Friday, December 1, 2006
C.A. Reinstates Lawyer’s Suit Against His Former Firm
By KENNETH OFGANG, Staff Writer
An attorney who represented the same client at several law firms, and was sued for malpractice, may be entitled to recoup at least part of his defense costs from one of those firms, the Court of Appeal for this district has ruled.
Div. Three Wednesday affirmed Los Angeles Superior Court Judge John Shook’s order granting Ralph Cassady a trial on his claims against Morgan, Lewis & Bockius. Shook had earlier granted the firm’s motion for summary judgment, saying Cassady could not prove what portion of the costs were related to his 13-month tenure at Morgan Lewis, but ultimately concluded he had been in error.
Cassady claims he spent nearly $300,000 to defend himself against malpractice claims by Rallie P. Rallis, an entrepreneur he represented in numerous matters between 1969 and 1994. He also alleges that all but $10,000 of that expense relates to the defense of claims that stem from the time he was at Morgan Lewis.
Cassady was a partner at Hahn, Cazier and Leff for more than 12 years before joining substantially all of Hahn Cazier’s attorneys in joining Morgan Lewis, which began in Philadelphia in 1873 and now has more than 1,300 lawyers practicing in 21 offices.
He was of counsel to Morgan Lewis from February 1987 to March 1988, prior to joining with Raymond M. Klein to form Cassady & Klein.
Rallis sued Cassady, Morgan Lewis, and others in 1995, alleging several causes of action, including malpractice and breach of fiduciary duty, all occurring between 1982 and 1994. The suit stemmed from what Rallis claims was Cassady’s mishandling of a number of transactions, including the termination of the general manager of one of Rallis’ companies.
Morgan Lewis retained Sheppard Mullin to defend it and several former Hahn Cazier firms in the suit, but refused to indemnify or defend Cassady or Cassady & Klein, who were represented by Los Angeles attorney Baird A. Brown. Eventually, all defendants prevailed in the trial court by way of voluntary dismissal, demurrer, summary adjudication, or summary judgment, but the Court of Appeal in 2000 reinstated the claims against Cassady and Cassady & Klein, who later settled with Rallis.
Cassady sued Morgan Lewis for indemnity under Labor Code Sec. 2802 and California common law, alleging that the firm was responsible for costs to the extent the claims concerned work done at both Morgan Lewis and Hahn Cazier. Morgan Lewis cross-complained, alleging that Cassady was liable for indemnity under his employment contract and Labor Code Sec. 2865, which provides that an employee is liable for damages to the employer resulting from the employee’s “culpable degree of negligence.”
After granting the firm’s motion for summary judgment, Shook conducted a bench trial on the cross-complaint and granted judgment in Cassady’s favor. In later granting Cassady’s new trial motion, the judge ruled that there was a triable issue with respect to the apportionment of attorney fees for the defense of the malpractice case.
Justice Richard Aldrich, writing for the Court of Appeal, said that Shook was correct in holding that his original ruling was erroneous. An employee who claims that he incurred expense to defend himself from a suit resulting from his work on behalf of multiple employers states a triable claim for indemnity, the justice said, unless a particular defendant shows that the employee has no evidence as to how the expenses may be apportioned and no reasonable possibility of obtaining such evidence.
Morgan Lewis, Aldrich went on to say, did not make such a showing.
Aldrich agreed with Morgan Lewis that it can be held liable, if at all, only to the extent that Rallis’ claims related to work performed at the firm, and that Cassady has the burden of proof on the issue of apportionment. Meeting that burden may be difficult, but it would be premature to conclude that the plaintiff cannot do so as to at least some of the costs, Aldrich said.
Cassady may present as evidence the complaint filed by Rallis, the jurist wrote.
“For the most part, Rallis alleged particular failings occurring at specified dates or periods,” the justice wrote. “Thus, while it may not be easy for Cassady to prove which defense costs arose from the scope of his employment, it is clearly not impossible.”
In an unpublished portion of the opinion, Aldrich said Cassady also established a triable claim for indemnity at common law.
Morgan Lewis was represented on appeal by three of its own attorneys, Andrea Sheridan Ordin and Salvatore Picariello of the Los Angeles office and Thomas M. Peterson of San Francisco. Cassady was represented by Baird A. Brown and by Marc J. Poster of Greines, Martin, Stein and Richland.
The case is Cassady v. Morgan, Lewis & Bockius, 06 S.O.S. 5842.
Copyright 2006, Metropolitan News Company