Legal Ethics Corner

Ethics Corner is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

Attorneys' Continuing Obligations to Clients Could Affect Malicious Prosecution Defenses

As we know, the Supreme Court in Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 819–820, put all attorneys on notice of continuing obligations owed to former clients. There, attorney Goldman represented Oasis  in its effort to obtain approval of a redevelopment project. About two years after Goldman terminated the representation, he became involved in a political campaign to thwart the redevelopment project. Oasis sued Goldman for breach of fiduciary duty. Goldman filed an anti-SLAPP motion to strike the complaint. The Supreme Court " readily found that Oasis has demonstrated a probability of prevailing on its claims." (Id. at p. 820.) The court relied on the rule that "'an attorney is forbidden to do either of two things after severing [the] relationship with a former client. [The attorney] may not do anything which will injuriously affect [the] former client in any matter in which [the attorney] formerly represented [the client] nor may [the attorney] at any time use against [the] former client knowledge or information acquired by virtue of the previous relationship.'" (Id. at p. 821.)

The court rejected Goldman's argument that this duty applies "in only two specific circumstances: (1) where the attorney has undertaken a concurrent or successive representation that is substantially related to the prior representation and is adverse to the former client, or (2) where the attorney has disclosed confidential information." (Id. at p. 822.) The court noted: "It is well established that the duties of loyalty and confidentiality bar an attorney not only from using a former client's confidential information in the course of 'making decisions when representing another client,' but also from 'taking the information significantly into account in framing a course of action' such as 'deciding whether to make a personal investment' - even though, in the latter circumstance, no second client exists and no confidences are actually disclosed." (Id. at pp. 822-823.)

The implications could be significant.   A client sued for malicious prosecution may assert the defense of reliance on advice of counsel which is  a complete defense, even if probable cause was otherwise lacking.  (Brinkley v. Appleby (1969) 276 Cal.App.2d 244, 246.)  However, raising the defense waives the attorney-client privilege to the extent such communications are placed at issue. (Transamerica Title Ins. Co. v. Superior Ct. (1987) 188 Cal.App.3d 1047.)

If both the client and attorney are sued and the client waives attorney client privilege by asserting the defense, would the attorney testifying to facts which may be “injurious”to the client be contrary to the Oasis rule?   Would testifying to material facts harmful to the client which the attorney “acquired by virtue of the previous relationship” be contrary to the Oasis rule?   The language of the opinion would appear to answer both questions in the affirmative which could conflict with every witnesses duty to testify truthfully.   Malicious prosecution suits present just one of many issues affected by the Oasis decision. 

- Andrew Servais

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**