Proving once again that there’s no pleasing some people, the Court of Appeal has permitted a suit for legal malpractice to proceed on a theory that the attorneys should have been even more successful than they were in an earlier case. The court summarizes the claim and its holding:
Plaintiff seeks to impose liability on attorneys who produced a class action recovery of some $90 million, claiming they were negligent because they failed to obtain a still larger recovery. While we may share the attorneys’ dismay that their efforts have been rewarded with this lawsuit rather than with the kudos they no doubt expected, and perhaps deserve, we are nonetheless constrained to hold that plaintiff’s claim cannot be rejected out of hand. While it may well be that the attorneys did not breach their duty of care in failing to proceed under an alternative theory that would have produced a greater recovery, we cannot say, as did the trial court, that there simply was no duty for the attorneys to breach.
In the prior litigation, the attorneys represented a class of claims representatives for Farmers Insurance Exchange, who claimed (successfully) that they had improperly not been paid overtime compensation. In the current case, one of the members of the original class is suing the attorneys for malpractice, claiming that a different theory -- under California’s Unfair Competition Law -- would have yielded an even larger recovery. The trial court dismissed the malpractice case, on the ground that the attorneys can have had no duty to pursue claims that were not included in the class certification order in the previous case. The Court of Appeal has ruled that the malpractice case should be allowed to proceed on the ground “that the attorneys’ obligations may extend beyond the claims as certified to related claims arising out of the same facts that class members reasonably would expect to be asserted in conjunction with the certified claims.”
The court declines to hold that a class action attorney can build a fortress of the class certification order, and thereby be relieved of considering the pursuit of other theories, drawing an analogy to an attorney’s obligations to bring to a client’s attention legal problems or issues that fall outside the explicit scope of a retainer agreement. While the court accepts that there may have been perfectly good reasons for the attorneys to decide not to pursue the alternate theory, so that the attorneys may not in fact be liable for malpractice, it concludes that it is not possible to find as a matter of law that the attorneys were not negligent, so that a dismissal at the pleadings stage is premature. The case is remanded to the trial court to move forward on its merits, whatever they may ultimately prove to be.
The opinion in Janik v. Rudy, Exelrod & Zieff (June 22, 2004), Case No. A102513, can be read at these links in PDF and Word formats.
Update: Additional comment on this case in the context of California's Unfair Competition Law (Business & Professions Code 17200, the claim what was not pursued) is available at Overlawyered.
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