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Lawrence v. Catanzarite11/28/2001
In early 1997, Rebecca G. Lawrence (Lawrence) hired attorney Kenneth J. Catanzarite (Catanzarite) to collect a personal injury judgment previously entered in her favor. In addition to their attorney-client relationship, Lawrence rented an apartment from Catanzarite and worked temporarily for several corporations he controlled. In the course of performing this work, Lawrence sustained several injuries. She also became dissatisfied with the compensation she was receiving and with the legal expenses Catanzarite was running up on her account.
When a partial settlement on the personal injury judgment was received, the parties entered into a written agreement in June 1998 which divided these proceeds and required Lawrence to drop several workers compensation claims stemming from the injuries she suffered while working for Catanzarite. Unhappy with the settlement terms, Lawrence later sued to invalidate the agreement but lost on summary judgment. She now appeals, contending the agreement was unenforceable. Because the agreement was not approved by a workers compensation appeals board or referee as required by statute, we reverse and remand.
I. Background
Represented by other counsel, Lawrence received a $446,000 personal injury judgment against Patrick J. Mandarino in August 1995. This award stemmed from a January 1988 assault. In attempting to collect on that judgment, Lawrence filed motions in late 1996 for involuntary bankruptcy of Valley Business Center and La Palma East Properties, two real estate partnerships in which Mandarino had an ownership interest. In January 1997, Catanzarite entered the picture, agreeing to represent Lawrence and to assist her in collecting on the Mandarino judgment. The following month, Lawrence rented an apartment in an complex owned by Vestax Properties, Inc., a corporation controlled by Catanzarite. The month-to-month tenancy was structured such that if Lawrence was unable to pay, her monthly rent charges would be deducted from funds later collected from Mandarino. In addition, Lawrence began to work for Catanzarite and entities he controlled in March 1997, acting as a property manager, a paralegal and an investigator.
Between March and August 1997, this assortment of relationships continued, though Lawrence sustained injuries during employment, complained about the adequacy of her compensation and challenged the legitimacy of legal fees Catanzarite purportedly incurred on her behalf. In August 1997, Lawrence sought other counsel. At about the same time, Catanzarite cuts off the utilities he was paying on Lawrence's apartment and filed an unlawful detainer to evict her.
In October 1997, Lawrence filed workers compensation claims against Washington Capital Assets, a Catanzarite-controlled limited liability corporation, where she had been employed as a temporary worker since March 1997. Three months later, she filed a wage claim with Department of Industrial Relations against Washington Capital Assets and Catanzarite Law Corporation.
In June 1998, the parties entered into a written settlement agreement. The settlement was made possible when Lawrence received $352,500 from the Valley Business Center involuntary bankruptcy proceedings. Per the terms of the agreement, these proceeds were divided as follows: Lawrence received $155,000, her prior counsel received $142,500 (plus 15 percent of future collections not to exceed $30,000), and Catanzarite received $55,000 plus 15 percent of future collections not to exceed $20,000 from the Valley Business Center matter. The settlement also stated that failing Catanzarite's receipt of a minimum of $94,000, "this Agreement is null and void." In addition, the agreem
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