Ethics update
By Jonathan Bishop
This section highlights recent developments in attorney professional responsibility,
including new cases, advisory ethics opinions, pending legislation and proposed
rule amendments.
Cases
Shafer v. Berger, Kahn et. al., (2003) 107 Cal.App.4th 54 [131 Cal.Rptr.2d
777]
In Shafer, the plaintiff argued on appeal that the trial court erred in dismissing
the causes of action brought against the liability insurer's coverage counsel
to recover for fraudulent misrepresentation of coverage and civil conspiracy.
The court of appeal held that an attorney, who was retained by an insurance
company to provide coverage advice in a lawsuit against its insured, may be
held liable to the plaintiff in that lawsuit for making a fraudulent statement
about coverage.
Under the facts, counsel had a duty not to make fraudulent statements to the
creditors, and counsel's alleged misrepresentation about lack of coverage for
willful acts was a representation that was justifiably relied on by the creditors.
The litigation privilege did not shield counsel from liability; and the pre-filing
procedure for pleading a cause of action against an attorney for a civil conspiracy
with a client did not apply.
Parris v. Superior Court, (2003) 109 Cal.App.4th 285, 135 Cal.Rptr.2d 90.
Plaintiffs brought a class action, alleging employer's violation of California's
wage and hour laws regarding overtime compensation, and unfair competition.
The trial court denied plaintiffs' motion to communicate with potential class
members before class certification and to compel discovery of names and addresses
of potential class members.
The Court of Appeal ruled that the requirement of court approval for pre-certification
communications with potential class action members was a prior restraint on
speech, in violation of the California Constitution. Parris plainly rejects
the requirement in prior cases that the trial court screen communications sent
to potential class members.
A court may impose restrictions on communications only when a party seeks an
injunction, protective order or demonstrates "direct, immediate, and irreparable
harm." Pre-certification communications are regulated by Rule 1-400 of the Rules
of Professional Conduct, which prohibits false, misleading and deceptive messages.
Petition for Review Granted
Fletcher v. Davis (2003) 106 Cal.App.4th 398, review granted May 14, 2003,
S114715.
In Fletcher, a discharged attorney brought an action against his former corporate
client and other parties seeking to recover fees and costs pursuant to an oral
charging lien. The trial court held that the client's agreement to a charging
lien had to be in writing in order to be enforceable.
In reversing the trial court, the court of appeal found that: (1) the oral
charging lien was a valid oral agreement with a corporate client under Bus.
& Prof. Code, §6148(d)(4); and (2) the charging lien was not subject to
the writing requirement of rule 3-300 of the Rules of Profession-al Conduct,
as it was not an adverse interest under case law interpreting the rule.
On May 14, 2003, the California Supreme Court granted a petition for review
to consider the following issues: (1) whether an attorney's agreement with a
client authorizing a lien for payment of attorney's fees to be imposed against
any recovery in litigation must be in writing; and (2) whether an attorney must
obtain a judgment against the client to establish the amount of the lien before
suing non-client third parties to enforce the lien.
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