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Keywords

contractlawsuitsettlementbreach of contractdamagesattorneynegligencemotionsummary judgmentfiduciarymalpracticewillcompliancelegal malpracticefiduciary dutybreach of fiduciary duty

contractsettlementbreach of contracttortplaintiffdefendantattorneynegligencestatutemotionsummary judgmentfiduciarymalpracticewilllegal malpracticefiduciary dutyduty of loyaltybreach of fiduciary duty

Related Cases

Knight v. Aqui, 966 F.Supp.2d 989

Facts

William E. Knight filed a legal malpractice action against his former attorneys, Diane Aqui and Mark D. Jordan, alleging professional negligence, breach of fiduciary duty, breach of contract, conversion, and negligent misrepresentation. Knight retained Aqui and Jordan in March 2007 under a contingency fee agreement, which did not comply with California statutory requirements. After settling a case for $550,000, Aqui misappropriated funds by taking her fee before distributing the remaining settlement proceeds to Knight, leading to the current lawsuit.

Plaintiff William Knight filed this action in December 2011 against his former attorneys, Defendants Diane Aqui and Mark D. Jordan. Plaintiff also named Jordan's estate as an additional Defendant, as Jordan is now deceased. The operative First Amended Complaint, (“FAC”), ECF No. 14, asserts five causes of action: professional negligence, breach of contract, fraudulent misrepresentation, conversion, and breach of fiduciary duty.

Issue

Did Diane Aqui commit legal malpractice by misappropriating settlement funds and failing to comply with the statutory requirements for contingency fee agreements?

Rule

An attorney's duty to a client includes the obligation to comply with statutory requirements for contingency fee agreements and to distribute settlement funds in accordance with the terms of the agreement.

An attorney's duty to the client is 'governed by the Rules of Professional Conduct, and [ ] those rules, together with statutes and general principles relating to other fiduciary relationships, ‘help define the duty component of the fiduciary duty which an attorney owes to his client.’”

Analysis

The court determined that Aqui's actions constituted a breach of her fiduciary duty and professional negligence, as she unlawfully misappropriated funds that belonged to Knight. The contingency fee agreement was found to be voidable due to non-compliance with California law, and the court held that Aqui was liable for the full amount of damages claimed by Knight.

The Court concludes that Aqui unlawfully misappropriated funds to which Knight, her client, was entitled, in breach of her fiduciary duty and duty of loyalty to him, and in breach of the tort law duty she owed him as his attorney.

Conclusion

The court granted Knight's motion for partial summary judgment, holding that Aqui was liable for professional negligence, breach of fiduciary duty, conversion, and negligent misrepresentation.

The Court granted Knight's motion for partial summary judgment, holding that Aqui was liable for professional negligence, breach of fiduciary duty, conversion, and negligent misrepresentation.

Who won?

William E. Knight prevailed in the case because the court found that Aqui unlawfully misappropriated funds and breached her fiduciary duty.

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