25 Cal.App.5th 1155
Cal. Ct. App.2018Background
- Robin and Kris Leamy hired Morgan Miller Blair (MMB) to pursue claims arising from a failed real estate purchase; disputes about MMB’s fees arose after litigation/arbitration.
- MMB claimed over $431,000 in unpaid fees; parties negotiated a settlement Agreement where defendants agreed to pay $150,000 in exchange for MMB’s release and cooperation.
- The Agreement contained mutual general releases, an express waiver of Civil Code § 1542, and recitals that parties had been advised of and relied on counsel of choice; defendants executed the Agreement but never paid.
- MMB dissolved in 2012; MMB’s assignee, Property California SCJLW One Corp., sued in 2016 to enforce the Agreement.
- Defendants defended by asserting lack of consideration (legal malpractice rendered the fee claim invalid), and sought rescission based on alleged nondisclosure of MMB malpractice and inadequate independent counsel; they offered expert testimony to support malpractice claims.
- Trial court granted plaintiff’s summary judgment after excluding defendants’ expert declaration as inadmissible; judgment for $150,000 plus interest was entered and defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff made a prima facie showing of breach of contract | Agreement existed, MMB performed (accepted discounted compromise and transitioned representation), defendants did not pay, plaintiff damaged | Agreement unenforceable for lack of consideration or rescindable due to fraud/ethical nondisclosure | Plaintiff met prima facie burden; trial court properly shifted burden to defendants |
| Admissibility of defendants’ expert (Koss) on malpractice | Expert lacked foundation and analysis; opinions speculative and conclusory | Expert established malpractice issues raising triable fact on consideration/rescission | Trial court did not abuse discretion excluding Koss: opinions lacked evidentiary foundation, relied on inadmissible materials, and were conclusory |
| Lack of consideration defense (malpractice nullifies consideration) | Settlement of a disputed, colorable fee claim constituted valid consideration for the release | MMB’s malpractice made its fee claim wholly invalid so there was no consideration for defendants’ promise to pay | Settlement of a disputed, colorable claim is valid consideration; defendants failed to show MMB’s claim lacked colorable basis or was pursued in bad faith |
| Rescission based on alleged failure to disclose malpractice / Rule 3-400 compliance | Not applicable to plaintiff; Agreement recited disclosure and independent counsel; defendants had opportunity and awareness | MMB violated ethical rules by not disclosing malpractice, inducing execution and warranting rescission | Failure to comply with professional conduct rules does not automatically permit rescission; defendants were aware of their rights and suffered no prejudice; rescission defense failed |
Key Cases Cited
- Sargon Enterprises, Inc. v. Univ. of Southern California, 55 Cal.4th 747 (expert gatekeeping and admissibility)
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (summary judgment standard; view evidence favorably to nonmoving party)
- Wall Street Network, Ltd. v. New York Times Co., 164 Cal.App.4th 1171 (elements of breach of contract)
- Kaufman v. Goldman, 195 Cal.App.4th 734 (public policy favoring settlement; settlement as consideration)
- Nesbitt Fruit Prods., Inc. v. Del Monte Beverage Co., 177 Cal.App.2d 353 (compromise of disputed claims as consideration)
- Jennings v. Palomar Pomerado Health Sys., 114 Cal.App.4th 1108 (expert opinion must connect facts to conclusions; conclusory opinions inadmissible)
- Powell v. Kleinman, 151 Cal.App.4th 112 (standards for expert declarations on summary judgment)
- Summers v. A. L. Gilbert Co., 69 Cal.App.4th 1155 (expert cannot advocate in guise of testimony; inadmissible legal conclusions)