Page 1
Court of Appeal:
Existence of Fee Dispute With Client Is Confidential Matter
Justices Say Discord Over Amount Owed to Lawyers May Not Be Mentioned in Seeking to Be Relieved as Counsel
By a MetNews Staff Writer
An attorney who is seeking court permission to withdraw as counsel has an ethical duty to the client not to make reference to any fee dispute as a factor underlying the motion, the Court of Appeal for this district has held, declaring that such a disclosure breaches confidentiality.
Justice Anne H. Egerton of Div. Three authored the unpublished opinion, filed Friday. It affirms an order by then-Los Angeles Superior Court Judge Stephanie M. Bowick, now a mediator/arbitrator, denying an anti-SLAPP motion put forth by downtown Los Angeles attorney Laine T. Wagenseller.
Wagenseller’s firm had represented Jerry Jamgotchian and two of his companies in a business-litigation action against them. Discord arose between the lawyer and the clients, in particular over the fee-deposit not being replenished.
Motions to Withdraw
On July 25, 2022, Wagenseller brought three ex parte motions—a separate motion as to each client—setting forth:
“The client…renders it unreasonably difficult for the lawyer to carry out the representation effectively….
“The client breached a material term of an agreement with, or obligation, to the lawyer relating to the representation (Client Retainer Agreement; payment of fees), and the lawyer has given the client a reasonable warning after the breach that the lawyer will withdraw unless the client fulfills the agreement or performs the obligation….This Motion is brought on ex parte basis given the currently scheduled trial date of October 3, 2022; time is of the essence.”
Two days later, Los Angeles Superior Court Judge Kevin Brazile granted the motions.
Jamgotchian and his companies retained other counsel (including the lawyer who had provided the bulk of the services when Wagenseller’s firm was providing representation). They lost the case—to the tune of $8,032,151, exclusive of fees and costs—and sued Wagenseller for legal malpractice and breach of fiduciary duty.
Former Clients’ Contention
Among other grounds, they alleged in their September 14, 2023 amended complaint that the lawyer failed to maintain confidences by publicly proclaiming, in the form of the motions, that Jamgotchian and his companies owed him money, saying:
“[T]he papers filed by Defendants disclosed to the court and Plaintiff’s adversaries in the Prior Action that Plaintiffs had purportedly breached the Wagenseller fee agreement. Plaintiffs did not consent to Defendants’ disclosure of the alleged breach in a public filing as there was no breach of the fee agreement. An attorney owes a duty of loyalty to his or her client. An attorney must protect his client in every possible way and must not assume a position antagonistic to his client.”
Bowick found that the first prong of the anti-SLAPP statute, Code of Civil Procedure §425.16—that the action springs from protected conduct—was met, but ruled that Wagenseller failed to satisfy his burden under the second prong: showing the probability of prevailing on the merits.
Appellant’s Assertion
Wagenseller argued on appeal:
“[R]espondents cannot show that the motions to be relieved and application caused the disclosure of confidential information to the trial court, opposing parties, or their counsel. The three motions were prepared and filed by Wagenseller’s firm using standard Judicial Council Form motions that disclosed no details at all regarding the reasons behind the breakdown of the attorney-client relationship, or the fee dispute….
“By contrast, Jamgotchian’s publicly filed opposition divulged to the trial court, to opposing counsel, and to the public, far more detail concerning the fee dispute….The respondents’ opposition laid out their fee dispute issues to for the public to view….To the extent respondents contend there was a disclosure of their feed dispute, their injury is self-inflicted. The harm was not caused by Wagenseller’s petitioning activity.”
Egerton’s Opinion
Egerton pointed to subds. (b)(4) and (b)(5) of the Rules Professional Conduct, rule 1.16. which enumerates permissible causes for withdrawing. The jurist said:
“By stating the circumstances under which an attorney may withdraw, the rules imply an attorney may not withdraw for other reasons.”
(The reasons include, in (b)(5), “the client breaches a material term of an agreement with, or obligation, to the lawyer relating to the representation.”)
Egerton also cited California Rules of Court, rule 3.1362(c) which says that in seeking to withdraw, the attorney must file a declaration stating the reasons “in general terms and without compromising the confidentiality of the attorney-client relationship.” She wrote:
“Jamgotchian presented sufficient evidence showing Wagenseller breached these duties when he filed the motions and application to withdraw. Wagenseller’s motions and application stated—or at least implied—that he was withdrawing, in part, because Jamgotchian had breached the parties’ fee agreement. According to Jamgotchian. he did not consent to Wagenseller disclosing the existence of their fee dispute. Therefore, a reasonable trier of fact could conclude Wagenseller’s reference to the dispute in public filings constituted a breach of his duty not to disclose confidential information compromising the confidentiality of the attorney-client relationship.”
There is no discussion in the opinion as to whether Evidence Code §958 is germane. It provides: “There is no privilege under this article as to a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.”
Egerton said that a reasonable trier of fact could also find that Wagenseller acted without good cause in moving to withdraw—noting that “the amount of unpaid fees was relatively small, Jamgotchian intended to pay them, and Wagenseller had accepted late payment in the past—and that the lawyer gave insufficient warning of his intent to remove himself from the case. There is, she found, evidence of damage, refuting Wagenseller’s contrary assertion.
Motion Not Barred
Egerton agreed with Wagenseller on one point, in connection with §425.16’s first prong: that his activity in petitioning to withdraw is protected activity. Rejecting Jamgotchian’s argument that an anti-SLAPP motion is never appropriate in an attorney malpractice case, she wrote:
“[N]ot all claims against attorneys brought by former clients fall outside the anti-SLAPP statute,” explaining:
“Here, Jamgotchian does not bring the sort of ‘garden-variety’ malpractice claims that courts have excluded from the anti-SLAPP statute. In a garden-variety malpractice claim, the attorney’s liability arises out of actions taken on the plaintiffs behalf….However, where an attorney moves to withdraw without the client’s consent—as Wagenseller allegedly did here—the attorney effectively is acting on his own behalf, not on behalf of the client.”
However, as to the second prong, she declared:
“While far from overwhelming. Jarngotchian presented sufficient evidence to establish the minimal merit required to survive an anti-SLAPP motion to strike.”
The case is Jamgotchian v. Wagenseller, B333376.
Copyright 2025, Metropolitan News Company