The Second District distinguished prior case law that mandated a criminal malpractice plaintiff establish actual innocence and post conviction relief. In a dispute over an unconscionable or fraudulent fee, the actual innocence requirement does not apply.
John Reiner retained Gary Lincenberg, Vincent J. Marella and their law firm Bird, Marella, Boxer & Wolpert (“Bird”) to represent him in a criminal matter. After the attorney-client relationship terminated Reiner was convicted of various criminal offenses. Reiner sued Bird for breach of written contract, breach of fiduciary duty, fraud, and money had and received. Reiner did not allege he was innocent of the criminal charges or that Bird was negligent in its representation. Rather, Reiner alleged that Bird’s billing practices were fraudulent.
The trial court overruled a demurrer premised on the holdings of Wiley v. County of San Diego (1998) 19 Cal.4th 532 and Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194. In these cases the Supreme Court held a plaintiff must plead and prove actual innocence and post-conviction exoneration to establish legal malpractice in the context of a criminal proceeding. The trial court reasoned that the complaint did not allege malpractice; therefore, Wiley and its progeny were inapposite.
In ruling on a writ of mandate, the Court of Appeal agreed, after acknowledging and distinguishing Lynch v. Warwick (2002) 95 Cal.App.4th 267. In Lynch, the Fourth District held the Wiley-Coscia rule applies to any claim for legal malpractice even if the convicted client seeks only contract damages such as the return of fees.
However, the primary right asserted in Lynch was to competent legal representation and thus involved the same public policy considerations articulated in Wiley and Cosica. Reiner, on the other hand, asserted a different primary right: the right to be billed in accordance with the terms of the retainer agreement and the right not to be subjected to unconscionable, fraudulent or otherwise unlawful billing practices. These allegations did not implicate defendants’ competence. In addition, the pure fee dispute did not raise the policy considerations of a malpractice suit. The Court found allegations that Bird billed for services not reasonably required and charged Reiner an unconscionable fee did not implicate attorney competence because these allegations related to the quantity of the work, not the quality. The Court ordered the trial court to strike any allegations in the complaint directed to the quality of the work performed.
The Court stated that fee disputes are not always claims of malpractice even though they share the same statute of limitations. Although fee disputes may be claims of malpractice in the broadest sense, it was not the type of malpractice the Supreme Court had in mind when it adopted the actual innocence rule.
Finally, the court held that there are countervailing policy reasons for allowing a lawsuit in these circumstances. Attorneys owe clients fiduciary duties that mandate fair, reasonable, and conscionable fees regardless of the guilt or innocence of the client. Absent such a rule, only actually innocent clients could challenge excessive or unlawful fees. Even clients acquitted of criminal charges could not challenge excessive fees unless they could show actual innocence. There is no rational basis for affording criminal defense attorneys a shield against suits to recover excessive or unlawful fees while affording a remedy to blameworthy civil litigants.
Comment: Criminal defendants seeking a refund of fees will allege unconscionable fees rather than incompetent representation. Historically errors and omissions policies do not provide coverage for fee disputes.