Attaching Settlement Agreement to Demurrer Saved Former Client on Appeal.
In DeGenarro v. Geiger & Merritt, LLP, Case No. G047461 (4th Dist., Div. 3 Sept. 13, 2013) (unpublished), fired, former law firm sued client for unpaid fees. Client and old firm signed a settlement agreement, with client serving old law firm with an independently-filed malpractice action before execution of the settlement agreement. Old law firm obtained a demurrer-sustaining dismissal without leave based on the argument the malpractice action was a mandatory cross-claim which needed to be filed in the fee collection case.
On appeal, the judgment was reversed.
The appellate court, in a 3-0 panel decision authored by Justice Fybel, agreed that the malpractice action fell within the compulsory cross-claim rule. However, client saved the bacon by attaching the settlement agreement with old firm to the demurrer opposition. The language of the agreement had some malpractice action carve-out language of sufficient import to show an amendment to the complaint might be made to beat the compulsory cross-claim rule. The Court of Appeal found that neither it nor the lower court could take judicial notice of the settlement agreement, but the language in it sufficed to give client another crack at a second pleading.