that you recovered based on evidence you presented at the mediation.
You should look to recover the money charged by the attorney in his efforts to sign up a new client by making a demand on the attorney directly, by complaining to the State Bar at www.calbar.ca.gov or by bringing an action in court. Depending on the amount, Superior Court may be appropriate (the Small Claims Court jurisdictional limit is $7,500).
To recover money from your neighbor, you would first need to establish that he promised to pay for those services.
Your letter does not state that you were authorized to act on behalf of the association or that you were doing so. Individual homeowners must be very careful not to take on the association's responsibilities.
In a common-interest development it is the association's obligation to repair, maintain and replace items pertaining to the development and to sue in the association's name for damages it sustains.
Send questions to P.O. Box 11843, Marina del Rey, CA 90295 or e-mail firstname.lastname@example.org.