Quantum Meruit Recovery Denied to Attorney.
California Rule of Professional Conduct 3-300 requires an attorney entering into a business transaction with a client to make the transaction fair in nature, put it in writing, advise the client in the writing to seek the advice of an independent lawyer, and then have the client consent in writing to the terms of the transaction. A corollary to this rule is Probate Code section 16004, which creates a presumption of undue influence when a trustee obtains an advantage from the beneficiary during the existence of a trust. Section 16004 has been applied to the fiduciary relationship between attorney and client. (BGJ Associates v. Wilson, 113 Cal.App.4th 1217, 1227-1228 (2003).)
Now, the First District, Division 2 has published a 38-page decision, Fair v. Bakhtiari, Case No. A126844 (1st Dist., Div. 2 May 24, 2011) (certified for publication), that is must reading in the area of ethics. Even though attorney and client entered into a successful business venture, the attorney’s violation of rule 3-300 and section 16004(c) not only resulted in a voiding of the business agreements but also resulted in a loss of quantum meruit recovery by the attorney for the reasonable value of the services he provided to the clients. Pretty harsh result, but one squarely within these important ethical constraints.
BLOG UNDERVIEW--Co-contributor Marc recently went to a UCLA School of Law reunion. Among others that he caught up with was James I. Ham, who co-contributor Mike knows from growing up in the Central Valley (Mike went to Bullard High; Jim went to Clovis High) and USC undergrad days. Jim has developed a specialty in legal ethical issues and is a partner with South Pasadena-based Pansky Markle Ham LLP. His co-partner, Ellen Pansky, is well known for lecturing, writing, and providing advice on legal ethical issues too. Our hello goes out to Jim.
Comments