Welcome to the Lawyer Ethics Newsletter for April 2017!
New Rules of Professional Conduct Arrive at Supreme Court
Meeting the deadline imposed by the California Supreme Court in 2014, the State Bar of California has forwarded to the California Supreme Court a new set of Rules of Professional Conduct. The new rules adopt the numbering system and many rules now contained in the American Bar Association’s Model Rules of Professional Conduct, including a complete ban on lawyer sexual relations with a client. Many peculiarly California concepts remain in the new rules, however, including the California requirement that legal fees may not be unconscionable, unlike the requirement in the Model Rules that fees must be reasonable. The California Supreme Court must approve the new Rules of Professional Conduct before they are effective. The complete text of the new proposed rules is here.
Disbarment Recommended For San Diego Lawyer For Misconduct As Trustee
In the Matter of Schooler, Review Dept. State Bar Court, case no. 12-O-11554, filed 12/6/16, modified 1/3/17. This disciplinary proceeding arose not from the practice of law but from the attorney’s actions as trustee and executor of her parents’ multi-million dollar estate and trusts. She was found culpable of violating her fiduciary duties, making misrepresentations to the probate court, refusing to follow court orders and pay sanctions, and maintaining an unjust action by filing frivolous appeals. The hearing judge recommended discipline including a two-year actual suspension. The State Bar appealed seeking a finding of additional aggravation and disbarment. The Review Dept. affirmed the hearing judge’s factual and culpability findings and recommended disbarment given the attorney’s egregious misconduct and the substantial harm she caused the beneficiaries.
One Year SOL for Legal Malpractice Runs From Time Motion to Withdraw Made, Not From Time Motion Granted
Flake v. Neumiller & Beardslee, Third App. Dist., case no. C79790, filed 1/31/17, published 3/2/17. Former counsel moved to withdraw from representing a client. The client sued former counsel for malpractice more than one year after the motion to withdraw was made, but less than one year after the motion was granted. The trial court granted summary judgment to former counsel based on the one-year statute of Code of Civil Procedure section 340.61 on the ground that the client could not have had an objectively reasonable expectation that former counsel was continuing to represent him after the motion to withdraw had been served. The Court of Appeal agreed. Once the former counsel told the client, via the motion to withdraw, that the case had already been handed off to another attorney, the client was on notice that former counsel was no longer working for him. Because this lawsuit was filed more than one year after that time, no triable issue of fact remains as to the statute of limitation defense.
Law Firm Disqualified For Failing to Deal Appropriately With Inadvertently Produced Confidential Document
McDermott, Will & Emery v. Sup. Ct., Fourth App. Dist., Div. 3, case no. G053623, filed 4/18/17. The trial court found that the real party in interest did not waive the attorney-client privilege by inadvertently emailing a confidential email he received from his lawyer to his sister. In a separate order, the trial court disqualified the defendant law firm’s counsel for failing to recognize the privileged nature of the email and using it even after the real party in interest objected that it was an inadvertently produced confidential document. Defendants petitioned the court of appeal for a writ of mandate directing the trial court to vacate both its order finding no waiver of the attorney-client privilege as it applied to the email, and its order disqualifying Defendants’ counsel in the underlying lawsuits. The Court of Appeal denied the petition in its entirety. Substantial evidence supports the trial court‟s orders and the court did not abuse its discretion in selecting disqualification as the appropriate remedy to address the lawyer’s violations of their duty under State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644 regarding the handling of inadvertently produced confidential information.
Failure to Follow Statute Requiring Written Fee Agreement Dooms Attorney Fee Claim
Leighton v. Forster, First App. Dist., Div. 4, case no. A145601, filed 02/09/17. Attorney sued former client for breach of an attorney fee contract and an account stated, seeking damages in excess of $114,000. In granting client’s summary judgment, the trial court found, among other things, that (1) an engagement letter appellant emailed to client’s husband was not a valid contract because it was never signed as required by Bus. & Prof. Code section 6148; and (2) any claim for payment of the reasonable value of appellant’s services was barred by the two-year statute of limitations of Code Civ. Proc. section 339(1.) Attorney had originally worked as a contract attorney for the lawyer representing client and client’s husband in a litigation matter. After that lawyer died, attorney worked for the couple directly, on a limited scope basis while they represented themselves in litigation. She sent her client’s husband a fee agreement by email but told him in that email that they did not have to sign it and send it back, just signify agreement with its terms by email. They did not explicitly signify agreement with the terms but attorney continued to work for them anyway, eventually building up a bill over $114,000. Client’s husband, the primary driver of litigation died. Client wife was surprised at the size of the bill and balked at paying it. Attorney was relieved of her limited scope engagement by the court in August 2008. She filed an action against her former client in June 2012. The Court of Appeal upheld the summary judgment, finding that attorney’s failure to follow section 6148 meant that there was no written fee agreement; the email exchange between attorney and husband did not meet the statutory requirements. Because any quantum meruit claim is barred by the applicable statute of limitations.
That’s Why They Call It Practice: Protect Yourself With A Good Fee Agreement
The Leighton v. Forster case discussed presents an interesting lesson on the hazards of not having a written agreement. The opinion quite learnedly outlines much basic law on attorney’s fees all pointing to the big conclusion that an attorney has the burden to prove entitlement to the fee. Circumstances like those outlined in the opinion are rare; fortunately, most attorneys are conscientious about risk management when it comes to getting paid. The attorney in this opinion appears to have had little experience directly dealing with clients, a position some young and inexperienced lawyers faced with the challenge of opening their own practices might also find themselves in. Law school is not usually the place where how to establish your right to fees, appropriately bill the client and manage the collection of your receivables is taught. Some online resources can be a big help, especially the form fee agreements and the Arbitration Advisories issued the Mandatory Fee Arbitration Committee of the State Bar of California, memos that are intended to guide the volunteer fee arbitrators in deciding their cases. Minimum Continuing Legal Education (MCLE) can also be a good place to gather basic knowledge, such as the presentation for the San Diego County Law Library “Protect Youself With a Good Fee Agreement.” Ethics counsel can also help to make sure your fee agreement contains what it needs to contain and doesn’t contain what it should not. The most important point is that some amount of thought should go into your fee agreement and your fee agreement procedures. Simply adopting a form that might have been handed down from another attorney is not enough.
Questions about fee agreements? Call me at (619) 696-0526.