Summarizing, explaining and commenting on legal developments impacting California professionals
The Fourth District affirms the trial court’s disqualification of counsel for reviewing and failing to immediately return attorney-client privileged documents.
Grant Clark, represented by Higgs, Fletcher & Mack LLP (“Higgs”), sued VeriSign, Inc. for wrongful termination. The trial court disqualified Higgs after it found the firm had received and excessively reviewed privileged documents. The court determined Higgs’ conduct could affect the outcome of the litigation. The paramount concern of protecting the public trust in the administration of justice and integrity of the bar outweighed any infringement of Clark’s right to counsel of his choice.
The First District holds that an attorney engaging in ongoing serious ethical violations is not entitled to quantum meruit fee recovery.
R. Thomas Fair began representing Karl E. Bakhtiari when he sought legal advice about real estate investments. Fair and Bakhtiari went into business together and operated under an oral agreement. For over a decade Fair and Bakhtiari formed partnerships where Fair performed legal services in exchange for substantial compensation and profit distributions. Fair never complied with California Rule of Professional Responsibility 3–300, which requires informed written consent, as well as a fair and reasonable transaction.
The Fourth District would not disqualify a law firm representing a public entity under a contingency fee agreement because the action was not brought on the public’s behalf, but in the entity’s own name to recover compensatory damages.
The Orange County Water District incurred costs to investigate contamination in groundwater aquifers. It retained Miller, Axline & Sawyer on a contingency fee basis to recover the investigation and remediation costs. Defendants moved to disqualify the Miller Firm based on the contingency fee arguing that precedent prohibited a public entity from paying a private attorney to prosecute an action on behalf of the public. The trial court denied the motion, finding there was no prohibition because the Water district did not pursue the action on behalf of the public, but on its own behalf for its own damages.
The California Supreme Court overrules a Court of Appeal decision granting an anti‑SLAPP motion where an attorney acted adversely to his former client with respect to an ongoing matter that was the precise subject of his prior representation.
Oasis West Realty (“Oasis Realty”) retained Reed Smith partner Goldman to represent it in its effort to obtain approval of a redevelopment project. Goldman represented Oasis Realty on the project from 2004 until he terminated the representation in 2006. In 2008, after the city council approved the redevelopment project, Goldman participated in a campaign to thwart the same project by soliciting signatures on a referendum petition to overturn the council’s approval. Oasis Realty sued Goldman and Reed Smith for breach of fiduciary duty, professional negligence and breach of contract arguing Goldman had breached his fiduciary duties to Oasis Realty by opposing the project.
The First District holds that an arbitrator was required to disclose that his practice focused upon representing lawyers in litigation with former clients.
Nancy Kors disagreed with her attorneys, Benjamin, Weill & Mazer (“BWM”) about unpaid legal bills. When Kors moved to compel arbitration under the California Arbitration Act (“CAA”), the trial court directed binding arbitration under the Bar Association of San Francisco (“BASF”) rules. Kors opposed BWM’s petition to confirm the arbitration award and moved to vacate it because the chief arbitrator failed to disclose that his practice focused on representing lawyers in litigation with former clients as required by the CAA, but not the BASF rules. The trial court denied Kors’s motion and confirmed the award.
The Second District holds that a provision in a contingency fee agreement that mandated the case proceed to settlement or trial was void as against public policy.
Don Lemmer represented Jeffrey Charney on an hourly basis in a lawsuit against Charney’s former employer Teleflora LLC. After several months, the parties entered into a new contingency fee agreement at Charney’s request after Charney promised to take the case to trial or settlement to ensure that Lemmer was paid. However, Charney believed Teleflora’s owner would appeal any judgment and extend the litigation to exhaust Charney’s resources, and he did not intend to proceed absent a settlement. Charney instructed Lemmer to accept a walk away settlement less than one month before trial.
The First District holds attorney conduct warrants substantial sanctions.
Michael and Andrew Watters of O’Brien Watters & Davis LLP represented Jill Davenport in her dissolution. Her former husband Ken Davenport was represented by multiple different law firms. The proceedings were extensive, and generated nineteen volumes of court files, considered outrageous in a family law case.
The Third District holds pleadings filed by a disqualified attorney may be stricken.
Leon Schimmel served as medical director for Community Health Associates Medical Group (“Community Health”). He was defended in a wrongful termination suit filed by a former employee by Kelli Kennaday and her firm, Wilke, Fleury, Hoffely, Gould & Birney (Kennaday).
The Second District holds that the case-with-a-case proof of causation generally applicable to malpractice and breach of fiduciary duties claims is irrelevant to claims that an attorney misappropriated settlement funds.
Luis Gutierrez was represented in a class action against his employer Lockheed Corporation by Thomas Girardi and his law firm. Over a ten year period Girardi negotiated settlements with most of the Lockheed defendants, and Gutierrez received a series of payments as his share. Three of the non-settling defendants prevailed on a motion for summary judgment based on the statute of limitations.
The Second District holds that actual injury sufficient to trigger the statute of limitations did not occur at the time a partnership agreement was drafted, but sixteen years later, when the dissolution provision of the agreement was triggered or when plaintiffs began to incur legal fees in response to a third party’s attempt to dissolve the partnership under the terms of that agreement.
Robert and Oliver Inge founded the Inge Realty Company. In 1988, they retained Gibson, Dunn & Crutcher to advise them regarding restructuring the company to minimize income tax liabilities and implement a succession plan that would ensure that Inge Realty remained a family-run enterprise after they could no longer run the business. Gibson, Dunn recommended a limited partnership and drafted the partnership agreement.
