308 P.3d 767
Wash. Ct. App.2013Background
- RPC 1.8(a) generally bars a lawyer from a business transaction with a client unless disclosure and protections are satisfied; exception exists for transactions with prospective clients or during formation of the attorney-client relationship.
- There was no existing attorney-client relationship when Defoor and RLG executed the Agreement and Note; they had previously terminated representation.
- The Agreement/Note provided for lien security and future hourly fees, with past due amounts totaling $775,000 and the Note due upon specific events or June 15, 2008.
- RLG sought and obtained summary judgment upholding the Agreement/Note and a separate partial summary judgment for attorney fees and costs; Defoor’s claims for legal malpractice and fiduciary breach were dismissed.
- Defoor argued RPC 1.8(a) applied to the Agreement because of a prospective-client relationship and the lien; she also raised post-argument theory about a continuing attorney-client relation, but that was not properly preserved.
- The court noted the unpublished portion addressed, among others, the partial summary judgment on fees/costs and the dismissal of malpractice/fiduciary claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does RPC 1.8(a) apply to the Agreement and Note? | Defoor contends the lien/transaction is within 1.8(a). | RLG argues 1.8(a) governs only current clients and did not apply; no relationship at formation. | No; 1.8(a) does not apply to the pre-engagement agreement. |
| Is the lien or security interest within the scope of RPC 1.8(a) despite being a prospective-client transaction? | Lien as payment-security implicates 1.8(a). | Lien is not payment in property sense and does not constitute a business transaction under 1.8(a). | Lien/interest not within 1.8(a) under these facts. |
| Did the absence of an ongoing attorney-client relationship at the time of negotiation foreclose 1.8(a) analysis for the reengagement? | There was continuing interaction during reengagement and billing; could implicate 1.8(a). | No current client at negotiation; 1.8(a) limited to existing clients. | Not applicable; 1.8(a) does not apply. |
Key Cases Cited
- In re Disciplinary Proceeding Against Holcomb, 162 Wn.2d 563, 173 P.3d 898 (2007) (RPC 1.8(a) business transactions with clients at issue; guidance on prima facie fraud)
- In re Disciplinary Proceeding Against Johnson, 118 Wn.2d 693, 826 P.2d 186 (1992) (RPC 1.8(a) applicable to conflicts with current clients)
- Valley/50th Ave., LLC v. Stewart, 159 Wn.2d 736, 153 P.3d 186 (2007) (fee arrangements; public policy concerns under RPC 1.8(a))
- In re Disciplinary Proceeding Against McGlothlen, 99 Wn.2d 515, 663 P.2d 1330 (1983) (renegotiated fee arrangements; scrutiny under 1.8(a))
- In re Disciplinary Proceeding Against Greenlee, 158 Wn.2d 259, 143 P.3d 807 (2006) (text addressing scope of RPC 1.8(a))