End-of-life notice: American Legal Ethics Library
As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.
Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.
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California Legal Ethics
1.1:100 Comparative Analysis of CA Rule
CRPC 3-110 states that an attorney must not “intentionally, recklessly, or repeatedly fail to perform legal services with competence.” This rule is California’s counterpart to MR 1.1. A lawyer is competent under CRPC 3-110(B) if he uses: “1) diligence, 2) learning and skill, and 3) mental, emotional, and physical ability reasonably necessary.” MR 1.1 defines competence as the “legal knowledge, skill, thoroughness and preparation reasonably necessary.”
CRPC 3-110, unlike MR 1.1, requires evidence that the lawyer’s incompetence was intentional, or repeated, or a product of reckless disregard. The California rule more accurately reflects the disciplinary practice in other states. [See 1.1:200 Disciplinary Standard of Competence, infra, for further discussion].
Both statutes allow attorneys to take on matters for which they lack the learning and skill required, provided that they take necessary remedial steps. In relevant part, CRPC 3-110(C) allows an attorney to cure a lack of learning and skill by either associating or consulting with another attorney reasonably believed to be competent, see CRPC 3-110(C)(1), or by “acquiring sufficient learning and skill before performance is required,” see CRPC 3-110(C)(2). Similarly, MR 1.1 Comment  allows an attorney to achieve the requisite skill and knowledge for competence through necessary study or the “association of a lawyer of established competence.”
Both MR 1.1 Comment  and the Drafter’s Notes to CRPC 3-110 allow a lawyer to assist a client in an emergency where referral or consultation is impractical, despite lacking the skill ordinarily required. However, both rules limit such emergency assistance to that which is reasonably necessary in the circumstances. See MR 1.1 Comment ; CRPC 3-110 Drafter’s Notes.
DR 6-101(A) is similar to CRPC 3-110. It states that a lawyer must prepare adequately when handling a matter, (see DR 6-101(A)(2), and must not neglect matters, (see DR 6-101(A)(3)), which corresponds to CRPC 3-110(B)’s mandate of competence). Also, the Model Code allows an attorney to take on a matter for which he or she is not competent where (1) he or she associates a competent lawyer, see DR 6-101(A)(1), or (2) under EC 6-3, where the attorney has a good faith expectation of becoming qualified through study and investigation, so long as such preparation does not result in an unreasonable delay or expense to the client. These criteria are similar to CRPC 3-110(C)’s requirements for taking on matters without sufficient learning and skill.
Unlike the Drafter’s Notes of CRPC 3-110, the DR are silent as to providing assistance under emergency circumstances.
1.1:200 Disciplinary Standard of Competence
A lawyer’s negligence may lead to malpractice liability if it harms the client, but discipline generally will not be meted out for isolated instances of incompetent performance. See Trousil v. State Bar (1985) 38 Cal.3d 337, 211 Cal.Rptr. 525, 695 P.2d 1066 (lawyer suspended for 6 months for failing to act competently in four separate matters; in each matter, the lawyer failed to keep the client informed of the situation and often did nothing for the client for periods as long as 29 months).
CRPC 3-110(A) states that an attorney “shall not intentionally, recklessly or repeatedly fail to perform legal services with competence.” [See also 1.1:101 Model Rule Comparison, supra; 1.1:330 Standard of Care, infra]. CRPC 1-100(A) enables the Board of Governors of the State Bar of California to discipline members for “willful” breaches of any of the rules contained in the CRPC. See also B&PC § 6103 (“any violation” of an attorney’s oath or duties is cause for disbarment or suspension).
The State Bar distinguishes between willful and negligent behavior performed by the attorney. See Lester v. State Bar (1976) 17 Cal.3d 547, 131 Cal.Rptr. 225, 551 P.2d 841 (willful conduct consisted of attorney’s repeated failure to perform legal services after being paid and retained); Hulland v. State Bar (1972) 8 Cal.3d 440, 105 Cal.Rptr. 152, 503 P.2d 608, (attorney failed to perform services he was paid to perform and made client sign a confession of judgment for fees). Willfulness does not necessarily require knowledge of the provision violated; rather, it requires that the attorney “`knew what he was doing or not doing and that he intended either to commit the act or to abstain from committing it.”’ King v. State Bar (1990) 52 Cal.3d 307, 313-314, 276 Cal.Rptr. 176, 801 P.2d 419 (quoting Zitny [Zitny] v. State Bar (1966) 64 Cal.2d 787, 792, 51 Cal.Rptr. 825, 415 P.2d 521).
California imposes discipline where the disregard of the client matter was done willfully. Davis v. State Bar (1983) 33 Cal.3d 231, 188 Cal.Rptr. 441, 655 P.2d 1276. For examples where discipline was imposed for willful incompetence, see King v. State Bar (1990) 52 Cal.3d 307, 314, 276 Cal.Rptr. 176, 801 P.2d 419 (decided under former CRPC 6-101 (1975), which contained the same “substan[tive]” rule as CRPC 3-110) (neglecting to serve a complaint and summons, as well as failing to turn over former client’s files, violated this rule); Drociak v. State Bar (1991) 52 Cal.3d 1085, 278 Cal.Rptr. 86, 804 P.2d 711 (attorney suspended from legal practice for one year (stayed) and placed on probation for two years, including 30 days’ actual suspension for having clients pre-sign court verifications). See also Read v. State Bar (1991) 53 Cal.3d 394, 279 Cal.Rptr. 818, 807 P.2d 1047 (decided under former CRPC 6-101 (1975), CRPC 3-110’s predecessor) (pattern of misconduct including multiple acts of bad faith, dishonesty, concealment, and overreaching, misappropriation of funds, counseling client to perjure herself, and client abandonment violates rule and warrants disbarment); In the Matter of Sampson (Review Dept. 1994) 3 Cal. State Bar Ct. Rptr. 119, 127 (failure to supervise practice and fulfill trust fund responsibilities constituted reckless failure to perform competently) (fourteen instances of failing to pay medical liens on clients’ recovery constituted repeated failure to perform competently); In the Matter of Broderick (Review Dept. 1994) 3 Cal. State Bar Ct. Rptr. 138 (failure to communicate with client and keep client funds safe constitutes repeated failure to perform legal services competently). Cf., In the Matter of Whitehead (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 354, 365-366 (decided under former CRPC 6-101 (1975), CRPC 3-110’s predecessor) (attorney who obtained reinstatement of appeal after his neglect caused appeal’s dismissal did not violate rule).
An attorney’s neglect of his client’s case was found to be willful after the attorney failed to serve the complaint on a defendant for three years. See Arden v. State Bar (1987) 43 Cal.3d 713, 239 Cal.Rptr. 68, 739 P.2d 1236. The state bar found that the act was a conscious disregard of the requirements of professional diligence and good judgment and could not be said to have resulted from mere inadvertence or mistake. Arden v. State Bar (1987) 43 Cal.3d 713, 239 Cal.Rptr. 68, 739 P.2d 1236. It is a violation of the ethical duties of attorney to fail to perform a legal service for which attorney has been retained and to willfully fail to communicate with a client. See Lister v. State Bar (1990) 51 Cal.3d 1117, 275 Cal.Rptr. 802, 800 P.2d 1232, (failure to communicate with client, to protect client’s interests, to return files on demand, to cooperate in disciplinary investigations, to withdraw from matter which attorney knows he is incompetent to handle and to give client notice of withdrawal from employment warrants nine month actual suspension); Harris v. State Bar (1990) 51 Cal.3d 1082, 275 Cal.Rptr. 428, 800 P.2d 906 (attorney found to have abandoned client who retained her to prosecute wrongful death action, where the attorney did virtually nothing for four years except to file and serve complaint, both on the last possible day).
A showing of willfulness is not always essential when establishing that an attorney has improperly withdrawn from employment or failed to act competently. The case law distinguishes between varying degrees of neglect. For example, gross negligence, while not an intentional act of misconduct, is still so serious as to warrant discipline and may even justify disbarment. Walker v. State Bar (1989) 49 Cal.3d 1107, 264 Cal.Rptr. 825, 783 P.2d 184 (an attorney suffering from pancreatitis, alcohol and drug addiction, and paranoid delusions may still have the necessary state of mind to justify discipline by the State Bar for abandonment of practice); Simmons v. State Bar (1970) 2 Cal.3d 719, 87 Cal.Rptr. 368, 470 P.2d 352 (attorney who accepted fees and then failed to communicate with client three times as well as failing to inform clients of his suspension by State Bar shows “common pattern” of gross negligence and carelessness).
If an attorney essentially withdraws from representation, he is obligated to give due notice to the client. Walker v. State Bar (1989) 49 Cal.3d 1107, 264 Cal.Rptr. 825, 783 P.2d 184. It is serious misconduct to willfully fail to perform services for which the attorney is retained, or to willfully fail to communicate with a client. Hunniecutt v. State Bar (1988) 44 Cal.3d 362, 243 Cal.Rptr. 699, 748 P.2d 1161. An example of willfully failing to communicate with a client can be found in Kapelus v. State Bar (1987) 44 Cal.3d 179, 242 Cal.Rptr. 196, 745 P.2d 917 (the attorney agreed to represent the client in a post administrative appeal suit against the federal government, and subsequently failed to answer the client’s calls and registered letters, and failed to send the client the file).
Gross carelessness and negligence constitute a violation of the of attorney’s oath to discharge duties faithfully to the best of his knowledge and ability. Further, actions of this nature show moral turpitude, and therefore constitute a breach of fiduciary duty. Simmons v. State Bar (1970) 2 Cal.3d 719, 87 Cal.Rptr. 818, 470 P.2d 352. However, where the attorney exercises a reasoned use of judgment, professional negligence has not been found. If an attorney acts in good faith and in honest belief that his acts and advice are well founded and in the best interest of his client, he will not be held liable for mere error of judgment. In re Watts (1903) 190 U.S. 1, 47 L.Ed. 933, 23 S.Ct. 718; see also Davis v. Damrell (1st Dist. 1981) 119 Cal.App.3d 883, 174 Cal.Rptr. 257.
The following comments are taken from Karpman & Margolis pages 4-6 with certain conforming changes:
CRPC 1-100 establishes the binding nature of the CRPC upon all members of the State Bar and the authority of the Board of Governors to discipline members for any willful breach.
When a lawyer serves a client both as a lawyer and as one who renders non-legal services, he or she must conform to the CRPC in the provision of all services. Kelly v. State Bar (1991) 53 Cal.3d 509, 280 Cal.Rptr. 298, 808 P.2d 808 (business transaction between lawyer and client) and Layton v. State Bar (1990) 50 Cal.3d 889, 904, 268 Cal.Rptr. 845, 789 P.2d 1026 (lawyer acting as executor).
A “willful breach” of the CRPC does not necessarily indicate an intent to violate ethical guidelines; it means merely that the lawyer must have acted, or omitted to act purposely to do the act forbidden by the rule, or not to do the act required by the rule. Willfulness may be proved by direct or circumstantial evidence. Zitny v. State Bar (1966) 64 Cal.2d 787, 792, 51 Cal.Rptr. 825, 415 P.2d 521. See also In the Matter of Respondent G (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 181. The scope of a lawyer’s fiduciary duty may be determined as a matter of law based on the CRPC, which together with statutes and general principles relating to other fiduciary relationships, all help define the duty component of the fiduciary duty that a lawyer owes to his or her client. Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 41 Cal.Rptr.2d 768.
The duties to which a lawyer in this state are subject are not exclusively delineated by the CRPC and these rules are not intended to supersede common law obligations. Santa Clara County Counsel Attorneys Assn. v. Woodside (1994) 7 Cal.4th 525, 28 Cal.Rptr.2d 617, 869 P.2d 1142.
Disciplinary rules, which are mandatory, state the minimum level of conduct below which no lawyer may fall without being subject to disciplinary action. Hawk v. Superior Court of Solano County (1st Dist. 1974) 42 Cal.App.3d 108, 116 Cal.Rptr. 713. Although a lawyer’s conduct failed to fall squarely within the parameters of CRPC 3-310, a conflict of interest was found where he had served on the Board of a Corporation and acquired confidences and secrets prior to becoming a lawyer. A motion to disqualify was sustained based upon this rule’s general prohibition against impropriety by lawyers. Note: This opinion suggests that there may be conduct not addressed by the rules that nevertheless can lead to liability. Allen v. Academic Games Leagues of America, Inc. (C.D. Cal. 1993) 831 F.Supp. 785.
B&PC § 6049.1, B&PC § 6049.2, B&PC § 6103 (defining “willful” violation necessary for discipline).
Cal. Rule of Court 983(c) (counsel admitted pro hac vice subject to the CRPC).
State Bar Court Rules of Procedure 800-806 (Chapter 16) provide for an expedited disciplinary procedure for attorneys who have been disciplined for professional misconduct in other jurisdictions.
The following comments are taken from Karpman & Margolis pages 31-35 with certain conforming changes:
In a narrowly limited conflicts decision, the California Supreme Court held that the requirement of undivided loyalty to the first client negates any duty on the part of the attorney to inform the second client of the statute of limitations applicable to the proposed lawsuit or even of the advisability of seeking alternative counsel. Justice Arabian, in a 4-3 decision, stated that the holding is confined to the circumstances typified by this case--one in which the lawyer is confronted with a mandatory and unwaivable duty not to represent the second client in light of an irremediable conflict with the existing client and acts promptly to terminate the relationship after learning of the conflict. However, the court cautioned the bar that, in the absence of such an irreducible conflict and mandatory duty to withdraw, a lawyer’s duty to advise a new client or even a “prospective” client once the nonengagement decision has been taken, may well be more extensive. Flatt v. Superior Court (1994) 9 Cal.4th 275, 36 Cal.Rptr.2d 537, 885 P.2d 950.
Taking no action in a case, despite receiving numerous reminders that the matter was pending, together with inquiries from the client, satisfied “willfulness” standard of this rule. King v. State Bar (1990) 52 Cal.3d 307, 276 Cal.Rptr. 176, 801 P.2d 419 (lawyer’s failure for 3 years to cause an action to be served on any defendant involved a conscious disregard of the requirements of reasonable diligence and good judgment, and cannot be said to have resulted from mere inadvertence or mistake).
A lawyer’s sudden and unannounced move from the state, even though the move may result in abandonment of several clients, did not result in a “pattern” of misconduct, but did constitute violation of this rule. Young v. State Bar (1990) 50 Cal.3d 1204, 270 Cal.Rptr. 315, 719 P.2d 994. A lawyer’s move from her office, without advising her clients of her whereabouts which led to abandonment of their cases, warranted disbarment. Read v. State Bar (1991) 53 Cal.3d 394, 425, 279 Cal.Rptr. 818, 807 P.2d 1047 (clients should not have to be forced to play “hide and seek” as lawyer successively opened and closed numerous offices); see also In re Billings (1990) 50 Cal.3d 358, 361, 267 Cal.Rptr. 319, 787 P.2d 617 (lawyer moved office without notifying clients).
Where a lawyer failed to supervise his personal injury practice and to fulfill trust fund responsibilities in addition to his failure to pay medical liens, his conduct was so remiss as to be reckless. Accordingly he violated CRPC 3-110(A). In the Matter of Sampson (Review Dept. 1994) 3 Cal. State Bar Rptr. 119.
A lawyer who did not respond to a personal injury client’s requests for information and lost her check from an insurance company failed to perform legal services competently and accordingly violated CRPC 3-110(A). In the Matter of Broderick (Review Dept. 1994) 3 Cal. State Bar Ct. Rptr. 138.
Delay in the performance in a single client’s matter may not rise to the level of proof of “reckless disregard” or “repeated failure” to perform legal services competently in violation of this rule. In the Matter of Whitehead (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 354, 365-366. However, repeated acts of negligence may justify a finding of willful violation of this rule, In the Matter of Respondent G (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 175, 181, and habitual disregard by a lawyer of the clients’ interests, combined with failure to communicate with such clients, may constitute an act of moral turpitude justifying substantial discipline. Carter v. State Bar (1988) 44 Cal.3d 1091, 1100, 245 Cal.Rptr. 628, 751 P.2d 894; Kent v. State Bar (1987) 43 Cal.3d 729, 735, 239 Cal.Rptr. 77, 739 P.2d 1244; McMorris v. State Bar (1983) 35 Cal.3d 77, 85, 196 Cal.Rptr. 841, 672 P.2d 431; In the Matter of Collins (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 1. Even if such neglect is grossly negligent or careless, rather than intentional or dishonest, the State Bar may find such conduct to involve moral turpitude warranting discipline. Stanley v. State Bar (1990) 50 Cal.3d 555, 566, 268 Cal.Rptr. 183, 788 P.2d 697.
A lawyer’s standard of legal representation is the same regardless if the work is performed pro bono or for a fee, see Segal v. State Bar (1988) 44 Cal.3d 1077, 245 Cal.Rptr. 404, 751 P.2d 463, or when clients are from high crime or poverty-stricken areas, see Blair v. State Bar (1989) 49 Cal.3d 762, 780, 263 Cal.Rptr. 641, 781 P.2d 933.
A lawyer is not excused from failure to perform where the client allegedly agreed that the lawyer did not have to perform unless paid in full. Fitzpatrick v. State Bar (1977) 20 Cal.3d 73, 141 Cal.Rptr. 169, 569 P.2d 763. But see In the Matter of Kennon (Review Dept. 1990) 1 Cal. State Bar Ct. Rptr. 267, holding that although preliminary consultations with a client created a lawyer-client relationship, the lawyer was not culpable of failure to perform (by not filing a lawsuit) in the absence of clear and convincing evidence that he had agreed to do so.
If a lawyer suspects that a client’s claim is not valid, she may not just stop work. She must fully investigate the validity of the claim, and continue to perform until such time as she can properly withdraw. Failure to withdraw or to take any action on the client’s case in order to avoid prejudice, may result in violation of this rule. Guzzetta v. State Bar (1987) 43 Cal.3d 962, 979, 239 Cal.Rptr. 675, 741 P.2d 172; see also Davis v. State Bar (1983) 33 Cal.3d 231, 188 Cal.Rptr. 441, 655 P.2d 1276.
If a lawyer decides, for strategic reasons, to delay a client’s case, that strategy must be communicated to the client and the client must assent; otherwise, a violation of the rule may be found. See Calvert v. State Bar (1991) 54 Cal.3d 765, 773-775, 1 Cal.Rptr.2d 684, 819 P.2d 424; Hartford v. State Bar (1990) 50 Cal.3d 1139, 1149-1150, 270 Cal.Rptr. 12, 791 P.2d 598 (violation of the rule found where the lawyer’s decision not to proceed not adequately communicated to clients).
If an impasse develops between the attorney and the client, the lawyer may not simply fail to take action. In the Matter of Koehler (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 615, 626.
However, a lawyer’s proper exercise of judgment in deciding not to proceed for tactical reasons, or because to proceed would be fruitless, does not constitute a violation of this rule. In the Matter of Respondent C (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 439, 449-450; see also People v. Ledesma (1987) 43 Cal.3d 171, 216, 233 Cal.Rptr. 404, 729 P.2d 839 (practically, it is often difficult for a court to second-guess lawyer’s tactical judgment).
CRPC 3-110(B), Lack of Competence
The California Supreme Court has in the past recognized a problem in using disciplinary proceedings to punish lawyers for mere negligence, mistakes in judgment or lack of experience. Lewis v. State Bar (1981) 28 Cal.3d 683, 688-689, 170 Cal.Rptr. 634, 637, 621 P.2d 258, citing to Call v. State Bar (1955) 45 Cal.2d 104, 110-111, 287 P.2d 761; and Friday v. State Bar (1943) 23 Cal.2d 501, 505-508, 144 P.2d 564. However, with the enactment of former CRPC 6-101 (1975), (now CRPC 3-110) the court had a disciplinary rule giving it the authority to discipline for lack of legal knowledge and skill, if the attorney fails to take steps to acquire such knowledge and skill after accepting a case. See Lewis v. State Bar (1981) 28 Cal.3d 683, 170 Cal.Rptr. 634, 621 P.2d 258 (lawyer who mishandled the administration of estate was disciplined, when he had no previous experience in probate matters and failed at all times to consult with more experienced counsel). See also Layton v. State Bar (1990) 50 Cal.3d 889, 904, 268 Cal.Rptr. 845, 789 P.2d 1026 (lawyer’s argument that he should be held to lesser standard of competence in his handling of an estate matter, because he was a family law specialist, rather than a probate specialist, rejected by court).
Since a criminal defendant has a constitutional right to the effective assistance of counsel, a conviction may be set aside and a new trial granted, where it is shown that the defense lawyer was incompetent. People v. Pope (1979) 23 Cal.3d 412, 152 Cal.Rptr. 732, 590 P.2d 859.
When a lawyer performs in a dual capacity, i.e. performing both legal services and services that could be performed by a layperson, the services rendered in the dual capacity must conform to the standards of this rule. Layton v. State Bar (1990) 50 Cal.3d 889, 904, 268 Cal.Rptr. 845, 789 P.2d 1026 (lawyer acting as executor of estate); Crawford v. State Bar (1960) 54 Cal.2d 659, 667-668, 7 Cal.Rptr. 746, 355 P.2d 490 (title and brokerage services); Alkow v. State Bar (1971) 3 Cal.3d 924, 92 Cal.Rptr. 278, 479 P.2d 638 (lawyer providing collection services).
Concluding that an appellant had established a prima facie case for professional negligence, inter alia, the court emphasized that a family lawyer had completely failed to research the standard legal materials containing information that was important to her client’s decision with respect to her interest in her husband’s VA pension. The court noted that this research failure may have been a product of the lawyer’s unnecessary rush to conclude the client’s property division, due to the lawyer’s pending law firm merger, which in fact created a conflict of interest problem for the lawyer. Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 41 Cal.Rptr.2d 768.
Violation was sustained where Respondent failed to pay five statutory medical liens, demonstrating reckless disregard for his duty to do so. The duty of competence is not limited to clients, and the duty extends to all lien holders, inherent in the lawyer’s role as fiduciary with respect to entrusted funds. In the Matter of Riley (Review Dept. 1994) 3 Cal. State Bar Ct. Rptr. 91.
CRPC 3-110(C), Lack of Ability
A lawyer is not excused from the duty to perform competently due to overextended workload and scheduling problems; if the lawyer is too busy to devote proper time and attention to the client’s case, the lawyer does not have the resources to perform and his continued acceptance of employment violates this Rule. Blair v. State Bar (1989) 49 Cal.3d 762, 780, 263 Cal.Rptr. 641, 781 P.2d 933; Garlow v. State Bar (1988) 44 Cal.3d 689, 711, 244 Cal.Rptr. 452, 749 P.2d 1307. Under such circumstances the lawyer should decline representation. In the Matter of Bach (Review Dept. 1991) 1 Cal. State Bar. Ct. Rptr. 631; In the Matter of Collins (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 1, 12-13 (violation found when lawyer took on more cases than he could handle as a sole practitioner, had many cases requiring court appearances away from the office, had office management problems, and yet continued to accept new clients).
Acute depression or other psychological problems can explain and mitigate, but not excuse, violation of this rule. The State Bar court will consider misconduct “willful” when the lawyer knew, or should have known, that a mental, emotional or physical disability would affect his or her competent representation: Silva-Vidor v. State Bar (1989) 49 Cal.3d 1071, 1074-1075, 264 Cal.Rptr. 439, 782 P.2d 680 (severe psychological, physical and financial difficulties); Frazer v. State Bar (1987) 43 Cal.3d 564, 577-578, 238 Cal.Rptr. 54, 737 P.2d 1338 (periodic agoraphobia); Tenner v. State Bar (1980) 28 Cal.3d 202, 168 Cal.Rptr. 333, 617 P.2d 486 (alcoholism); Doyle v. State Bar (1976) 15 Cal.3d 973, 126 Cal.Rptr. 801, 544 P.2d 937 (polio); Bradpiece v. State Bar (1974) 10 Cal.3d 742, 111 Cal.Rptr. 905, 518 P.2d 337 (financial and domestic difficulties).
CRPC 3-400 (client may not waive a member’s duty to act competently, whether resulting from a conflict of interest or other reason); CRPC 3-500 (failure to communicate with client); CRPC 3-700 (effectuating withdrawal from a case).
Standard 2.4(a), Standards for Attorney Sanctions for Professional Misconduct.
1.1:300 Malpractice Liability
A lawyer may commit actionable malpractice by rendering negligent services. See Younan v. Caruso (2nd Dist. 1996) 51 Cal.App.4th 401, 408, 59 Cal.Rptr.2d 103. It is also actionable malpractice for an attorney to breach the ethical duties of good faith and fidelity. See T&R Foods, Inc. v. Rose (Cal. Super. 1996) 47 Cal.App.4th Supp. 1, 56 Cal.Rptr.2d 41, 45 (failure to segregate client funds constitutes breach of fiduciary duty).
In addition, a plaintiff can premise a malpractice action on an intentional tort theory or a breach of contract theory. See McDaniel v. Gile (2nd Dist. 1991) 230 Cal.App.3d 363, 373, 375, 281 Cal.Rptr. 242 (allegation that attorney abandoned plaintiff-client after she refused to have sexual relations with attorney supported causes of action for intentional infliction of emotional distress and legal malpractice).
[See also 1.1:330 Standard of Care, infra; 1.1:340 Causation and Damages, infra; 1.1:380 Liability to Client for Breach of Contract, Breach of Fiduciary Duty, and Other Liabilities, infra; 1.1:410 Duty of Care to Certain Non-Clients, infra].
In order to prove that an attorney has committed professional negligence, a plaintiff must establish: “(1) breach of the attorney’s duty to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a proximate causal connection between the negligent conduct and the resulting injury; and (3) actual loss or damage resulting from the negligence.” Thompson v. Halvonik (1st Dist. 1995) 36 Cal.App.4th 657, 661, 43 Cal.Rptr.2d 142.
No liability will attach “for lack of knowledge as to the true state of the law where a doubtful or debatable point is involved” if the attorney adequately researches the area of unsettled law. Davis v. Damrell (1st Dist. 1981), 119 Cal.App.3d at 883, 174 Cal.Rptr. at 257. See also Smith v. Lewis (1975) 13 Cal.3d 349, 358-359, 118 Cal.Rptr. 621, 530 P.2d 589 overruled on other grounds by In re Marriage of Brown (1976) 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561. The controlling test invokes a two-pronged inquiry: (1) whether the state of the law was unsettled at the time the professional advice was rendered; and (2) whether that advice was based on the exercise of an informed judgment. See Davis v. Damrell (1st Dist. 1981) 119 Cal.App.3d 883, 174 Cal.Rptr. 257. If the area of law was unsettled, and the attorney made an informed judgment, he will not be held liable for malpractice, even if his advice ultimately proves to be wrong. See Davis v. Damrell (1st Dist. 1981) 119 Cal.App.3d 883, 174 Cal.Rptr. 257.
In order to hold an attorney liable for breach of fiduciary duty, a plaintiff must show: “(1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 1086, 41 Cal.Rptr.2d 768.
The CRPC, like the Model Rules and DR, are not “intended to create new civil causes of action.” CRPC 1-100(A). However, California’s ethics code is admissible as evidence of the standard of care in malpractice lawsuits. See Mirabito v. Liccardo (1st Dist. 1992) 4 Cal.App.4th 41, 45, 5 Cal.Rptr.2d 571 (CRPC along with other statutes and general principles relating to other fiduciary relations help define an attorney’s fiduciary duty; jury instructions may be patterned on CRPC). California, unlike other states, does not view violations of the ethics code as negligence per se. [See 1.1:300 Malpractice Liability, supra; 1.1:380 Liability to Client for Breach of Contract, Breach of Fiduciary Duty, and Other Liabilities, infra]
The following comments are taken from Karpman & Margolis pages 5-6 with certain conforming changes:
Effect of A.B.A. Model Rules in California
Conduct of California lawyers is governed by the CRPC and not by the A.B.A. Rules. However, A.B.A. Rules can be looked to for guidance. People v. Ballard (4th Dist. 1980) 104 Cal.App.3d 757, 761, 164 Cal.Rptr. 81 and C.O.P.R.A.C. Op. 1983-71.
The A.B.A. Code may reflect public policy in those areas where California courts have not spoken. Altschul v. Sayble (2nd Dist. 1978) 83 Cal.App.3d 153, 147 Cal.Rptr. 716.
Effect of CRPC in Civil Proceedings
Noble v. Sears, Roebuck & Co. (2nd Dist. 1973) 33 Cal.App.3d 654, 109 Cal.Rptr. 269 and Wilhelm v. Pray, Price, Williams & Russell (2nd Dist. 1986) 186 Cal.App.3d 1324, 231 Cal.Rptr. 355 hold there is no independent civil cause of action for the breach of a disciplinary rule. However, in Mirabito v. Liccardo (1st Dist. 1992) 4 Cal.App.4th 41, 5 Cal.Rptr.2d 571, the Court held that the CRPC, together with statutes and general principles relating to other fiduciary relationships, all help define the fiduciary “duty” a lawyer owes to his or her client. See also Younger v. Solomon (5th Dist. 1974) 38 Cal.App.3d 289, 113 Cal.Rptr. 113, in which the court discussed the subject of improper disclosure of the existence of State Bar disciplinary proceedings in a civil tort action against a lawyer.
Effect of CRPC in Criminal Proceedings
A violation of the CRPC cannot be used to prove that a defendant lawyer possessed specific criminal intent, since a violation of the rules can occur without any criminal intent. People v. Stein (5th Dist. 1979) 94 Cal.App.3d 235, 156 Cal.Rptr. 299.
A lawyer has the duty to provide competent legal services under CRPC 3-110. [See also 1.1:200 Disciplinary Standard of Competence, supra]. A lawyer owes a client “the duty to exercise care [in accordance with the appropriate standard] in pursuing the client’s lawful objectives in matters covered by the representation and in fulfilling the fiduciary duties [owed to clients generally].” Restatement LGL § 72. One recent California appellate court described the duty as a “. . . wider obligation to exercise due care to protect a client’s best interests in all ethical ways and in all circumstances.” T&R Foods, Inc. v. Rose (Cal. Super. 1996) 47 Cal.App.4th Supp. 1, 9, 56 Cal.Rptr.2d 41, 45 (lawyer has duty to segregate client funds).
The duty to provide competent representation includes the duty to refer the client to a specialist where reasonably necessary. See Horne v. Peckam (3rd Dist. 1979) 97 Cal.App.3d 404, 414-415, 158 Cal.Rptr. 714 (malpractice liability resulting from non-tax attorney taking on the client’s tax matter instead of referring the client to a specialist); see also Center Foundation v. Chicago Insurance Co. (2nd Dist. 1991) 227 Cal.App.3d 547, 557, fn. 7, 278 Cal.Rptr. 13 (practicing in an unfamiliar area without the assistance of a specialist may constitute malpractice).
CRPC 3-120 regulates sexual relations between lawyers and clients. In general, lawyers must not “[r]equire or demand” sex “incident to or as a condition of any professional representation,” see CRPC 3-120(B)(1), or “[e]mploy coercion, intimidation, or undue influence in entering into sexual relations,” see CRPC 3-120(B)(2), or continue representation if “sexual relations cause the member to perform legal services incompetently in violation of rule 3-110,” see CRPC 3-120(B)(3).
The following comments on CRPC 3-120 Sexual Relations With Client are taken from Karpman & Margolis page 36, with certain conforming changes:
This rule adds disciplinary sanctions to the list of consequences for sexual involvement with a client, when such involvement is coerced, demanded as the “price” for legal services, is the result of undue influence or exploitation of a client’s vulnerability, or adversely affects the lawyer’s competency in handling the case.
Prior to the enactment of this rule, the consequences for the lawyer included only recusal or disqualification for conflict of interest, a civil action for breach of fiduciary duty, legal malpractice or other torts or reversal of the criminal or civil judgment. Barbara A. v. John G. (1st Dist. 1983) 145 Cal.App.3d 369, 193 Cal.Rptr. 422; McDaniel v. Gile (2nd Dist. 1991) 230 Cal.App.3d 363, 281 Cal.Rptr. 242.
C.O.P.R.A.C. Op. 1987-92 (ethical considerations of a lawyer engaging in a sexual relationship with a client).
See also B&PC § 6106.9 (holding in relevant part that the type of conduct prohibited by CRPC 3-120 constitutes cause for discipline); McDaniel v. Gile (2nd Dist. 1991) 230 Cal.App.3d 363, 1509, 281 Cal.Rptr. 242 (delaying services, withholding services and providing substandard services as a result of the client’s refusal of sexual advances breached the standard of care).
There are exceptions to B&PC § 6106.9. For instance B&PC § 6106.9(a) is not applicable to sexual relations between attorneys and their spouses or persons in an equivalent domestic relationship or to ongoing consensual relationships that pre-date the attorney-client relationship. B&PC § 6106.9(b). Further, if an attorney in a firm has sexual relations with a client, but does not participate in representing that client, the attorneys in the firm are not subject to B&PC § 6106.9 solely because of the occurrence of those sexual relations. B&PC § 6106.9(c).
Other duties to the client include: the duty to safeguard and segregate client funds and property, [see Rule 1.15 Safekeeping Property, infra], the duty to communicate with the client, [see also Rule 1.4 Communication, infra], the duty of confidentiality, [see Rule 1.6 Confidentiality of Information, infra], fiduciary duties [see 1.1:380 Liability to Client for Breach of Contract, Breach of Fiduciary Duty, and Other Liabilities, infra], and duties which apply in the context of terminating representation, [see Rule 1.16 Declining or Terminating Representation, infra].
The following comments on B&PC § 6068 are taken from Karpman & Margolis pages 168-169, with certain conforming changes:
The duty to honor the secrets and confidences of a client, under subsection (e), also applies to former clients. Only the client can release the lawyer from this duty.
Subsection (i) requires lawyers to respond in some fashion to letters from State Bar investigators. The duty to cooperate does not require a lawyer to waive valid statutory or constitutional privileges by providing information; it does require the lawyer, at a minimum, to assert those privileges to the State Bar, rather than simply ignoring a State Bar investigation. Note that under B&PC § 6079.4 the exercise of 5th Amendment or other constitutional and statutory privileges is not deemed a failure to cooperate with a State Bar investigation.
Subdivision (m) was enacted in 1987. Prior to that time, a lawyer’s failure to communicate was considered a violation of his or her oath and duties to the client under B&PC § 6068(a).
An attorney breaches the standard of care by failing to use “such skill, prudence and diligence as other members of the profession commonly possess and exercise.” Smith v. Lewis (1975) 13 Cal.3d 349, 118 Cal.Rptr. 621, 530 P.2d 589, overruled on other grounds by In re Marriage of Brown (1976) 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561; Thompson v. Halvonik (1st Dist. 1995) 36 Cal.App.4th 657, 661, 43 Cal.Rptr.2d 142; Thomas v. Lusk (1st Dist. 1994) 27 Cal.App.4th 1709, 1716, 34 Cal.Rptr.2d 265 (plaintiff alleged that attorney failed to preserve evidence in a products liability case). See, e.g., People v. Branscombe (1998) 64 Cal.App.4th 807, 72 Cal.Rptr.2d 773; Unigard v. O’Flaherty & Belgum (2nd Dist. 1995) 38 Cal.App.4th 1229, 1239, 45 Cal.Rptr.2d 565 (whether failure to raise an affirmative defense breached the standard of care is a proper jury question); Enriquez v. Smyth (2nd Dist. 1985) 173 Cal.App.3d 691, 697, 219 Cal.Rptr. 267 (valuing the client’s home for purposes of a bankruptcy matter based on limited information and without expertise in real property valuation breached the standard of care); Goebel v. Lauderdale (6th Dist. 1989) 214 Cal.App.3d 1502, 1509, 263 Cal.Rptr. 275 (advising the client to break the law breached the standard of care); Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 1093, 1094-1095, 41 Cal.Rptr.2d 768 (failure to conduct legal research and locate easily discoverable information may have breached the standard of care); McDaniel v. Gile (2nd Dist. 1991) 230 Cal.App.3d 363, 281 Cal.Rptr. 242 (delaying services, withholding services and providing substandard services as a result of the client’s refusal of sexual advances breached the standard of care); Davis v. Damrell (1st Dist. 1981) 119 Cal.App.3d 883, 888, 174 Cal.Rptr. 257 (attorney not liable for advice regarding unsettled area of law that proved to be erroneous).
Courts unanimously agree that expert testimony is admissible in a legal malpractice action. See ABA/BNA § 301:126. Expert testimony may be necessary in a malpractice action to prove that the attorney committed negligence as a matter of law. However, expert testimony is not required when the undisputed facts establish the lawyer’s negligence as a matter of law, as is commonly held when a lawyer fails to file a client’s claim or take other required action within the period of the applicable statute of limitations. Further, expert testimony is not required when the lawyer’s lack of skill, care, or diligence is so clear that a jury could reasonably determine without the aid of expert testimony that the standard has not been met. See Goebel v. Lauderdale (6th Dist. 1989) 214 Cal.App.3d 1505, 263 Cal.Rptr. 275 (expert testimony not required where attorney’s conduct demonstrates total failure to perform even the most perfunctory research); David Welch Co. v. Erskine & Tulley (1st Dist. 1988) 203 Cal.App.3d 884, 250 Cal.Rptr. 339 (expert testimony does not set the standard of care; California Rules of Professional Conduct set standard; where standard is unclear, expert testimony may be used to establish the standard of care and breach of the standard).
Expert testimony has also been used to show an attorney breached her fiduciary duty to her client. See Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 41 Cal.Rptr.2d 768 (expert testimony of legal ethics professor was used by plaintiff to establish that the attorney had a conflict of interest with her client).
As a general rule, a plaintiff must show that the attorney’s malpractice was the proximate cause of an actual harm or loss. The same rules of causation apply whether the malpractice claim is premised on negligence, breach of contract, or breach of fiduciary duty. See, e.g., Thompson v. Halvonik (1st Dist. 1995) 36 Cal.App.4th 657, 661, 43 Cal.Rptr.2d 142 (client failed to establish that attorney’s neglect delayed or lessened client’s recovery); Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 1095, 41 Cal.Rptr.2d 768 (causation burden is satisfied by establishing “`a reasonable basis for the conclusion that it was more likely than not that the conduct of the defendant was a substantial factor in the result”’) (quoting Lysick v. Walcom (1st Dist. 1968) 258 Cal.App.2d 136, 153, 65 Cal.Rptr. 406); Sisco v. Cosgrove, Michelizzi, Schwabacher, Ward & Bianchi (2nd Dist. 1996) 51 Cal.App.4th 1302, 1312, 59 Cal.Rptr.2d 647 (attorneys not liable for loss stemming from structure of settlement agreement since the aspect of the settlement that caused plaintiff’s loss was necessitated by California law).
Ordinarily, the plaintiff bears the burden of proving causation, as in any other tort claim. Thomas v. Lusk (1st Dist. 1994) 27 Cal.App.4th 1709, 1720, 34 Cal.Rptr.2d 265 (improper to shift causation burden to attorney based on mere speculation that attorney’s negligence negatively impacted the client’s case). However, in Galanek v. Hismar (1999) 68 Cal.App.4th 1417, 81 Cal.Rptr.2d 236 the Court of Appeal held that the burden of proof can shift from the plaintiff in a legal malpractice case to the attorney-defendant where the attorney defendant's own negligence deprived the plaintiff of proof of causation (plaintiff lost her products liability case because her attorney did not take sufficient steps to protect the car and it was sold and destroyed, leaving plaintiff unable to meet her burden of proof; held: in the legal malpractice case, the attorney must show her negligence did not lead to client's injury).
To prove damages in a suit against an attorney for negligent prosecution of a claim, a plaintiff must show that “careful management of his claim would have resulted in a favorable judgment and collection of same.” Hinshaw, Winkler, Draa, Marsh & Still v. Superior Court (6th Dist. 1996) 51 Cal.App.4th 233, 239, 58 Cal.Rptr.2d 791; Thomas v. Lusk (1st Dist. 1994) 27 Cal.App.4th 1709, 1716, 34 Cal.Rptr.2d 265. To prove that the claim could have been collected, the plaintiff must prove that the debtor was solvent. See, e.g., DiPalma v. Seldman (2nd Dist. 1994) 27 Cal.App.4th 1499, 1503, 33 Cal.Rptr.2d 219 (collectibility is irrelevant to establishing liability for advising client to enter into property transaction but is relevant to establishing liability for failure to collect judgment corresponding to transaction). See also Arciniega v. Bank of San Bernardino (4th Dist. 1997) 52 Cal.App.4th 2l3, 60 Cal.Rptr.2d 495, 506 (attorneys who are negligent in prosecuting meritorious claims are liable for the value of the claim lost as the “case-within-a-case” doctrine) (since “case-within-a-case” doctrine holds that allegedly negligent attorney becomes a proxy for the original offending defendant, client’s retraxit of malpractice claim against attorney retained in suit against bank barred client’s claim against bank); Younan v. Caruso (2nd Dist. 1996) 51 Cal.App.4th 401, 59 Cal.Rptr. 103 (conviction in criminal proceeding collaterally estops malpractice claim raised in habeas corpus proceedings). A legal malpractice plaintiff may recover only those amounts to which it was actually entitled in the underlying matter. Loube v. Loube (1998) 64 Cal.App.4th 421, 74 Cal.Rptr.2d 906 (when defendant in underlying action defaulted, plaintiff's attorney not liable for failing to state larger demand in complaint unless plaintiff was actually entitled to larger amount).
Emotional distress damages are ordinarily not recoverable in legal malpractice cases. Erlich v. Menezes (1999) 21 Cal.4th 543, 87 Cal.Rptr.2d 886; Camenisch v. Superior Ct. (1996) 44 Cal.App.4th 1689, 52 Cal.Rptr.2d 450; and Merenda v. Superior Ct. (1992) 3 Cal.App.4th _, 4 Cal.Rptr.2d 87.
1.1:350 Waiver of Prospective Liability [see also 1.8:910]
CRPC 3-400(A) prevents an attorney from “prospectively limiting” his liability to the client for professional malpractice. Cf., Nichols v. Keller (5th Dist. 1993) 15 Cal.App.4th 1672, 1684, 19 Cal.Rptr.2d 601 (workers’ compensation attorneys should be able to limit scope of retention to compensation for claim if the client is cautioned that “(1) there may be other remedies which the attorney will not investigate, and (2) other counsel should be consulted on such matters”; even where scope is expressly limited, duty to alert client of all reasonably apparent legal problems may exist). See also C.O.P.R.A.C. Op. 1989-116, p. 4 (an agreement to arbitrate potential malpractice claims does not constitute a limitation of liability). Agreements to arbitrate malpractice claims must be unambiguous and must give the client notice of possible consequences of agreement. Lawrence v. Walzer & Gabrielson (2nd Dist. 1989) 207 Cal.App.3d 1501, 1507, 256 Cal.Rptr. 6.
The following comments on CRPC 3-400 Limiting Liability to Client are taken from Karpman & Margolis pages 60-61 with certain conforming changes:
This rule does not bar a member from settling a claim for professional malpractice with the client, as long as the client is advised in writing to seek independent counsel and is given an opportunity to do so.
The rule does not prohibit a lawyer from reasonably limiting the scope of his or her representation or employment when initially retained. See Nichols v. Keller (5th Dist. 1993) 15 Cal.App.4th 1672, 19 Cal.Rptr.2d 601, 608.
Following the termination of a lawyer-client relationship, the former client threatened to sue for malpractice. The lawyer offered a cash settlement and mutual releases were signed which prevented client from bringing a malpractice action. The court held that this rule did not apply to the release, which was signed after the termination of the lawyer-client relationship. Donnelly v. Ayer (4th Dist. 1986) 183 Cal.App.3d 978, 228 Cal.Rptr. 764.
Threatening a plaintiff with criminal prosecution to obtain an advantage in a civil case in violation of this rule is a sufficient legal basis to state a cause of action for intentional infliction of emotional distress and to seek monetary damages. Kinnamon v. Staitman & Snyder (2nd Dist. 1977) 66 Cal.App.3d 893, 136 Cal.Rptr. 321.
It was not improper for a lawyer to request a written confirmation of his discharge as counsel. This was not an improper release from liability under this rule. In the Matter of Bach (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 631, 639 n.2.
B&PC § 6090.5 (cause for suspension, disbarment or other discipline to require as a condition for settling a claim for professional misconduct that the plaintiff agree to not file a complaint with the State Bar regarding that misconduct).
C.O.P.R.A.C. Op. 1989-116 (not a violation of this rule to include a provision for mandatory binding arbitration of potential malpractice claims in the lawyer-client retainer agreement. Standard arbitration provisions do not detract from or limit a lawyer’s duty to use reasonable care or limit lawyer’s liability for breach of the duty. It merely selects the forum in which liability will be determined).
1.1:360 Settlement of Client's Malpractice Claim [see also 1.8:920]
CRPC 3-400(B) governs the settlement process of client malpractice claims. A lawyer must not settle a claim or potential claim “unless the client is informed in writing that the client may seek the advice of an independent lawyer” and “is given a reasonable opportunity to seek that advice.” CRPC 3-400(B); see, e.g., In the Matter of Lane (Review Dept. 1994) 2 Cal. State Bar Ct. Rptr. 735, 744, 748 (failure to inform client properly). Under B&PC § 6090.5, an attorney may be disciplined for requiring as a condition of settlement of a professional misconduct claim that the plaintiff agree not to file a complaint with the disciplinary agency concerning the misconduct. However, B&PC § 6090.5 has been construed as inapplicable to attempts to require the client to withdraw disciplinary charges as a condition of settlement. See In the Matter of Lane (Review Dept. 1994) 2 Cal. State Bar Ct. Rptr. 735 (once State Bar becomes aware of possible misconduct through a complaint, investigation can proceed without complaining witness; In the Matter of Fonte (Review Dept. 1994) 2 Cal. State Bar Ct. Rptr. 752, 765, fn.10.
When an apparent conflict exists between the attorney’s duty to his client on the one hand and his public obligation on the other, the attorney’s choice to honor the public obligation must be shown to have been so manifestly erroneous that no prudent attorney would have done so. See Kirsch v. Duryea (1978) 21 Cal.3d 303, 309-310, 146 Cal.Rptr. 218, 578 P.2d 935 (attorney’s failure to advance client’s case did not constitute a manifestly erroneous choice to honor his duty to maintain only meritorious actions); cf., Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1046, 40 Cal.Rptr.2d 744 (denying defense of upholding duty to maintain meritorious actions because triable issue existed as to whether attorney’s failure to raise claim was reasonable).
Under California’s comparative negligence doctrine, the client’s contributory negligence is not a complete defense to a negligence action. See Blain v. Doctor’s Co. (3rd Dist. 1990) 222 Cal.App.3d 1048, 1063, 272 Cal.Rptr. 250 (“unclean hands” doctrine bars client from recovering damages by blaming attorney for client's decision to lie under oath).
Civ. Proc. Code § 340.6 states that “an action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful acts or omission, or four years from the date of the wrongful act or omission, whichever occurs first.” This statute encompasses claims against attorneys for breach of fiduciary duty. Stoll v. Superior Court (1992) 9 Cal.App.4th 1362, 12 Cal.Rptr.2d 354. But the statute does not govern non-legal services provided by an attorney unless legal and non-legal work is inextricably intertwined. Quintillani v. Mannerino (1998) 62 Cal.App.4th 54, 72 Cal.Rptr.2d 359.
In disciplinary proceedings, “emotional or psychological difficulties and attempted rehabilitation therefrom” may provide grounds for mitigation, but may not provide grounds for complete immunization from liability. See Snyder v. State Bar (1976) 18 Cal.3d 286, 133 Cal.Rptr. 864, 555 P.2d 1104; Phillips v. State Bar (1989) 14 Cal.3d 492, 121 Cal.Rptr. 605, 535 P.2d 733 (mental disorders may serve as mitigation in disciplinary proceedings only if an attorney establishes through clear and convincing evidence that he no longer suffers from the disorder).
Where an attorney contracts to provide service, proof of breach of ethical and other fiduciary duties may constitute breach of contract. Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 1092 fn.7, 41 Cal.Rptr.2d 768.
A lawyer has a fiduciary duty to act in the client’s best interests. T&R Foods, Inc. v. Rose (Cal. Super. 1996) 47 Cal.App.4th Supp. 1, 56 Cal.Rptr.2d 41, 45; [see also Rule 1.7 Conflict of Interest: General Rule, infra]. A formal agreement is not required to create the fiduciary relationship between lawyer and client. In re Marriage of Zimmerman (1st. Dist. 1993) 16 Cal.App.4th 556, 564 fn.2, 20 Cal.Rptr.2d 132; Beery v. State Bar (1987) 43 Cal.3d 802, 239 Cal.Rptr. 121, 739 P.2d 1289 (“when a party seeking legal advice consults an attorney at law and secures that advice, the relation of attorney and client is established prima facie”). The attorney’s duty of undivided loyalty to the client is an integral aspect of the fiduciary relationship. See Flatt v. Superior Court (1994) 9 Cal.4th 275, 285, 36 Cal.Rptr.2d 537, 885 P.2d 950.
To hold an attorney liable for breach of fiduciary duty a plaintiff must show: “(1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” See, e.g., Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 1086, 41 Cal.Rptr.2d 768 (concealing from the client a commitment to join forces with opposing counsel violates the duty of loyalty); T&R Foods, Inc. v. Rose (Cal. Super. 1996) 47 Cal.App.4th Supp. 1, 56 Cal.Rptr.2d 41, 45 (attorney breached fiduciary duty by failing to segregate client funds); In the Matter of Harney (Review Dept. 1995) 3 Cal. State Bar Ct. Rptr. 266, 284 (attorney’s fee collection which exceeded statutory limits breached duty of good faith and fair dealing). See also Mosier v. Southern California Physicians Ins. Exchange (1998), 63 Cal.App.4th 1022, 74 Cal.Rptr.2d 550 (failure to disclose conflict of interest can be breach of fiduciary duty); Mirabito v. Liccardo (1st Dist. 1992) 4 Cal.App.4th 41, 45, 5 Cal.Rptr.2d 571 (CRPC along with other statutes and general principles relating to other fiduciary relations help define an attorney’s fiduciary duty); Stanley v. Richmond (1st Dist. 1995) 35 Cal.App.4th 1070, 1086, 41 Cal.Rptr.2d 768 (expert testimony is admissible to establish the duty and breach elements of a cause of action for breach of fiduciary duty where the attorney’s conduct is beyond common knowledge).
Attorney liability for the following acts is discussed below: (1) conversion, (2) conspiracy, (3) certain federal law violations, (4) breach of contract, and (5) fraud. [see also 1.1:410 Duty of Care to Certain Non-Clients, infra; 1.1:430 Assisting Unlawful Conduct, infra; 1.1:510 Advocate’s Defamation Privilege, infra].
For cases dealing with a lawyer’s liability for converting a third party’s funds, see Kaiser Foundation Health Plan, Inc. v. Aguiluz (1st Dist. 1996) 47 Cal.App.4th 302, 305, 307, 54 Cal.Rptr.2d 665 (“[W]here one receives money as an agent, to which his principal has no right, and where he receives notice not to pay to his principal prior to disbursement of the funds, an action for money had and received lies against such party”); see also Miller v. Rau (2nd Dist. 1963) 216 Cal.App.2d 68, 76, 30 Cal.Rptr. 612 (attorney liable for conversion after distributing funds to client when he had knowledge of third party’s interest in funds prior to disbursement); Brian v. Christensen (4th Dist. 1973) 35 Cal.App.3d 377, 381-382, 110 Cal.Rptr. 688 (attorney prosecuting action on behalf of Medi-Cal benefits recipient, who agreed to reimburse Department of Health Care Services for benefits should she collect damages from a third party, did not have duty to notify Department of Health Care Services of recipient’s suit for damages).
For cases dealing with an attorney’s liability for conspiring with and/or on behalf of the client, see Doctor’s Co. v. Superior Court (1989) 49 Cal.3d 39, 48-49, 260 Cal.Rptr. 183, 775 P.2d 508 (attorneys cannot be liable for conspiring to violate a duty binding upon the client alone; attorneys not liable for conspiring to violate client’s duty to plaintiff where attorneys acted solely as client’s agents and did not share client’s duty); Skarbrevik v. Cohen, England & Whitfield (2nd Dist. 1991) 231 Cal.App.3d 692, 707-708, 711, 282 Cal.Rptr. 627 (corporate counsel not liable to minority shareholder for conspiracy to conceal, even though jury could infer that counsel knowingly participated in majority shareholders’ fraudulent concealment, because corporate counsel did not owe minority shareholder a duty to disclose, nor did he have a financial interest in matter); Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (2nd Dist. 1976) 57 Cal.App.3d 104, 109, 128 Cal.Rptr. 901 (attorneys may not conspire with the client to defraud or injure a third person or engage in intentional tortious conduct toward a third person). See also Moore v. Brewster (9th Cir. 1996) 96 F.3d 1240, 1245 (insufficient evidence to support claim that opposing counsel conspired with judge, law clerk and court clerk to deprive plaintiff of judgment proceeds); Schick v. Bach (2nd Dist. 1987) 193 Cal.App.3d 1321, 1328, 238 Cal.Rptr. 902 (conclusory allegation that attorney conspired with client/psychologist to harm plaintiff (client’s patient) did not state valid cause of action); Civ. Code § 1714.10 (requirements for certain civil causes of action against an attorney for conspiring with his or her client in a complaint or other pleading).
(3) Federal Law Violations
On a lawyer’s liability for violation of federal law, see Tillamook Cheese & Dairy Assoc. v. Tillamook County Creamery Assoc. (9th Cir. 1966) 358 F.2d 115, 118 (corporate counsel cannot be held liable for corporation’s Sherman Act violation for actions taken in performance solely as corporate legal advisor; however, participating in corporation’s policy decision making process subjects corporate counsel to liability); Amarel v. Connell (9th Cir. 1996) 102 F.3d 1494, 1522-1523 (insufficient evidence that attorney masterminded and perpetrated clients’ conspiracy to monopolize and restrain trade in violation of Sherman Act); Baumer v. Pachl (9th Cir. 1993) 8 F.3d 1341, 1346-1347 (bare allegations that attorney conspired to violate RICO were insufficient to state valid cause of action); Ikuno v. Yip (9th Cir. 1990) 912 F.2d 306, 309 (whether attorney filed falsified reports on behalf of client in violation of RICO was a proper question for trial court).
(4) Breach of Contract
On a lawyer’s liability for breach of contract, see Westinghouse Electric Corp. v. Newman & Holtzinger, P.C. (2nd Dist. 1995) 39 Cal.App.4th 1194, 1207, 46 Cal.Rptr.2d 151 (exposing counsel to contract liability based on parties’ discovery agreement in underlying litigation would divest trial court of power to regulate discovery); Pollock v. Superior Court (4th Dist. 1991) 229 Cal.App.3d 26, 29, 279 Cal.Rptr. 634 (disallowing attorney’s contract and fraud claims against opposing counsel for failing to advise court in underlying action; allowing attorneys to be sued for omissions or representations made as officers of the court during litigation is contrary to public policy as reflected by Civ. Code § 47(b)); LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 344, 348, 60 Cal.Rptr.2d 539 (lender’s attorney owed borrower’s attorney a general duty to refrain from intentionally tortious conduct; borrower’s attorney, who held contractual lien on borrower’s recovery, stated valid cause of action for intentional interference with contractual relations against lender’s attorney based on his conduct in representing lender’s security interest in borrower’s recovery).
On a lawyer’s liability for inducing the client to breach a contract, see Los Angeles Airways, Inc. v. Davis (9th Cir. 1982) 687 F.2d 321 (“manager’s privilege” allows an attorney to induce the client to breach a contract provided that the attorney is at least partially motivated by a desire to aid the client); Schick v. Bach (2nd Dist. 1987) 193 Cal.App.3d 1321, 1329, 238 Cal.Rptr. 902 (“absent extraordinary circumstances, an attorney may not be held liable for urging a client to breach a contract with some third party”; attorney not liable for inducing breach of contract for advising psychologist/client that information from patient’s therapy sessions could be disclosed legally).
For cases discussing a lawyer’s liability for fraud, see Goodman v. Kennedy (1976) 18 Cal.3d 335, 346, 134 Cal.Rptr. 375, 556 P.2d 737 (acting in the capacity of attorney does not excuse attorney from liability for committing actual fraud; since attorney did not owe purchasers of clients’ stock a duty to disclose, attorney not liable to purchasers for fraudulent omission); LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 336-338, 60 Cal.Rptr.2d 539 (attorney representing lender not liable to attorney representing borrower for fraud based on failure to disclose intention to assert superiority of lender’s lien over attorney for borrower’s lien on borrower’s recovery because lender’s attorney had no duty to disclose; attorney-client relationship between lender and its attorney negated duty to disclose); Wasmann v. Seidenberg (4th Dist. 1988) 202 Cal.App.3d 752, 755, 757, 248 Cal.Rptr. 744 (allegations that wife’s attorney breached fiduciary duty owed to husband as an escrow holder by allowing and failing to disclose wife’s violation of settlement agreement stated valid cause of action against attorney for constructive fraud); MacCharles v. Bilson (2nd Dist. 1986) 186 Cal.App.3d 954, 957, 231 Cal.Rptr. 155 (disallowing fraud and negligent misrepresentation claims against opposing counsel in underlying action based on opposing counsel’s intention to offer false defense because of a lack of compensable damages).
1.1:400 Liability to Certain Non-Clients
The general rule is that absent special circumstances, an attorney will not be held liable for malpractice to third parties. Norton v. Hines (2nd Dist. 1975) 49 Cal.App.3d 917, 123 Cal.Rptr. 237 (plaintiff’s suit against adversary’s attorney for professional negligence (not malicious prosecution) for bringing an unsuccessful breach of contract claim against him failed). An attorney owes no duty of care to an adversary. Baum v. Duckor, Spradling & Metzger (1999) 72 Cal.App.4th 54, 84 Cal.Rptr.2d 703. Likewise, legal malpractice claims are not assignable. Id.
In order for an attorney to be liable to a third party for malpractice, it must first be established that the attorney owed the third party a duty of care. Recent California cases have found that an attorney owes a duty of care and can be held liable to third parties whom the client intended to benefit from the attorney’s rendition of legal services. Lucas v. Hamm (1961) 56 Cal.2d 583, 15 Cal.Rptr. 821, 364 P.2d 685 (plaintiffs, the beneficiaries under a will, could sue attorney who had been engaged by the testator to draft the will); Heyer v. Flaig (1969) 70 Cal.2d 223, 228, 74 Cal.Rptr. 225, 449 P.2d 161. Liability in such cases is premised on the theory that an attorney who undertakes to fulfill the testamentary instructions of a client in actuality assumes a relationship not only with the client, but with the client’s intended beneficiaries. Heyer v. Flaig (1969) 70 Cal.2d 223, 228, 74 Cal.Rptr. 225, 449 P.2d 161. Similarly, an attorney representing a trustee “assumes a relationship with the beneficiary akin to that between trustee and beneficiary.” Morales v. Field, DeGoff, Huppert & MacGowan (1st Dist. 1979) 99 Cal.App.3d 307, 316, 160 Cal.Rptr. 239.
Attorneys also have been held liable to third parties for their negligence in other transactions which were intended to directly benefit the third party. See Donald v. Garry (2nd Dist. 1971) 19 Cal.App.3d 769, 97 Cal.Rptr. 191 (attorney hired by collection agency who failed to file suit on a debt held liable to creditor who had assigned the debt for collection); Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (2nd Dist. 1976) 57 Cal.App.3d 104, 128 Cal.Rptr. 901 (law firm held liable to a third party lender for negligent misrepresentation in furnishing a letter with incorrect and misleading information to its client, knowing that the letter would be shown to prospective lenders in order to get a loan). In each of these cases, the third party was expressly intended to receive the benefit of the attorney’s work or advice. Imposition of a duty of care to a third party was both reasonable and expected. See Skarbrevik v. Cohen, England & Whitfield (2nd Dist. 1991) 231 Cal.App.3d 692, 282 Cal.Rptr. 627.
However, courts have not expanded an attorney’s liability for negligence (as distinct from intentional wrongdoing) to third parties that were not intended to benefit from the attorney’s services. “An attorney generally will not be held liable to a third person not in privity of contract with him since he owes no duty to anyone other than his client. The question of whether an attorney may, under certain circumstances, owe a duty to some third party is essentially one of law and, as such, involves a `judicial weighing of the policy considerations for and against the imposition of liability under the circumstances.”’ Skarbrevik v. Cohen, England & Whitfield (2nd Dist. 1991) 231 Cal.App.3d 692, 282 Cal.Rptr. 627 (corporation’s attorney owed a duty to corporation itself, not to individual stockholders of corporation). If the third party is someone with whom the attorney is dealing at arm’s length, rather than someone intended to be benefitted by the attorney-client transaction, courts will not find a duty. See Goodman v. Kennedy (1976) 18 Cal.3d 335, 134 Cal.Rptr. 375, 556 P.2d 737 (attorney who negligently advised his clients regarding requirement of registering corporation’s stock was not held to have a duty of care to purchasers of the stock because purchasers were not intended beneficiaries of the attorney’s advice). Similarly, an attorney does not have a duty to protect the interests of an adverse party. See Fox v. Pollack (1st Dist. 1986) 181 Cal.App.3d 954, 961, 226 Cal.Rptr. 532 (attorney who represented party in a real estate deal did not owe a duty to parties on other side of real estate transaction).
The California Supreme Court pioneered the abandonment of the privity-of-contract requirement and held that a lawyer owes a duty of care to non-clients in a number of situations. In Biakanja v. Irving (1958) 49 Cal.2d 647, 320 P.2d 16, the court applied a balancing-of-factors approach in holding that a notary public was liable to the intended beneficiary of a will when the instrument was denied probate because it lacked proper attestation. This approach was extended to lawyers in Lucas v. Hamm (1961) 56 Cal.2d 583, 15 Cal.Rptr. 821, 364 P.2d 685, in which a will provision was invalidated because the lawyer failed to anticipate a remote possibility under the rule against perpetuities.
The Court created the “balancing of factors” test, which examines the relevant factors in determining whether a lawyer may be held liable for malpractice to a third party based on assistance given to a client: “[(1)] the extent to which the transaction was intended to affect the plaintiff, [(2)] the foreseeability of harm to him, [(3)] the degree of certainty that the plaintiff suffered injury, [(4)] the closeness of the connection between the defendant’s conduct and the injury, [(5)] the policy of preventing future harm and (6) whether recognizing liability `would impose an undue burden on the profession’.” Lucas v. Hamm (1961) 56 Cal.2d 583, 588-589, 15 Cal.Rptr. 821, 364 P.2d 685 (lack of privity between attorney and intended beneficiaries of invalid will prepared by attorney did not preclude intended beneficiaries from suing attorney for negligence); Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1044-1045, 40 Cal.Rptr.2d 744. Some courts list the “moral blame attached to the defendant’s conduct” as a factor in determining whether to extend liability. See, e.g., Goodman v. Kennedy (1976) 18 Cal.3d 335, 343, 134 Cal.Rptr. 375, 556 P.2d 737; Johnson v. Superior Court (4th Dist. 1995) 38 Cal.App.4th 463, 471, 45 Cal.Rptr.2d 312. However, courts rarely discuss this factor.
It is often difficult for plaintiffs to prove that the challenged transaction was intended to affect them. See, e.g., Radovich v. Locke-Paddon (6th Dist. 1995) 35 Cal.App.4th 946, 964, 41 Cal.Rptr.2d 573, (attorney did not owe proposed beneficiary of client’s unsigned will a duty of care in handling client’s will where there was no evidence indicating client’s commitment to benefit proposed beneficiary); Johnson v. Superior Court (4th Dist. 1995) 38 Cal.App.4th 463, 472, 45 Cal.Rptr.2d 312 (general partnership’s attorney did not owe limited partners a duty of care under Lucas as it was not general partnership’s intention to benefit limited partners “via the advice and services” solicited from attorney); Burger v. Pond (4th Dist. 1990) 224 Cal.App.3d 597, 605-606, 273 Cal.Rptr. 709 (attorney representing husband in divorce matter not liable to husband’s then fiance because husband did not intend to benefit her through attorney’s representation; irrelevant whether attorney knew husband intended to marry plaintiff); Mason v. Levy and Van Bourg (4th Dist. 1978) 77 Cal.App.3d 60, 67-68, 143 Cal.Rptr. 389 (attorneys who agreed to split fee recovery with client’s original attorney did not owe original attorney a duty of care in prosecuting client’s case because client did not have intention to benefit original attorney in instituting suit or in change of attorneys); De Luca v. Whatley (2nd Dist. 1974) 42 Cal.App.3d 574, 576, 117 Cal.Rptr. 63 (criminal defense attorney’s client is his only intended beneficiary and he did not owe defense witness a duty of care to guard against witness’ self incrimination).
For more on a lawyer’s professional negligence liability to non-privity parties, see Goodman v. Kennedy (1976) 18 Cal.3d 335, 344, 134 Cal.Rptr. 375, 556 P.2d 737 (allowing parties with whom the client deals with at arm’s length to hold an attorney liable for confidential advice given to the client “would inject undesirable self-protective reservations into the attorney’s counselling role.”); LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 348-349, 60 Cal.Rptr.2d 539 (attorney for lender does not have a duty to attorney for borrower for borrower attorney’s interest in borrower’s recovery because there was no nexus between lender attorney’s conduct and injury to borrower’s attorney); Burger v. Pond (4th Dist. 1990) 224 Cal.App.3d 597, 605-606, 273 Cal.Rptr. 709 (duty of loyalty owed to client in divorce matter dictates that attorney consider client’s interests to the exclusion of client’s fiance’s interests; extending liability to client’s fiance’ would cause undue burden on profession and diminution of quality of services provided to client).
As a corollary to Lucas, when making a representation or issuing an opinion with the intent that it will be relied upon by a third party in dealing with the client, an attorney must exercise due care. [See 1.1:420 Reliance on Lawyer’s Opinion, infra].
In Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1042-1043, 40 Cal.Rptr.2d 744, the non-client was considered to be in privity with an attorney via privity with the client, allowing the non-client to hold the attorney liable without relying on the Lucas factors. In Meighan, a client and his wife sought the advice of an attorney regarding the client’s personal injury claim and the wife sued the attorney claiming he breached his duty to advise her of a claim for loss of consortium. Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1042-1043, 40 Cal.Rptr.2d 744. The court held that the attorney owed both the client and his wife a duty to advise of the loss of consortium claim. Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1042-1043, 40 Cal.Rptr.2d 744. The court reasoned that because the couple had a community property interest in both the loss of consortium and personal injury claims, their claims were “so closely interwoven with the personal injury action,” that the couple was in privity with respect to it. Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1042-1043, 40 Cal.Rptr.2d 744. The court analyzed the facts under the Lucas factors and reached the same result. Meighan v. Shore (2nd Dist. 1995) 34 Cal.App.4th 1025, 1042-1043, 40 Cal.Rptr.2d 744.
In contrast to attorneys, an auditor’s general negligence liability for an audit of its client is confined to parties in privity with the auditor, i.e. the client; however, specific beneficiaries of the audit report, known to the auditor and for whose benefit the auditor renders the report, may recover under a negligent misrepresentation theory. See Bily v. Arthur Young and Co. (1992) 3 Cal.4th 370, 406-407, 11 Cal.Rptr.2d 51, 834 P.2d 745. The Bily court analyzed the accounting profession extensively and recognized that it is foreseeable that non-privity parties may be harmed by an audit report. See Bily v. Arthur Young and Co. (1992) 3 Cal.4th 370, 406-407, 11 Cal.Rptr.2d 51, 834 P.2d 745. Nonetheless, the court limited such parties to recovery only for negligent misrepresentation because to allow recovery for general negligence would create liability out of proportion to:
(1) the fault of the auditor (which is necessarily secondary and may be based on complex differences of professional opinion); and (2) the connection between the auditor’s conduct and the third party’s injury (which will often be attenuated by unrelated business factors that underlie investment and credit decisions).
Bily v. Arthur Young and Co. (1992) 3 Cal.4th 370, 406-407, 11 Cal.Rptr.2d 51, 834 P.2d 745. See also Soderberg v. McKinney (2nd Dist. 1996) 44 Cal.App.4th 1760, 1768-1769, 52 Cal.Rptr.2d 635 (following Bily in holding that real estate appraisers may be liable for negligent misrepresentation to specific beneficiaries of an appraisal report; however, such liability may be precluded if size of investment made in reliance of report is materially greater than appraiser expected); cf., Biakanja v. Irving (1958) 49 Cal.2d 647, 650-651, 320 P.2d 16 (allowing intended beneficiaries of will to hold notary liable under general negligence theory).
Legal malpractice claims are not assignable. Baum v. Duckor, Spradling & Metzger (1999) 72 Cal.App.4th 54, 84 Cal.Rptr.2d 703.
1.1:420 Reliance on Lawyer's Opinion [see also 2.3:300]
When making a representation or issuing an opinion with the intent that it will be relied upon by a third party dealing with the client, an attorney must exercise due care. See Goodman v. Kennedy (1976) 18 Cal.3d 335, 344, fn.4, 134 Cal.Rptr. 375, 556 P.2d 737; see, e.g., Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (2nd Dist. 1976) 57 Cal.App.3d 104, 111, 128 Cal.Rptr. 901 (law firm owed plaintiff a duty of care in issuing opinion to client where it knew that client would use opinion to attempt to secure loan from plaintiff); Courtney v. Waring (4th Dist. 1987) 191 Cal.App.3d 1434, 1444, 237 Cal.Rptr. 233 (client’s investors may bring negligence claim against attorneys who allegedly prepared false and misleading prospectus designed to induce them to invest); Home Budget Loans, Inc. v. Jacoby & Meyers (2nd Dist. 1989) 207 Cal.App.3d 1277, 1284, 255 Cal.Rptr. 483 (broker may bring claims for intentional and negligent misrepresentation against attorney who allegedly made false representation to broker in order to induce him to arrange loan for client); Employers Insurance of Wausau v. Musick Peeler & Garrett (S.D. Cal. 1994) 871 F.Supp. 381, 388 (attorneys who allegedly drafted prospectus containing material omissions and misrepresentations may be liable to investors for negligent misrepresentations). However, where the attorney’s advice is not communicated to the plaintiff, they cannot claim reliance on the attorney’s advice. See Goodman v. Kennedy (1976) 18 Cal.3d 335, 344, fn.4, 134 Cal.Rptr. 375, 556 P.2d 737 (to allow parties who deal at arm’s length with client to hold an attorney liable for confidential advice given to the client “would inject undesirable self-protective reservations into the attorney’s counselling role.”)
1.1:430 Assisting Unlawful Conduct [see also 1.2:600-1.2:630]
Under B&PC § 6068(a), an attorney must obey and cannot advise clients to break federal or California law. See, e.g., Read v. State Bar (1991) 53 Cal.3d 394, 416, 279 Cal.Rptr. 818, 807 P.2d 1047 (attorney disciplined for advising client to commit perjury); In re Young (1989) 49 Cal.3d 257, 265, 261 Cal.Rptr. 59, 776 P.2d 1021 (attorney disciplined for intentionally aiding client to evade arrest); Weir v. State Bar (1979) 23 Cal.3d 564, 569-571, 152 Cal.Rptr. 921, 591 P.2d 19 (attorney disciplined for advising clients to obtain sham marriage to circumvent immigration laws); see also CRPC 3-210 (attorney must not advise client to violate a law unless attorney has good faith belief that law is invalid; attorney may take appropriate steps in good faith to test validity of any law).
1.1:440 Knowledge of Client's Breach of a Fiduciary Duty [see also 1.13:520]
An attorney must be an active participant in order to be held liable for the client’s breach of fiduciary duty; mere knowledge of the client’s breach is insufficient. Pierce v. Lyman (2nd Dist. 1991) 1 Cal.App.4th 1093, 1106, 3 Cal.Rptr.2d 236 (trust beneficiaries may sue trustees’ attorneys for breach of fiduciary duty based on attorneys’ alleged concealment, misrepresentation and self-dealing). Under the duty of confidentiality, see B&PC § 6068(e), disclosing a client’s breach may constitute malpractice. See C.O.P.R.A.C. Op. 1988-96, p. 3 (duty of confidentiality prevents attorney representing trustee who breaches fiduciary duty from disclosing breach absent consent; attorney should attempt to cause fiduciary to rectify breach and withdrawal may be necessary); S.D. Op. 1983-10, p. 2 (duty of confidentiality prevents attorney representing fiduciary who fails to perform duties from disclosing information likely to be detrimental to client; attorney should urge client to remedy breach and withdrawal may be necessary).
The California courts have not recognized a duty on the part of attorneys to warn potential victims of harm from their clients. However, the subject of attorney warnings is dealt with in CRPC 5-120, which prohibits certain extrajudicial statements made by attorneys that have a substantial likelihood of materially prejudicing adjudicative proceedings. [see also 1.1:510 Advocate’s Defamation Privilege, infra]. This provision contains a specific exception that allows attorney to warn where there is a reasonable belief that substantial harm to an individual or the public interest is likely. See CRPC 5-120(B)(6).
In Tarasoff v. Regents of University of California (1976) 17 Cal.3d 425, 431, 131 Cal.Rptr. 14, 551 P.2d 334, if a therapist determines that his or her patient presents a serious danger of violence to another, the therapist must use reasonable care to protect the intended victim from such danger. See also Reisner v. Regents of University of California (2nd Dist. 1995) 31 Cal.App.4th 1195, 1201, 37 Cal.Rptr.2d 518 (physicians who knew or reasonably should have known that patient was likely to get AIDS owed patient’s boyfriend a duty to warn patient of risk of transmission). One of the central bases for the Tarasoff decision was the court’s apparent conclusion that the public’s interest in the effective treatment of mental illness and the rights of patients to privacy were outweighed by the public’s interest in “safety from violent assault.” Tarasoff v. Regents of University of California (1976) 17 Cal.3d 425, 440, 131 Cal.Rptr. 14, 551 P.2d 334.
Arguably, Tarasoff’s public-safety rationale applies in the attorney-client context as well. Following Tarasoff and its progeny, the Washington State Supreme Court held that attorneys “have a duty to warn of true threats to harm a judge made by a client or a third party when the attorney has a reasonable belief that such threats are real.” State of Washington v. Hansen (1993) 122 Wash.2d 712, 721, 862 P.2d 117, 122; see also Hawkins v. King County (Wash. App. 1979) 24 Wash.App. 338, 602 P.2d 361 (duty to disclose information about client to a court considering pretrial release arises where attorney is convinced that client intends to commit crime or inflict injury upon unknowing third persons).
1.1:500 Defenses and Exceptions to Liability
• Primary California References:
CRPC 5-120, Civ. Proc. Code §§ 340,
• Background References: ABA Model Rule 1.1, Other Jurisdictions
• Commentary: ABA/BNA § 301:1001, ALI-LGL §§ 76, 78, Wolfram § 5.6
An attorney will not be held liable for his decision to withdraw from representing a client if he believes the action lacks merit. If an attorney is faced with a conflicting obligation, such as his obligation to respect the legitimate interests of fellow members of the bar, he will not be held liable for malpractice in most circumstances. In order to hold an attorney liable for malpractice, a plaintiff must show that the attorney’s choice of honoring the public obligation was manifestly erroneous. See Kirsch v. Duryea (1978) 21 Cal.3d 303, 309-310, 146 Cal.Rptr. 218, 578 P.2d 935.
Similarly, an attorney will not be held liable for every mistake he or she makes in her practice. The attorney does not insure the accuracy of his or her opinions or the validity of the document drafted for a client. Nor is the attorney liable for a mistake as to a legal question on which well-informed attorneys may entertain reasonable doubt. See Smith v. Lewis (1975) 13 Cal.3d 349, 358-359, 118 Cal.Rptr. 621, 530 P.2d 589. However, before this defense may be asserted successfully, it must be shown that the attorney has met his or her duty to undertake reasonable research in an effort to ascertain relevant legal principles and to make an informed decision as to a course of conduct based on an intelligent undertaking of the problem. See Aloy v. Mash (1985) 38 Cal.3d 413, 418, 212 Cal.Rptr. 162, 696 P.2d 656. If such reasonable research is undertaken, the attorney cannot be held liable for negligence simply because the course of conduct selected is shown to be erroneous by subsequent events. See Davis v. Damrell (1st Dist. 1981) 119 Cal.App.3d 883, 888-889, 174 Cal.Rptr. 257.
This sub-section discusses: (1) the attorney litigation privilege and (2) California’s anti-SLAPP legislation.
(1) The Litigation Privilege
For well over a century, communications with “some relation” to judicial proceedings have been absolutely immune from tort liability by the privilege codified at Civ. Code § 47(b). An attorney’s communications may be absolutely privileged under the litigation privilege of Civ. Code § 47(b)(2) from all tort liability except the tort of malicious prosecution. Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365 (by lessening exposure to subsequent derivative tort actions, the privilege “promotes the effectiveness of judicial proceedings by encouraging attorneys to zealously protect their clients’ interests”); see also Civ. Code § 47 (“A privileged publication or broadcast is one made:... (b) [i]n any...(2) judicial proceeding....”) The privilege prescribed by section 47(b) has been given broad application. It was originally enacted with reference to defamation, but now encompasses any communication, regardless of whether it amounts to a publication. Rosenthal v. Irell & Manella (2nd Dist. 1982) 135 Cal.App.3d 121, 126, 185 Cal.Rptr. 92.
The conduct in question must be communicative in order for the privilege to apply. Rubin v. Green (1993) 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044. The privilege contemplates any kind of communication or communicative act. See, e.g., Rothman v. Jackson (2nd Dist. 1996) 49 Cal.App.4th 1134, 1146, 57 Cal.Rptr.2d 284 (court filed documents, oral statements and letters between counsel are communicative acts); Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365. See also Rubin v. Green (1993) 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044, (since defendant’s alleged conduct of soliciting and making misrepresentations was essentially communicative, the fact that defendant necessarily engaged in “related acts” did not destroy privilege) (although non-communicative conduct of gathering information may not be privileged, privilege may apply to subsequent communication of such information); cf., Kimmel v. Goland (1990) 51 Cal.3d 202, 211, 271 Cal.Rptr. 191, 793 P.2d 524 (privilege inapplicable to noncommunicative conduct of recording conversations); LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 345, 60 Cal.Rptr.2d 539 (although attorney’s conduct of filing notice of lien was communicative, privilege inapplicable since attorney’s overall course of conduct, including creating security interest on behalf of client, was noncommunicative).
The litigation privilege applies to a communication: “(1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365.
Communications within quasi-judicial proceedings are within the privilege’s purview. See Ojavan Investors, Inc. v. California Coastal Com’n. (2nd Dist. 1994) 26 Cal.App.4th 516, 528-529, 32 Cal.Rptr.2d 103 (privilege applied to coastal commission’s cease and desist order); see also Moore v. Conliffe (1994) 7 Cal.4th 634, 648, 29 Cal.Rptr.2d 152, 871 P.2d 204 (privilege may apply in judicial arbitration proceedings and in arbitration proceedings conducted pursuant to a contractual agreement). Courts have also held that communications to an official administrative agency designed to make the agency act may be privileged as well. See, e.g., Passman v. Torkan (2nd Dist. 1995) 34 Cal.App.4th 607, 616, 40 Cal.Rptr.2d 291 (court deemed letter requesting district attorney to bring criminal action privileged); Kim v. Walker (2nd Dist. 1989) 208 Cal.App.3d 375, 383, 256 Cal.Rptr. 223 (privilege applies to attorney’s communications with parole agent); Hunsucker v. Sunnyvale Hilton Inn (6th Dist. 1994) 23 Cal.App.4th 1498, 1502-1503, 28 Cal.Rptr.2d 722 (statements to police regarding potential criminal activity may be privileged); but see Fenelon v. Superior Court (4th Dist. 1990) 223 Cal.App.3d 1476, 1483, 273 Cal.Rptr. 367 (communications to police not made in a quasi-judicial context must be made without malice in order for privilege to apply) (defendant allegedly made false police report which plaintiff sought to use in a civil action.).
Communications made during the course of a proceeding may be privileged whether made in or outside the courtroom. See Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365. As to pre-litigation communications, a number of courts have held that in order for the privilege to apply, a party must have a serious and good faith contemplation of prospective litigation at the time of the subject communications. Edwards v. Centex Real Estate Corp. (1st Dist. 1997) 53 Cal.App.4th 15, 61 Cal.Rptr.2d 518, 532 (privilege inapplicable since at time real estate developer allegedly fraudulently induced homeowners to execute liability release, developer did not intend to sue homeowners nor did developer have good faith apprehension of being sued by homeowners); LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 345, 60 Cal.Rptr.2d 539 (although attorney’s conduct of filing notice of lien resulted in subsequent interpleader action, privilege inapplicable because attorney did not seriously and in good faith contemplate interpleader action at time of conduct); Laffer v. Levinson, Miller, Jacobs & Phillips (2nd Dist. 1995) 34 Cal.App.4th 117, 124, 40 Cal.Rptr.2d 233.
The California Supreme court found the pre-litigation communications of a law firm to be privileged. See Rubin v. Green (1993) 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044. The Rubin court stated that communications relating to an “anticipated” lawsuit may be privileged. Rubin v. Green (1993) 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044. (italics in original). However, the court stated that litigation must be contemplated seriously and in good faith in order for the privilege to apply to pre-litigation communications. Rubin v. Green (1993) 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044. In Rubin, the law firm allegedly filed suit subsequent to its pre-litigation communications, so the court concluded that these communications met the serious and good faith contemplation test. Rubin v. Green (1993) 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044; Edwards v. Centex Real Estate Corp. (1st Dist. 1997) 53 Cal.App.4th 15, 61 Cal.Rptr.2d 518, 532; see also Knoell v. Petrovich (1999) 76 Cal.App.4th 164, 90 Cal.Rptr.2d 162 (demand letter regarding an easement absolutely privileged because it was directed to an easement dispute and was sent in contemplation of rescission action); Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (2nd Dist. 1996) 47 Cal.App.4th 777, 781-782, 54 Cal.Rptr.2d 830 (privilege applies to law firm’s letter to individuals confirming their endorsement of proposed complaint).
For authority discussing the requirement that the communication be made by a litigant or other participant authorized by law, see LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 344, 348, 60 Cal.Rptr.2d 539 (“stranger” to civil action does not become a litigant or other participant in the action simply by filing a notice of lien on the plaintiff’s recovery); cf., Adams v. Superior Court (6th Dist. 1992) 2 Cal.App.4th 521, 529, 3 Cal.Rptr.2d 49 (privilege protects attorneys’ motions to reconsider in plaintiff’s criminal cases despite possible lack of standing to make motions).
The Silberg court stated that the requirement that the communication be made to achieve the objects of the litigation is “in essence, simply part of the requirement that the communication be connected with, or have some logical relation to, the action.” Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365; Rothman v. Jackson (2nd Dist. 1996) 49 Cal.App.4th 1134, 1146, 57 Cal.Rptr.2d 284. The requirement is not intended as a test of a participant’s “motives, morals, ethics or intent.” Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365; Passman v. Torkan (2nd Dist. 1995) 34 Cal.App.4th 607, 616, 40 Cal.Rptr.2d 291. For examples, see Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365 (privilege applies to attorney’s statements in dissolution proceedings as to neutrality of psychologist who made custody and visitation recommendations in proceedings); Passman v. Torkan (2nd Dist. 1995) 34 Cal.App.4th 607, 616, 40 Cal.Rptr.2d 291 (letter expressing concern that opposing party in corporate dissolution proceeding was misleading court-appointed appraisers had sufficient logical relation to proceeding); Financial Corp. of America v. Wilburn (6th Dist. 1987) 189 Cal.App.3d 764, 776, 234 Cal.Rptr. 653 (allegations in defendant’s complaint may be privileged); cf., Rothman v. Jackson (2nd Dist. 1996) 49 Cal.App.4th 1134, 1146, 57 Cal.Rptr.2d 284 (identity of subject matter between communication and litigation is insufficient; communication must function intrinsically to advance litigant’s case toward court awarded remedy, i.e., document filed with court) (disallowing privilege for attorneys’ statements during press conference); LiMandri v. Judkins (4th Dist. 1997) 52 Cal.App.4th 326, 344, 348, 60 Cal.Rptr.2d 539 (attorney’s act of filing notice of lien on plaintiff’s recovery was not privileged as it was unrelated to the issues in plaintiff’s action); Nguyen v. Proton Technology Corp. (1999) 69 Cal.App.4th 140, 81 Cal.Rptr.2d 392 (letter to former employee's new employer accusing former employee of having a criminal record for assaulting his wife did not have "sufficient connection" to anticipate unfair competition claim to warrant application of privilege); Sacramento Brewing Co., Inc. v. Desmond, Miller & Desmond (1999) 75 Cal.App.4th 1082, 82 Cal.Rptr.2d 760 ("logical relationship" requirement should not be rigidly applied; privilege should be denied only where the statement is so palpably irrelevant to the subject matter of the litigation that no reasonable person can doubt its irrelevancy).
In dictum, the Silberg court stated that communications to non-participants in an action do not generally come within the privilege. Silberg v. Anderson (1990) 50 Cal.3d 205, 214-215, 266 Cal.Rptr. 638, 786 P.2d 365; see also Financial Corp. of America v. Wilburn (6th Dist. 1987) 189 Cal.App.3d 764, 776, 234 Cal.Rptr. 653 (communications to persons in no way connected with the proceeding may not be privileged). However, Civ. Code § 47(d), as amended in 1996, controls with respect to communications to “public journal[s].” That privilege applies to:
a fair and true report in, or a communication to, a public journal of (A) a judicial, (B) legislative, or (C) other public official proceeding or (D) of anything said in the course thereof, or (E) of a verified charge or complaint made by any person to a public official, upon which complaint a warrant has been issued.
Civ. Code § 47(d)(1). See also Civ. Code § 47(d)(2)(A)-(C) (stating that paragraph (d)(1) does not apply to communications that (A) violate CRPC 5-120’s regulation of trial publicity, (B) breach court orders, or (C) violate confidentiality requirements imposed by law); see also Abraham v. Lancaster Community Hospital (2nd Dist. 1990) 217 Cal.App.3d 796, 823, 266 Cal.Rptr. 360 (privilege applies to transmittal of privileged pleadings to the press); see also Rothman v. Jackson (2nd Dist. 1996) 49 Cal.App.4th 1134, 1144, fn.3, 57 Cal.Rptr.2d 284 (statements to press made in anticipation of litigation are not reports or communications of judicial proceedings under Civ. Code § 47(d)(1))
(2) California’s anti-SLAPP legislation
California’s anti-SLAPP (Strategic Lawsuit Against Public Participation) legislation allows a party to defeat a claim arising from “an act of that [party] in furtherance of the [party’s] right of petition or free speech under the United States or California Constitution in connection with a public issue,” (a “Covered Act”) Civ. Proc. Code § 425.16(b). The Legislature declared that:
[T]here has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances....[I]t is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, this section shall be construed broadly.
Civ. Proc. Code § 425.16(a) (underlined portions effective as of January 1, 1998).
Under Civ. Proc. Code § 425.16(e) a Covered Act includes:
(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.
Civ. Proc. Code § 425.16(e) (underlined portions effective as of January 1, 1998).
A party seeking the benefit of Civ. Proc. Code § 425.16 must show that the claim against it arises from a Covered Act under the meaning of the statute. See Wilcox v. Superior Court (2nd Dist. 1994) 27 Cal.App.4th 809, 820, 33 Cal.Rptr.2d 446. However, the case law is unsettled as to what type of conduct constitutes an a Covered Act. A brief summary of the split of authority on this issue follows.
In Zhao v. Wong (1st Dist. 1996) 48 Cal.App.4th 1114, 1127, 1132, 55 Cal.Rptr.2d 909, the court held that the statute only applies to conduct “involving the exercise of a citizen’s rights under the petition clause and related areas protected by the right of freedom of speech.” The court found that plaintiff had made an insufficient showing that statements to a reporter pertaining to a pending will contest were intended to “influence official action.” See Linsco/Private Ledger, Inc. v. Investors Arbitration Services, Inc. (1st Dist. 1996) 50 Cal.App.4th 1633, 1639, 58 Cal.Rptr.2d 613 (non-attorney firm’s conduct of representing investors in arbitration proceedings does not involve exercise of petition rights); Ericsson GE Mobile Communications, Inc. v. C.S.I. Telecommunications Engineers (1st Dist. 1996) 49 Cal.App.4th 1591, 1602, 57 Cal.Rptr.2d 491 (submitting report to county regarding county’s communication system was not a Covered Act since it was submitted primarily to perform contractual obligations to county rather than to address a matter of public concern). See also Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (2nd Dist. 1996) 47 Cal.App.4th 777, 784, 54 Cal.Rptr.2d 830 (sending letters to private individuals seeking support for a petition requesting Attorney General to investigate whether charitable organizations received designated payments was a Covered Act); Matson v. Dvorak (3rd Dist. 1995) 40 Cal.App.4th 539, 548, 46 Cal.Rptr.2d 880 (mailing campaign flyers to voters considered a Covered Act.)
The court in Braun v. Chronicle Publishing Co. (1st Dist. 1997) 52 Cal.App.4th 1036, 1047, 61 Cal.Rptr.2d 58, disagreed with the Zhao court’s reasoning and held that Civ. Proc. Code § 425.16 is not limited to “free speech and petition conduct aimed at advancing self government.” Rather, “at least” with respect to clauses one and two of subdivision (e), all that is required is to satisfy the applicable context or setting requirements. See Braun v. Chronicle Publishing Co. (1st Dist. 1997) 52 Cal.App.4th 1036, 1047-1049, 61 Cal.Rptr.2d 58 (newspaper articles regarding State Auditor’s investigation constituted a statutory “act”); see also Church of Scientology of California v. Wollersheim (2nd Dist. 1996) 42 Cal.App.4th 628, 650, 49 Cal.Rptr.2d 620 (Civ. Proc. Code § 425.16 encompasses activities that involve private persons and entities “especially when a large, powerful organization may impact the lives of many individuals,” i.e. product liability suits and real estate or investment scams) (former church member’s tort action against church was an “act”); Averill v. Superior Court (4th Dist. 1996) 42 Cal.App.4th 1170, 1175, 50 Cal.Rptr.2d 62 (categories of “acts” listed in subdivision (e) are not all-inclusive) (statements made to employer regarding charitable organization were Covered Acts.)
It is difficult to discern how the 1998 amendments to Civ. Proc. Code § 425.16 are intended to effect the meaning of a “Covered Act.” On the one hand, by adding to subdivision (a) the sentence: “[t]o this end, this section shall be construed broadly,” one could argue that the legislature intended to adopt a more expansive view of a Covered Act, perhaps one similar to that espoused by the Braun Court. Bolstering this position is the addition of clause four in subdivision (e), which arguably was meant to expand upon the existing types of Covered Acts under the statute.
However, the language of subdivision (e)(4) seems to construe petition or free speech rights in a manner similar to that of the Zhao court’s construction of a Covered Act. Subdivision (e)(4) states “or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” Civ. Proc. Code § 425.16(e)(4).
The California Supreme Court may address the issue of what constitutes a Covered Act. The Court superseded Briggs v. Eden Council for Hope and Opportunity (1st Dist. 1997) 63 Cal.Rptr.2d 434, which followed the Zhao court’s construction of a Covered Act, and has granted review in the case. See (1997) 67 Cal.Rptr.2d 166, 942 P.2d 413.
A defendant in a SLAPP suit may defeat a claim arising from a Covered Act with a “special motion to strike,” unless the claimant establishes that there is a “probability that [it] will prevail on the claim.” See Civ. Proc. Code § 425.16(b) (in determining probability court shall consider pleadings and supporting and opposing affidavits stating facts upon which liability or defense is based). Courts hold that a claimant must show sufficient facts to establish a prima facie claim to meet its probability burden. See, e.g., Wilcox v. Superior Court (2nd Dist. 1994) 27 Cal.App.4th 809, 820, 33 Cal.Rptr.2d 446 (noting that probability standard is similar to that for determining nonsuit or directed verdict motions) (failure to establish probability of prevailing on defamation claim).
A prevailing party on a motion to strike may recover fees pursuant to Civ. Proc. Code § 425.16(c). See Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (2nd Dist. 1996) 47 Cal.App.4th 777, 781-782, 54 Cal.Rptr.2d 830 (allowing fees incurred on appeal of motion to strike).
Victims of harassment suits may seek redress by bringing a malicious prosecution claim against the opposing counsel. A malicious prosecution plaintiff must establish that the defendant’s underlying action (1) failed on its merits, (2) was brought without probable cause, and (3) was brought with malice. See Robbins v. Blecher (2nd Dist. 1997) 52 Cal.App.4th 886, 893, 60 Cal.Rptr.2d 815. See also Westamco Investment Co. v. Lee (1999) 69 Cal..App.4th 481, 81 Cal.Rptr.2d 634 (malicious prosecutor plaintiff does not need to comply with section 1714.10 of the Civil Code (requiring court approval before suing an attorney and his client for conspiracy) if plaintiff alleges separate and independent wrongs by the attorney).
If the underlying action was dismissed because of technical or procedural grounds, such as jurisdictional or statute of limitations defenses, then that does not constitute “favorable termination” for purposes of malicious prosecution. See, e.g., Hall v. Harker (1999) 69 Cal.App.4th 836, 82 Cal.Rptr.2d 44 (statute of limitations, statute of frauds and parol evidence rule all "procedural or technical" victories and not favorable terminations); Pattiz v. Minye (1998) 61 Cal.App.4th 822, 71 Cal.Rptr. 802 (termination of case due to discovery abuse is not favorable termination); Eells v. Rosenblum (2nd. Dist. 1995) 36 Cal.App.4th 1848, 1855-1856, 43 Cal.Rptr.2d 323 (voluntary dismissal of suit due to its lack of maturity constituted termination due to a technical defect); Cantu v. Resolution Trust Corp. (2nd Dist. 1992) 4 Cal.App.4th 857, 881-883, 6 Cal.Rptr.2d 151 (dismissal through settlement does not constitute failure on the merits because it reflects ambiguously on the merits of action) (plaintiff and claimant in interpleader action are not adversaries, thus action could not have terminated in claimant’s favor); Robbins v. Blecher (2nd Dist. 1997) 52 Cal.App.4th 886, 893, 60 Cal.Rptr.2d 815 (plaintiff’s voluntary dismissal of alter ego claim against shareholder in order to collect judgment against shareholder’s corporation because of reversal of judgment against corporation did not concede that shareholder was innocent of alter ego claim); cf., Crowley v. Katleman (1994) 8 Cal.4th 666, 676, 34 Cal.Rptr.2d 386, 881 P.2d 1083 (defendants concede that voluntary dismissal of appeal with prejudice constituted failure on the merits). However, if an action is dismissed on a procedural ground and that judgment is affirmed on a different ground going to the merits (e.g., lack of duty), then the appellate decision constitutes a favorable termination. Ray v. First Federal Bank (1998) 61 Cal.App.4th 315, 71 Cal.Rptr. 436.
The California Supreme Court stated in Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 878, 886, 254 Cal.Rptr. 336, 765 P.2d 498 that the probable cause element calls for an objective determination of whether the action was legally tenable based upon the facts known to the plaintiff at the time of the action. Thus, in Sheldon, the sellers in a real estate transaction could rely on then-existing case law to establish probable cause to bring a claim against the buyers). See also Cantu v. Resolution Trust Corp. (2nd Dist. 1992) 4 Cal.App.4th 857, 881-883, 6 Cal.Rptr.2d 151 (notice of competing claims gave stakeholder probable cause to name claimants in interpleader action); Bixler v. Goulding (2nd Dist. 1996) 45 Cal.App.4th 1179, 1189-1190, 53 Cal.Rptr.2d 246 (doctor’s involvement in patient’s treatment gave medical health care provider probable cause for indemnification claim against doctor); cf., Hufstedler, Kaus & Ettinger v. Superior Court (2nd Dist. 1996) 42 Cal.App.4th 55, 61, 49 Cal.Rptr.2d 551 (where facts in record demonstrate legal tenability of action, attorney’s actual knowledge at time of action is irrelevant). Each cause of action in the underlying matter must be supported by probable cause. Crowley v. Katleman (1994) 8 Cal.App.4th 666, 676, 34 Cal.Rptr.2d 386, 881 P.2d 1083 (claim for malicious prosecution may lie for action charging multiple grounds of liability when some but not all grounds lack probable cause); Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 71 Cal.Rptr. 657 (before pleading tenuous causes of action, attorneys should investigate and use discovery to determine if the additional causes of action are warranted).
For cases discussing the element of malice, see Cantu v. Resolution Trust Corp. (2nd Dist. 1992) 4 Cal.App.4th 857, 881-883, 6 Cal.Rptr.2d 151 (allegation that stakeholder in interpleader action used claimant as an instrumentality to obtain attorney fees was insufficient to show malice); Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 254 Cal.Rptr. 336, 765 P.2d 498 (extent of attorney’s research and investigation may be relevant to determination of malice); Grindle v. Lorbeer (2nd Dist. 1987) 196 Cal.App.3d 1461, 1465, 1468, 242 Cal.Rptr. 562 (negligence in filing suit does not necessarily constitute malice, which entails “actual ill will or some improper purpose, whether express or implied.”)
Abuse of Process
For purposes of the abuse of process tort, “process” is an “action taken pursuant to judicial authority.” Adams v. Superior Court (6th Dist. 1992) 2 Cal.App.4th 521, 530, 3 Cal.Rptr.2d 49. See, e.g., Carney v. Rotkin, Schmerin & McIntyre (2nd Dist. 1988) 206 Cal.App.3d 1513, 1526, 254 Cal.Rptr. 478 (giving notice of a proceeding does not constitute “process” for purpose of tort); cf., Younger v. Solomon (5th Dist. 1974) 38 Cal.App.3d 289, 296-297, 113 Cal.Rptr. 113 (use of written interrogatories constitutes use of process).
The California Supreme Court has stated that the two fundamental elements of the abuse of process tort are “`first, an ulterior purpose, and second, a wilful act in the use of process not proper in the regular conduct of the proceeding.”’ See Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1168, 232 Cal.Rptr. 567, 728 P.2d 1202 (quoting Templeton Feed & Grain v. Ralston Purina Co. (1968) 69 Cal.2d 461, 466, 72 Cal.Rptr. 344, 446 P.2d 152). Other courts have used similar, if not equivalent, language in describing the tort. See, e.g., Stolz v. Wong Communications Ltd. Partnership (3rd Dist. 1994) 25 Cal.App.4th 1811, 31 Cal.Rptr.2d 229 (abuse of process is an “act done in the name of the court and under its authority for the purpose of perpetrating an injustice”) (quoting Meadows v. Bakersfield S. & L. Assn. (6th Dist. 1967) 250 Cal.App.2d 749, 753, 59 Cal.Rptr. 34); Adams v. Superior Court (6th Dist. 1992) 2 Cal.App.4th 521, 530, 3 Cal.Rptr.2d 49 (abuse of process requires a “wrongful use of process” and that the “act complained of must involve the use of process”) (italics in original). See also Stolz v. Wong Communications Ltd. Partnership (3rd Dist. 1994) 25 Cal.App.4th 1811, 31 Cal.Rptr.2d 229 (tort does not apply to misuse of administrative proceedings); cf., Day v. Rosenthal (2nd Dist. 1985) 170 Cal.App.3d 1125, 1141, 1179, 217 Cal.Rptr. 89 (attorney’s conduct in bankruptcy proceedings constituted abuse of process).
In general, merely instituting or maintaining an action “even for an improper does not constitute abuse of process. See Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1168, 232 Cal.Rptr. 567, 728 P.2d 1202 (quoting Templeton Feed & Grain v. Ralston Purina Co. (1968) 69 Cal.2d 461, 466, 72 Cal.Rptr. 344, 446 P.2d 152) (allowing abuse of process claims to rest on an improper filing of an action would effectively circumvent the lack-of-probable-cause element in the malicious prosecution tort); Bidna v. Rosen (4th Dist. 1993) 19 Cal.App.4th 27, 40, 23 Cal.Rptr.2d 251 (bringing multiple child custody proceedings does not give rise to abuse of process claim); Silver v. Gold (2nd Dist. 1989) 211 Cal.App.3d 17, 24, 259 Cal.Rptr. 185 (merely filing a motion to disqualify counsel does not support abuse of process claim); Cantu v. Resolution Trust Corp. (2nd Dist. 1992) 4 Cal.App.4th 857, 881-883, 6 Cal.Rptr.2d 151 (filing interpleader action in and of itself is inadequate basis for claim). But see Day v. Rosenthal (2nd Dist. 1985) 170 Cal.App.3d 1125, 1141, 1179, 217 Cal.Rptr. 89 (affirming abuse of process judgment based on filing false and meritless claims in bankruptcy court).
Rather, abuse of process requires a “misuse of the tools the law affords litigants.” (Bidna v. Rosen (4th Dist. 1993) 19 Cal.App.4th 27, 40, 23 Cal.Rptr.2d 251 (italics in original). See, e.g., Templeton Feed & Grain v. Ralston Purina Co. (1968) 69 Cal.2d 461, 466-467, 72 Cal.Rptr. 344, 446 P.2d 152 (defendant lender’s seizure of debtor’s property constituted abuse of process since defendant knew it did not have right to possess property and defendant procured seizure for ulterior purpose of forcing plaintiff to discharge debtor’s obligation to defendant); White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336, 351, 66 Cal.Rptr. 697, 438 P.2d 345 (procuring excessive attachment of property for purposes of extortion/harassment constitutes abuse of process); Kappel v. Bartlett (2nd Dist. 1988) 200 Cal.App.3d 1457, 1467, 246 Cal.Rptr. 815 (allegation that defendant process server knowingly executed false declaration that he served plaintiff with complaint stated valid cause of action for abuse of process); Younger v. Solomon (5th Dist. 1974) 38 Cal.App.3d 289, 298, 113 Cal.Rptr. 113 (attorney is liable for abuse of process if he used interrogatories to injure opposing party’s reputation); Microsoft Corp. v. A-Tech Corp. (C.D. Cal. 1994) 855 F.Supp. 308, 312 (use of asset freeze order to tie up more assets than reasonably necessary to secure claim is an abuse of process).
Absent extraordinary circumstances, an attorney may not be liable for urging a client to breach a contract with some third party. Schick v. Bach (2nd Dist. 1987) 193 Cal.App.3d 1321, 238 Cal.Rptr. 902. See also Los Angeles Airways, Inc. v. Davis (9th Cir. 1982) 687 F.2d 321 (“manager’s privilege” allows an attorney to induce the client to breach a contract provided that the attorney is at least partially motivated by a desire to aid the client). [See 1.1:430 Assisting Unlawful Conduct]
In general, except as otherwise provided by law, a law firm and each of its principals is subject to civil liability for injury legally caused to a person by any wrongful act or omission of any principal or employee of the firm who was acting in the ordinary course of the firm’s business or with actual authority. Restatement LGL § 79. California follows this rule. Attorneys may be held liable for the negligence of their employees. See Layton v. State Bar (1990) 50 Cal.3d 889, 900, 268 Cal.Rptr. 845, 789 P.2d 1026 (attorney cannot escape malpractice liability by blaming secretary); Gadda v. State Bar (1990) 50 Cal.3d 344, 353, 267 Cal.Rptr. 114, 787 P.2d 95 (attorneys are responsible for the work product of their employees).
Under California’s adoption of the Uniform Partnership Act, members of a law partnership are jointly and severally liable for malpractice claims against the partnership. See Corp. Code § 15015. Firms organized as corporations or limited liability partnerships must provide security for malpractice judgments pursuant to State Bar rules and regulations. See State Bar Law Corporation Rules, rule IV B; State Bar Limited Liability Partnership Rules, section 5.0. See also B&PC § 6167 (law corporations are subject to the same disciplinary standards as individual members of the bar); Beane v. Paulsen (3rd Dist. 1993) 21 Cal.App.4th 89, 96, 26 Cal.Rptr.2d 486 (attorneys’ renouncement of interest in law corporation did not release them from malpractice liability).
A partner who has left a partnership remains vicariously responsible for all tortious or contractual liability that is proved to have accrued during the partner’s tenure.