Ethics, Settlement: Attorneys, Under Settlement Agreement Of Fee Dispute With Ex-Clients, Did Not Have To Reveal Potential Legal Malpractice Claims For Purposes Of Entering Into Valid Settlement Agreement Over Fees Dispute

Ex-Clients Were Not Entitled To Rescind Settlement Agreement For Purported Ethical Violations.

            The First District, Division 1, in Property California SCJLW One Corp. v. Leamy, Case No. A152959 (1^st Dist., Div. 1 Aug. 9, 2018) (published), had to confront whether ex-clients entering into a settlement agreement over a fee dispute with their former attorneys could rescind the settlement based on allegedly nondisclosed legal malpractice claims against their attorneys. The appellate court answered “no,” reasoning that (1) punishment for California Rules of Professional Conduct ethical violations was a matter within the purview of the State Bar; and (2) ex-clients “do not cite to any authority holding that failure to comply with the ethical rules entitles a client to rescind a settlement agreement for attorney fees” (Slip Op., pp. 16-17).