Wednesday, July 16, 2008
The Definition of Chutzpah or I've-Seen-It-All-Now: Being On Both Sides of Appeal. Cal Court Calls It A Disregard of Duties "Without Precedent."
Posted by Alan Childress
If it were a Hollywood script, I would laugh at its utter incredibility: only Hollywood would unblinkingly make an attorney have a litigation interest in both sides of the appeal (and treat it as clever lawyering). But it happened, yes in California, and the court there called it a disregard of a client's fiduciary duties that is "without precedent." It certainly is, to my knowledge, and it as twistedly brilliant and stunningly nervy as it is stupid and in the "what were they thinking?" box. [Thanks to appellate attorney Greg May for letting us know and pointing us to his (detailed and excellent) post on The California Blog of Appeal.] My simplified but accurate version is this, re attorney Anthony Pagkas:
Civil defendant-client loses suit due to default judgment from Lawyer's alleged lack of diligence. Client then sues Lawyer for malpractice and also appeals the default. Lawyer then buys out the plaintiff's interest on appeal (gets an assignment of the interest from the prior plaintiff, for some "undisclosed consideration"). That's right: buys into the other side of the appeal and, now represented as a litigant by another attorney in his firm, owns the default judgment if it is upheld. On the other side from his barely-former client, in the appeal!
Brilliant: if Lawyer loses "his" appeal, then there are no malpractice damages and no causation. If he wins, he collects a $730,000 default judgment from the former client.
Stupid: this requires Lawyer to move the appeals court to substitute him as "respondent" in his former client's appeal.
Sort of predictable: ”Finding that the proposed substitution violates multiple rules of Professional Conduct as well as the Business and Professions Code, we will deny the motion.” Well, yeah. The court's stated astonishment to follow in explaining the denial and imposing sanctions is quoted by May, and its full opinion here as well, issued yesterday. Suffice it to say that "if the substitution were allowed, it is conceivable that Pagkas could prevail in both the malpractice action and in this appeal, leaving him with huge windfall at the expense of his former client. Pagkas’s disregard for his ongoing fiduciary duties to his former client in favor of his own personal gain is without precedent." (Footnote omitted.)
How did Lawyer ever think he would get away with this? The sanctions are merely $5260, but I am sure there is more to come. The case is Styles v. Mumbert, civil H029767 (6th Dist. July 15, 2008).
UPDATE: Not entirely without precedent, it has since occurred to me.