Tuesday, August 6, 2019
Page 1
Court of Appeal:
Client’s Failure of Disclosure to Lawyers Constituted Fraud
By a MetNews Staff Writer
Attorneys who were not paid for their work had a cause of action against their former client not only for breach of contract but fraud where she recruited them to sue her homeowners’ association for false arrest without revealing other pending litigation with that party and without telling of its $240,000 judgment against her, Div. Three of the Fourth District Court of Appeal held yesterday.
Justice Eileen C. Moore wrote the opinion, which was not certified for publication. It affirms a $48,000 judgment in favor of attorneys Andrew Bisom and Mark Eisenberg, each of whom has a separate office in Irvine, against their ex-client, Nancy Howell.
Behind the backs of Bisom and Eisenberg, Howell settled her false-arrest action against the homeowners’ association (“HOA”) by agreeing to drop her action in exchange for the association forgiving the debt on the judgment against her, plus giving her $4,000. She then refused to pay the lawyers.
Eisenberg’s Testimony
Moore said that substantial evidence supported the judgment to the extent it was based on fraud, pointing to this testimony by Eisenberg:
“If I knew then what I know now, the reality is this case was destined to be problematic from the first instance. It was clear that our client, Mrs. Howell, had an agenda that had not been shared with us. She clearly was looking to escape the underlying judgment and the ramifications of that judgment including the pursuit of her assets which started only one day before our retention [a debtor’s exam].”
Moore wrote:
“Based on the testimony of Bisom and Eisenberg, as well as the totality of the evidence, a jury could have reasonably inferred that Howell’s concealment of the ongoing HOA litigation was intentional. That is, it was reasonable for the jury to infer that Howell deliberately sought to leverage the services of the Attorneys—in the false arrest lawsuit—in order to secure the HOA’s settlement of the outstanding $240,000 judgment against her. In order to accomplish that end, Howell would presumably need to keep the Attorneys unaware of what was going on with her pending litigation involving the HOA. Thus, there was sufficient evidence of fraudulent intent.”
Bankruptcy Filing
Howell has filed for bankruptcy protection. The Court of Appeal initially stayed the proceedings before it based on the filing in federal court, but the bankruptcy judge indicated an intent to decide the dischargeablity of the judgment in favor of Bisom and Eisenberg after the appeal is decided, and the stay was lifted.
The jury awarded the lawyers $144,243.71 in punitive damages but retired Orange Superior Court Judge Randall L. Wilkinson, siting on assignment, struck the award. The lawyers did not file a cross appeal.
The case is Bisom v. Howell, G052925
Each of the parties was in pro per.
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