Law Firm Suit Against Former Client on Behalf of a New Client
In A.I. Credit Corp., Inc. v. Aguilar & Sebastinelli (2003) 113 Cal.App.4th 1072, a law firm sued its former client on behalf of a new client.
The former client moved to disqualify the firm based on its alleged violation of rule 3-310(E).
The trial court granted the motion and in a later suit against the firm by the new client, the court held that the firm was not entitled to any fees, because of the firm's disqualifying violation of an ethical obligation. (A.I. Credit Corp., at p. 1079.)
The Court of Appeal affirmed, holding that the disqualification was not based on a "mere technical violation of ethical rules asserted after the fact.
The trial court determined that there was a disqualifying violation of ethical obligations." (Ibid.)
The court quoted from Goldstein v. Lees, supra, 46 Cal.App.3d 614 and from our opinion in Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1:
"'It is settled in California that an attorney may not recover for services rendered if those services are rendered in contradiction to the requirements of professional responsibility.' (Goldstein v. Lees, supra, 46 Cal.App.3d 614, 618 ... .) 'A court may prevent counsel's recovery of fees from the client where the attorney has violated ethical rules; whether through fraud, acts incompatible with the faithful discharge of duties or wrongful abandonment of the client.' (Cal Pak, supra, 52 Cal.App.4th 1, 15-16 ... .)" (A.I. Credit Corp., Inc. v. Aguilar & Sebastinelli, at p. 1076.)