By Carole J. Buckner
A recent decision, Litinsky v. Kaplan,[1] addresses an important consideration for all litigators regarding whether and to what extent to rely on information received from a client in filing a lawsuit. Typically, a client provides the lawyer with information that the lawyer otherwise finds plausible, and the lawyer files a lawsuit based on the evidence from the client. Sometimes contrary evidence emerges calling into question the client’s information. Opposing counsel may make an assertion that the lawyer should dismiss the case as lacking merit, given the contrary evidence. Under such circumstances, what are the ethical obligations of the lawyer?
Lawyers have duties of competence[2] and diligence[3] in performing legal services. Attorneys also have an obligation not to assert or continue an action without probable cause and for the purpose of harassing or maliciously injuring another person[4] and to maintain only those actions that appear legal and just.[5] In addition, a lawyer can be liable for the tort of malicious prosecution if a plaintiff can show that an action was filed and pursued to a legal termination in favor of the plaintiff, without probable cause and with malice.[6]
In the Litinsky case, attorney Jayne Kaplan represented plaintiff Vadim Harutyunov in a prior lawsuit against Mina Litinsky alleging fraud concerning the payment of a commission on art purchased by persons Harutyunov referred to Litinsky’s gallery. The complaint was based on a written Commission Agreement allegedly signed by the parties and by another attorney Thomas E. Kent. Harutyunov and a third party Armen Petrosyan, a Litinsky customer, gave statements under oath supporting Harutyunov’s position. Litinsky denied signing the Commission Agreement, but Harutyunov testified in deposition that it was genuine. In addition, Kaplan had an expert prepared to testify that the fax header on the contract linked back to Litinsky’s gallery and was genuine. Litinsky had an expert prepared to testify that the fax header and signature were copied from other sources. Attorney Kent also provided a declaration indicating he had not signed the Commission Agreement which was described to but not shared with Kaplan.
Harutyunov fell ill and requested a continuance of the trial. The court granted one continuance but denied a second request. Ultimately the action was dismissed creating the scenario for the instant case in which Litinsky sued attorney Kaplan, Harutyunov and Petrosyan for malicious prosecution and intentional infliction of emotional distress. Kaplan moved to strike the claims against her and the court granted the motion. On appeal, the court agreed that Litinsky could not show a likelihood of success on the malicious prosecution claim. The appellate court affirmed the determination that Kaplan had probable cause to prosecute the prior litigation against Litinsky on behalf of Harutyunov.
Kaplan filed the case based on evidence from her client and a third party. Even though that evidence was contradicted by other evidence from the opposing party, Litinsky, and attorney Kent, the evidence was not “indisputably false.” Kaplan faced a choice: accept her client’s version and continue pursuing the case on behalf of her client, or accept the opposing party’s version. The court indicated that a lawyer is generally entitled to rely on information from a client, unless the lawyer knows the client is not telling the truth. Kaplan did not know Harutyunov to be lying and had evidence from Petrosyan and an expert that Litinsky might be the one lying. Faced with competing evidence, the court said Kaplan could accept Harutyunov’s version, even if Kaplan thought Litinsky was more likely to prevail. The court held that “attorneys have a right to bring a claim they think is unlikely to succeed, so long as it is arguably meritorious.” Therefore, Kaplan “was not obligated to drop her claim simply because her litigation opponent claimed that Kaplan’s client was lying. Indeed, to do so might have been inconsistent with her professional obligations.” Earlier case law suggests it could constitute legal malpractice for an attorney to drop a lawsuit if supporting evidence exists, merely because opposing counsel asserts the action is baseless.[7]
Litinsky argued Kaplan should have dropped the claim after Litinsky’s attorney discussed the contents of a declaration from attorney Kent indicating Kent had not signed the commission agreement. However, Kaplan’s request to see attorney Kent’s declaration was refused, so the court found that Kaplan was not required to simply accept the description of the Kent declaration without seeing it. The court held that Kaplan could rely on information from her client because it was not “indisputably false,” and affirmed the dismissal of the malicious prosecution claim as against Kaplan.
What would the result be if an attorney files a case, and later does find indisputable evidence of falsity? A recent California State Bar ethics opinion provides guidance on how an attorney should proceed if the attorney concludes that the client’s claim lacks merit.[8] The opinion concludes that the attorney must withdraw from representation pursuant to Rule 1.16.[9] Under such circumstances, careful consideration is required to avoid prejudice to the client.
Attorneys may assert claims in reliance on information from their clients, but if it is indisputably false such that the claim lacks merit, dismissal is appropriate.
Carole J. Buckner, Partner and General Counsel at Procopio, Cory, Hargreaves & Savitch, LLP
[1] 2019 WL 4894225 (10/4/2019).
[2] Cal. Rules of Prof. Conduct, Rule 1.1.
[3] Cal. Rules of Prof. Conduct, Rule 1.3.
[4] Cal. Rules of Prof. Conduct, Rule 3.1(a).
[5] Cal. Bus. & Prof. Code § 6068(c); Canatella v. Stovitz (N.D. Cal. 2005) 365 F.Supp.2d 1064, 1077 (supported by law or facts).
[6] Sheldon Appel Co. v. Albers & Oliker (1989) 47 Cal. 3d 863, 871.
[7] Marjanovic v. Gray, York & Duffy (2006) 137 Cal.App.4th 1262, 1272, fn. 5.
[8] Cal. State Bar Formal Op. No. 2019-198 (2019).
[9] Cal. Rules of Prof. Conduct, Rule 1.16(a)(1).
This article as originally published on the SDCBA website. Click here to view.
**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.**