Woodland Hills personal injury and car accident attorney Barry P. Goldberg is confronted from time to time with a spouse looking for a personal injury attorney for a severely injured spouse who is hospitalized or otherwise incapable of finding an attorney. While it is always best practice to obtain the signature of the injured party, often an attorney must commence work and investigation right away and the spouse is the one who signs the retainer agreement. Again, it is best practice to have the injured party “re-execute” the retainer agreement when he or she is doing better. However, is the original retainer agreement binding without the injured party’s signature?
The answer may surprise you. Based upon recent case law and interpretation of Family Law statutes, a spouse can sign on behalf of an injured spouse even without a conservatorship, guardianship or express power of attorney! Further, a law firm is free to enforce an attorney fee lien if he or she is later discharged. This is not necessarily intuitive because liens arise from contractual agreement. Further, Quantum Meruit liens, based upon value provided, are only enforceable if the services are rendered “at the request” of the injured party.
The Old Law- “[a] wife cannot make a contract for the payment of money.”
Before 1975 husbands were recognized by statute as having the exclusive right to manage and control the community personal property. (Former Civ. Code, §§ 168, 171c; Spreckels v. Spreckels (1897) 116 Cal. 339, 340-341; General Ins. Co. of America v. Schian (1967) 248 Cal.App.2d 555, 557; In re Marriage of Pendleton and Fireman (2000) 24 Cal.4th 39, 51.) As the “agent of the community,” the husband had the “power to divest the parties of their community property by his own act in the same manner that he might divest himself of his separate property, so long as he did not make a gift of the former without consideration.” (Grolemund v. Cafferata (1941) 17 Cal.2d 679, 684; former Civ. Code, §§ 161a, 172; Schian, supra, at p. 557.) The husband also had management and control over the community real property, but after a 1917 statutory amendment, his wife’s consent was needed to lease, sell, convey, or encumber community real property. (Former Civ. Code, § 172a; Stewart v. Stewart (1926) 199 Cal. 318, 339; In re Risse (1957) 156 Cal.App.2d 412, 418.)
After 1874 a wife was authorized by statute to subject her own separate property to debts she contracted after marriage, but not the community property unless the husband executed a pledge or mortgage securing the wife’s debt by the community property. (Former Civ. Code, § 167; Marlow v. Barlew (1879) 53 Cal. 456, 459; Greiner v. Greiner (1881) 58 Cal. 115, 119; Steinberger v. Young (1917) 175 Cal. 81, 87; Meyer v. Thomas (1940) 37 Cal.App.2d 720, 725; Schian, supra, at p. 557.)
Under this arcane statutory scheme, the courts concluded that no presumption arose from the marital relationship alone that the husband, as agent of the community, was authorized to manage his wife’s separate property. Courts required some evidence of agency before a husband could dispose of his wife’s separate property. (Wagoner v. Silva (1903) 139 Cal. 559, 563.) Because a wife was not inherently the community’s agent, courts likewise required evidence of her agency to make her contracts binding on her husband or the community property. (Hulsman v. Ireland (1928) 205 Cal. 345, 349.)
Further, in the absence of a contrary agreement between spouses, a “cause of action for personal injuries suffered by either spouse during marriage, to whatever extent such cause of action may constitute property [citation] as well as any recovery therefor, constitutes community property. . . .” (Zaragosa v. Craven (1949) 33 Cal.2d 315, 320-321 (Zaragosa).) Amendments to former Code of Civil Procedure section 370 in 1913 and 1920 authorizing a wife to sue for her own personal injuries without joining her husband in the action did not alter the community property nature of this chose in action. (Zaragosa, supra, at pp. 319-320.)
The Law Since 1975—a wife has equal interest in the management and control of community property.
Dramatic statutory changes to a wife’s authority to make a contract affecting community property took effect in 1975. The major change was that wives gained an equal interest in the management and control of community property. “[T]he Legislature repealed the declaration that ‘The husband is the head of the family” (former [Civ. Code] § 5101); it provided that ‘either spouse’ rather than ‘the husband’ has the management and control of both the community personal property ([former Civ. Code] § 5125(a)) and the community real property ([former Civ. Code] § 5127); and throughout the Family Law Act it gave the wife the same property rights as the husband by use of the sex-neutral designation of ‘spouse’.” (In re Marriage of Schiffman (1980) 28 Cal.3d 640, 643.)
A related statutory change authorized either spouse to make a contract binding on the community property. (Family Code section 910.) Family Code section 780 codified what Zaragosa, supra, 33 Cal.2d 315 determined to be the community property nature of the right to recover money for personal injuries suffered during marriage by a married person.
An Incapacitated Spouse
“[T]he procedure for management and control. . . of the community property” when one spouse “either has a conservator of the estate or lacks legal capacity to manage and control community property. . . is that prescribed in Part 6 (commencing with Section 3000) of Division 4 of the Probate Code.”(Family Code section 1103(a).)
Probate Code section 3012 provides that “(b) [a] spouse lacks legal capacity to:
(1) Manage and control, including legal capacity to dispose of, community property if the spouse is substantially unable to manage or control the community property.
(2) Join in or consent to a transaction involving community property if the spouse does not have legal capacity for the particular transaction measured by principles of law otherwise applicable to the particular transaction.” In general, however, one spouse’s “lack or alleged lack of legal capacity” does not affect the other spouse’s right “to manage and control community property” “[s]ubject to [Probate Code] [s]ection 3071.”
Go Ahead, Get the Signature of the Spouse!
The 1975 statutory changes created equal rights in both spouses to manage and control community property and to enter into contracts binding the community. In that role each spouse is the statutory agent of the other absent circumstances that restrict authority to enter into a contract. Considering this statutory agency and a spouse’s “community property” stake in “money . . . to be received” as damages “for personal injuries” suffered by the other spouse “during the marriage,” (Fam. Code, § 780), the courts should conclude that a spouse is authorized to retain an attorney to represent an incapacitated spouse. Therefore, a basis for the attorney’s lien is created.
While it is always best practice to obtain the signature of the injured party, personal injury lawyers should feel reasonably confident with a retainer signed by a spouse. This particularly important so that an attorney can commence an investigation and preserve valuable evidence for the injured spouse’s case and the community property.