Opinion
No. C076007.
03-01-2016
JEFFREY D. STUARD et al., Plaintiffs and Respondents, v. MATTHEW STUARD, Defendant and Appellant.
[Modification of opinion (244 Cal.App.4th 590, ___ Cal.Rptr.3d ___), upon denial of rehearing.]
THE COURT. — IT IS ORDERED that the opinion filed herein on January 29, 2016, be modified as follows:
1. On page 2, line 6 of the first paragraph [244 Cal.App.4th 597, advance report, 1st par., line 3], delete the words "a plaintiff" and insert the words "an adverse party" between the words "representing" and "in" so the sentence reads:
Sheppard Mullin was disqualified from that litigation because, without obtaining informed consent from either client, Sheppard Mullin represented J-M, the defendant in the litigation, while simultaneously representing an adverse party in that case, South Tahoe Public Utility District (South Tahoe), in unrelated matters.
2. On page 28 insert a footnote after the word "conflict" at the end of the last sentence in the last paragraph [244 Cal.App.4th 618, advance report, 2d full par., line 7]. These cases are distinguishable in that none of them involved an actual conflict.
In Slovensky, the court accepted as true the plaintiff's allegations that her former attorneys breached their fiduciary duty by failing to disclose that they were settling a number of plaintiffs' cases together in a global settlement. No actual conflict was demonstrated. (Slovensky v. Friedman, supra, 142 Cal.App.4th at p. 1534.)
3. On page 29, insert a footnote after the word "irrelevant" in the last sentence of the first paragraph [244 Cal.App.4th 619, advance report, 1st par., last line].
J-M's actual damages as result of Sheppard Mullin's breach are irrelevant.
[245 Cal.App.4th 63c]
We recognize that disgorgement, when sought as a tort remedy in cases not involving a serious ethical breach, may require evidence of actual damages to avoid providing the client with a windfall. (See, e.g., Frye v. Tenderloin Housing Clinic, Inc. (2006) 38 Cal.4th 23, 48 [40 Cal.Rptr.3d 221, 129 P.3d 408]; Slovensky v. Friedman, supra, 142 Cal.App.4th at pp. 1535-1536.) When a serious ethical breach is at issue, however, an attorney may not recover fees for services rendered. It makes no difference whether the fees have already been collected from the client or if the fees have yet to be paid.
The petition for rehearing is denied.