Articles Posted in Legal Ethics

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The Court of Appeal reversed the trial court's judgment reducing a law firm's fee to 10 percent in an action where the law firm represented the family of a pilot who died in a plane crash. The court held that the trial court abused its discretion when it awarded the attorney fees of only 10 percent of the total value of the settlement where the trial court gave too little consideration to California Rules of Court, rule 7.955(a)(2), which required it to take into account the terms of the law firm's representation agreement. The court declined to determine in the first instance what fee would be appropriate under rule 7.955 and remanded for the trial court to consider the matter in the first instance. View "Schulz v. Jeppesen Sanderson, Inc." on Justia Law

Posted in: Legal Ethics

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Plaintiffs, home mortgage consultants, alleged they were misclassified as exempt employees by Wells Fargo. ILG, a law firm, represented approximately 600 Wells Fargo consultants alleging the same claim as the Lofton class in multiple lawsuits; the ILG suits were dismissed because the underlying claims were resolved in Lofton. In 2014, the court of appeal affirmed an order, requiring ILG to deposit into a court-supervised escrow account over $5 million of settlement proceeds ILG claimed as attorneys’ fees. ILG had concealed that settlement from the Lofton court and its class member clients. The TRO was predicated on an allegation that ILG’s clients were actually members of the class compensated by the $19 million “Lofton” settlement and that ILG was compensating itself out of the separate settlement without court approval. On remand, the trial court concluded ILG was not entitled to attorney’s fees. The monies on deposit with the court were directed to be paid to the class members who participated in the settlement. The court of appeal affirmed. Until the trial court did something about it, ILG had constructive possession of the entire $6 million settlement and control over its disbursement. ILG received due process. Nothing in this record demonstrates that ILG’s services in securing $750 for each of its 600 clients and facilitating their participation in Lofton were worth the $5.5 million it claimed in attorneys’ fees. View "Lofton v. Wells Fargo Home Mortgage" on Justia Law

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After attempting to persuade the Tribe to pay him for services provided under construction and rental agreements, Findleton requested that the Tribe mediate and arbitrate pursuant to clauses in the agreements. The Tribe failed to respond. Findleton filed a petition in March 2012, in the Mendocino County Superior Court to compel mediation and arbitration. The court held the Tribe had not waived its sovereign immunity. The Tribe sought attorney fees it had incurred in defending against Findleton’s petition, which the superior court granted. The court of appeal remanded, finding the Tribe had waived its sovereign immunity, reversing the award of fees. On remand, Findleton again filed a petition to compel mediation and arbitration and sought contractual attorney fees he had incurred in the prior appellate proceedings. The Tribe did not oppose the fee motion on the merits but requested that the court defer ruling until the Tribe filed a demurrer challenging the court’s jurisdiction. The superior court rejected that request and granted Findleton’s motion, awarding costs ($4,591.79) and attorney fees ($28,148.75). The court of appeal affirmed. The Tribe has not demonstrated that tribal remedy exhaustion was required here nor would requiring exhaustion at this late date serve any purpose other than further delay of a case that is already six years old. View "Findleton v. Coyote Valley Band of Pomo Indians" on Justia Law

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After plaintiff's foreclosure action was dismissed, the trial court ordered plaintiff to pay attorney fees to defendants, finding certain provisions in the deed of trust she signed authorized the fee award. In the published portion of the opinion, the Court of Appeal held that the deed of trust authorized the addition of attorney fees to the loan amount, not a separate award to pay fees. The court also held that the Rosenthal Fair Debt Collections Practices Act provided no independent basis for ordering plaintiff to pay attorney fees. Accordingly, the trial court's order compelling plaintiff to pay attorney fees was reversed and the matter remanded. View "Chacker v. JPMorgan Chase Bank, N.A." on Justia Law

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In a wrongful foreclosure action, the Court of Appeal reversed the award of attorney's fees to Nationstar Mortgage that was based on a clause in the deed of trust. The court held that the clause at issue was not an attorney's fee provision. The court also held that simply pleading a right to attorney's fees was not a sufficient basis to judicially estop a party from challenging the opposing party's alleged contractual basis for an award of attorney's fees. Therefore, the trial court erred in relying on judicial estoppel as an alternative basis for its fee award. View "Hart v. Clear Recon Corp." on Justia Law

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The Court of Appeal affirmed the trial court's order disqualifying an attorney for a conflict of interest when the attorney represented more than one client, all of whom seek damages from a pool of money controlled by another party. In this case, the attorney simultaneously represented Bridgepoint in an Arizona action and Ram in the instant action. The court held that disqualification was automatic. Furthermore, the trial court reasonably concluded that the attorney obtained confidential information from Bridgepoint when he retained an expert to review Bridgepoint's financial records. Finally, there was a substantial relationship between the subject matter of the attorney's former representation of Bridgepoint in this case and his current representation of Ram. Therefore, the court had multiple independent grounds for disqualifying the attorney. View "Bridgepoint Construction Services v. Newton" on Justia Law

Posted in: Legal Ethics

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Sander and the First Amendment Coalition sought a writ of mandate to obtain information from the State Bar of California’s bar admissions database--individually unidentifiable records for all applicants to the California Bar Examination from 1972 to 2008 in the categories: race or ethnicity, law school, transfer status, year of law school graduation, law school and undergraduate GPA, LSAT scores, and performance on the bar examination. Making these records available to the public in a manner that protects the applicants’ privacy and anonymity, they believe, will allow researchers to study the potential relationship between preferential admissions programs in higher education and a gap in bar passage rates between racial and ethnic groups. The superior court upheld the State Bar’s denial of the request. The court of appeal affirmed. The court correctly found Petitioners’ request to be beyond the purview of the California Public Records Act (Gov. Code 6250) because it would compel the State Bar to recode its existing data and create new records. View "Sander v. State Bar of California" on Justia Law

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Cortese is the daughter of Francesca, and the stepdaughter of Robert. Attorney Sherwood handled their legal matters under Robert’s direction. Cortese alleges Robert promised her that, upon his death, “he would treat her equally as his other children.” Sherwood drafted Francesca’s will and represented Robert as executor during the administration of Francesca’s estate after Francesca’s 1997 death. Robert was worth $2 billion; Francesca’s estate was valued at $2 million. Robert became the trustee and life beneficiary of Francesca’s trust. Cortese and her sister were remainder beneficiaries. “Relying on Robert’s promises and [Sherwood]’s representations, [Cortese] did not challenge Robert’s acts as executor.” In 2008, “in reliance on promises,” by Sherwood and Robert, Cortese “reluctantly agreed to terminate the Trust … without the advice of counsel.” Cortese alleges the termination favored Robert, causing Cortese and her sister to bear unnecessary capital gains tax. After Robert’s 2016 death, Cortese was not a beneficiary of Robert’s estate. Cortese alleged breach of fiduciary duty against Sherwood and Topham, as co-trustees of Robert’s trust; third-party liability for breach of trust against Sherwood; and return of trust property against both. The court dismissed the second claim against Sherwood, apparently for failure to comply with Civil Code 1714.10: A party must establish a reasonable probability of prevailing before pursuing a “cause of action against an attorney for a civil conspiracy with his ... client arising from any attempt to contest or compromise a claim or dispute.” The court of appeal agreed. Cortese alleged Sherwood conspired with Robert and induced her to forego challenges to Robert’s actions--conduct arising from the compromise of a dispute. No statutory exceptions apply. View "Cortese v. Sherwood" on Justia Law

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The attorneys for plaintiff Lisa Levingston, O.D., failed to file an opposition to a motion for summary judgment. They had been substituted into the case after Levingston’s former attorneys were disqualified and the opposition that the former attorneys had filed was stricken. At the hearing on the motion, Levingston’s new counsel claimed they had not known that they needed to file a new opposition; they requested relief from default, under Code of Civil Procedure section 473(b), and a continuance. The trial court found that new counsel’s failure was inexcusable neglect, and granted summary judgment. The Court of Appeal concurred with the trial court’s finding that due to new counsel’s inexcusable neglect, Levingston was not entitled to relief under Code of Civil Procedure section 473(b); nevertheless, under controlling case law, she was entitled to a continuance to file an opposition. View "Levingston v. Kaiser Foundation Health Plan" on Justia Law

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Kenneth M. (Matazo) and Kazu Tagami were grantors of the Trust. Matazo and Kazu had three children: Kenneth K., Barbara, and Charles. A family dispute arose when the settlors suspected the prior trustee, who was Barbara's son, of embezzling funds from the Trust. Matazo and Kazu removed the prior trustee and appointed professional fiduciary Claudia Powell as trustee. Attorney Nancy Ewin drafted the restatement of the Trust; Powell hired attorney Kent Thompson to represent her in her fiduciary capacity as trustee of the Trust. A physician certified in March 2012 that Kazu was unable to make her own financial and medical decisions due to medical issues. Matazo died in August 2012. Kazu died almost three years later, in June 2015. Charles challenged two probate orders: (1) settling, allowing and approving the third and final predeath account and report of trustee (Third Account) and finding Charles objected to the Third Account without reasonable cause and in bad faith, which justified an award of costs and fees pursuant to Probate Code section 17211 (a); and (2) an award of attorney fees pursuant to Probate Code 17211 requiring Charles to pay these fees from his share of the Tagami Living Trust or personally if his share was inadequate. The Court of Appeal disagreed with Charles' contentions in both appeals and affirmed the Probate Court's orders. View "Powell v. Tagami" on Justia Law