Title: Beck v. Wecht
Citation: N/A
Docket Number: S099665
State: California
Issuer: California Supreme Court
Date: June 27, 2002

1
Filed 6/27/02  (Publishers:  This opinion should follow the companion case, Musser v. Provencher.)
IN THE SUPREME COURT OF CALIFORNIA
DANIEL BECK,
)
)
Plaintiff, Cross-defendant,
)
       S099665
and Respondent,
)
)         CA 1/3 A092221
v.
)City & Co. of San Francisco
)       Super.Ct.No. 999980
RONALD H. WECHT et al.,
)
)
Defendants;
)
)
AMERICAN EQUITY INSURANCE COMPANY,
)
)
Intervener and Appellant.
)
)
DANIEL BECK,
)          CA 1/3 A092636
)
Plaintiff and Appellant,
)
)
v.
)
)
RONALD H. WECHT et al.,
)
)
Defendants and Respondents.
)
                                                                                                  )
The question presented by this case is whether one cocounsel may sue
another for breach of fiduciary duty on the theory that the latter’s malpractice in
handling their mutual client’s case reduced or eliminated the fees the former
expected to realize from the case.  There is a split of authority on this question.
Pollack v. Lytle (1981) 120 Cal.App.3d 931 (Pollack) recognized such a fiduciary
2
duty, but Joseph A. Saunders, P.C. v. Weissburg & Aronson (1999) 74
Cal.App.4th 869 (Saunders) rejected it as potentially inconsistent with counsel’s
overriding duty to the client.  Like the Court of Appeal in the present case, we
agree with Saunders that it would be contrary to public policy to countenance
actions based on the theory that cocounsel have a fiduciary duty to protect one
another’s prospective interests in a contingency fee.
I.  FACTUAL AND PROCEDURAL BACKGROUND1
In 1992 Michael and Robert Stephens hired Attorney Daniel Beck to
represent them in a lawsuit against General Motors, to recover for serious injuries
the Stephenses sustained when the pickup truck they were riding in rolled over and
burst into flames.  With the Stephenses’ consent, Beck associated Texas Attorney
L.L. McBee into the case, because McBee had experience prosecuting what were
known as “side-saddle” gas tank cases against General Motors.  Again with
agreement of the clients, McBee and Beck associated Attorney Ronald Wecht and
his law firm, Walkup, Melodia, Kelly & Escheverria (collectively Wecht), as local
trial counsel.  By separate written agreements, it was agreed that McBee would
advance all costs, and Beck’s contingent fee would be split 53 percent for McBee
and 47 percent for Beck.  Wecht was to receive 10 percent of the contingent fee, to
be shared pro rata from the shares of McBee and Beck.
Despite attempts at pretrial settlement, no settlement was reached, and the
case proceeded to jury trial in April 1997.  During the course of the trial, General
Motors offered to settle the case for $6 million.  On the night before closing
arguments, the Stephenses met with Wecht and McBee and told them they wanted
                                                
1 
We adopt the Court of Appeal’s statement of the factual and procedural
background as part I of our opinion.  No party petitioned for rehearing to suggest
that the Court of Appeal omitted or misstated any material fact.  (Cal. Rules of
Court, rule 29(b)(2).)  Brackets enclosing material (other than parallel citations)
denote insertions or additions by this court.
3
to settle the case.  McBee was to contact General Motors and discuss settlement,
but never did so.  In late June of 1997, the jury returned a defense verdict.
In the months leading up to trial, the relationship between Beck and the
other attorneys, particularly McBee, eroded.  McBee accused Beck of
undermining settlement negotiations, and Beck accused McBee of alienating him
from his clients.  By the time of trial Beck was an observer, not a participant.
After trial, the Stephenses brought a legal malpractice action against McBee
and Wecht for failing to carry out their settlement instructions.[2]  In addition, they
claimed that Wecht was vicariously liable for McBee’s misconduct based upon
joint venture principles.  The Stephenses brought no action against Beck.  McBee
settled with the Stephenses for a confidential sum.  As a condition of settlement,
Beck was paid $224,000 out of this sum, in exchange for a release of his claims
against McBee.  Thereafter, Wecht admitted that McBee was negligent in his
handling of the Stephenses’ case.  Although Wecht denied that a joint venture
existed, his malpractice insurance carrier, American Equity Insurance Company
(American Equity), paid $1.4 million to settle the Stephenses’ claims against
Wecht.
In December 1998, Beck filed a complaint against Wecht for breach of
fiduciary duty to recover the fee he would have received had McBee and Wecht
followed the Stephenses’ instructions and settled the case against General Motors
for $6 million.  In July 1999, Wecht filed a cross-complaint for indemnity, breach
of fiduciary duty, comparative fault and breach of contract.  Thereafter, American
Equity intervened and sued Beck in subrogation, seeking contribution from Beck
toward the settlement amount it paid on Wecht’s behalf.  Each party successfully
moved for summary judgment of the other’s claims.  Both parties timely appealed
                                                
2
[Beck did not represent the Stephenses in the malpractice action against
McBee and Wecht.]
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from the orders granting summary judgment, and [the Court of Appeal]
consolidated the appeals for oral argument and decision.
[In Beck’s appeal (case No. A092636), the Court of Appeal affirmed the
trial court’s entry of summary judgment in favor of Wecht.  In American Equity’s
appeal (case No. A092221), the Court of Appeal affirmed the trial court’s entry of
judgment in favor of Beck.  We granted Beck’s petition for review; American
Equity did not petition for review.]
II.  DISCUSSION
As was mentioned, there is a split of authority with regard to the question
whether one cocounsel may sue another for breach of fiduciary duty on the theory
that the latter’s malpractice in handling their mutual client’s case reduced or
eliminated the fees the former expected to realize from the case.  Pollack, supra,
120 Cal.App.3d 931 recognized such a fiduciary duty, while Saunders, supra, 74
Cal.App.4th 869, rejected it as potentially inconsistent with counsel’s overriding
duty to the client.
A. 
Pollack:  Recognizing Fiduciary Duty Among Cocounsel
In Pollack, supra, 120 Cal.App.3d 931, Pollack sued Lytle for breach of
fiduciary duty, fraud, breach of contract, legal malpractice, and declaratory relief
arising out of their joint representation of a client in a medical malpractice action.
According to the allegations of the complaint, Pollack filed the medical
malpractice action, but, because of a malpractice crisis, found it extremely difficult
to secure a neurosurgeon to testify on the client’s behalf.  Lytle initiated
discussions with Pollack in which he made the following false representations:
that he was a close personal friend of a board-certified neurosurgeon who would
be willing to testify on behalf of the client, but who would only do so if Lytle
served as trial counsel; that he was employed by a law firm specializing in medical
malpractice cases; and that he was experienced in the preparation and trial of such
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cases.  On the basis of these false representations, Pollack associated Lytle as trial
counsel and agreed that Lytle would receive one-third of Pollack’s 50 percent
contingency fee.  Lytle thereafter falsely represented to Pollack that in his
deposition the neurosurgeon had testified that violations of standard professional
practice by the treating physician and the hospital were the proximate cause of the
client’s quadriplegia, whereas, in fact, the issue of proximate cause had not even
been addressed in the neurosurgeon’s testimony.  On the basis of this
misrepresentation, among many others, Pollack advised the client to reject a
settlement offer.  The jury returned a verdict in favor of the malpractice
defendants, and Lytle then induced the client to file a legal malpractice action
against Pollack.  (Pollack, at pp. 936-939.)
The Court of Appeal concluded, over a strongly worded dissent, that
Lytle’s relationship to Pollack as associate counsel was governed by agency
principles, and that Lytle had breached his fiduciary duty to Pollack, entitling
Pollack to indemnification.  (Pollack, supra, 120 Cal.App.3d at pp. 940-943.)
Although it acknowledged “the growing body of law which holds, as a matter of
public policy, that a successor attorney owes no duty to his predecessor
[citations]” (id. at p. 942), the majority found the policy rationale of those cases
inapplicable to cases involving associate or concurrent counsel.  “The roles of
successor and associate attorneys are decidedly different.  In the fulfillment of his
duty of undivided loyalty to the client, a successor attorney must view the client’s
situation as of the moment when he is engaged.  Hence public policy requires that
he not be subjected to any possible conflict of interest which may deter him from
determining the best interests of the client by the possibility that he may be held
liable for his acts by his predecessor.  [Citation.]  In contrast, an associate attorney
acting as the agent of the principal attorney replaces no one, but acts at the behest
of his principal.  [¶]  Admittedly, he remains bound to act in the best interests of
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the client, but this creates no unavoidable conflict.  Should he find that the
principal attorney’s actions to date pose a potential danger to the client’s best
interests, the agent-associate is dutybound to make the fullest disclosure of these
material facts to the principal attorney.  Since the principal attorney and the
associate attorney each owes the same duty of loyalty to the client, the disclosure
of information which reveals a potential danger to the client’s interests will
normally prompt the principal attorney to act in protection of those interests.
However, should the principal attorney choose to ignore the client’s interests, the
agent-associate remains free to terminate the agency relationship and withdraw as
associate counsel.  Furthermore, the associate attorney’s duty to exercise
reasonable professional care, skill and diligence on behalf of the client is precisely
equivalent to the duty he owes his principal in dealing with the subject matter of
the agency.  Accordingly, public policy considerations do not mandate that an
associate attorney remain free from liability for a breach of duty owed to his
principal.  To the contrary, whether associate counsel is brought in from outside
the principal attorney’s office or is the junior associate in a firm of attorneys, the
problems inherent in allowing an agent-associate to act in conflict with or
contradiction of the principal attorney are manifest.  Holding that an associate
attorney owes no duty to anyone but the client would create the potential for a
battle of wills over promotion of the client’s interests, a situation which could well
rebound to the client’s detriment, for the determination of the client’s best interests
is at best a subjective value judgment upon which reasonable minds could differ.
Moreover, in view of the principal attorney’s liability for the acts of subordinate
counsel under the doctrine of respondeat superior, it would be manifestly unfair to
relieve an agent-associate of accountability to his principal.”  (Id. at pp. 942-943.)
Justice Johnson dissented from the majority on the ground that no rational
distinction could be made between the duties running to successor attorneys and
7
those running to cocounsel.  “There is a substantial body of law concerning the
liability of attorneys who sue each other in connection with common clients.  A
fiduciary relationship has not heretofore been recognized, and, regardless of legal
theory asserted, there has emerged a recurring theme; a client’s right to the
undivided loyalty of his or her attorneys must be protected, even when the result
of such rule is the denial of an attorney’s cause of action against another attorney.”
(Pollack, supra, 120 Cal.App.3d 931, 945 (dis. opn. of Johnson, J.).)  “Regardless
of context, the underlying rationale . . . , that the possibility of a cause of action for
indemnity in legal malpractice cases, whether sought against a predecessor or
successor attorney, would create such potentially burdensome conflicts of interest
for an attorney representing a client, public policy dictates that such a cause of
action should be barred.”  (Id. at p. 948.)  Recognizing a fiduciary duty between
cocounsel would increase the exposure of attorneys to liability, Justice Johnson
concluded, “placing them in an untenable position of divided loyalties to their
clients and associated counsel.”  (Id. at p. 949.)
B.
Saunders:  Rejecting Fiduciary Duty Among Cocounsel
In Saunders, supra, 74 Cal.App.4th 869, the plaintiff, an attorney, and the
defendant, another law firm, had jointly represented a group of hospitals in the
underlying action against the Medicare program.  The plaintiff attorney alleged
various causes of action based on the premise that the defendant law firm had
breached certain duties owed to him by influencing the hospitals to accept a
settlement that was, because of their differing fee agreements with the several
hospitals, more favorable to the defendant than it was to the plaintiff.  Following
the grant of summary judgment in favor of the defendant, the plaintiff appealed.
(Id. at pp. 870-871.)  For guidance in resolving the tension between the duties that
cocounsel unquestionably owe their mutual client and the duties they assertedly
owe one another, the Saunders court looked to two cases—Pollack, supra, 120
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Cal.App.3d 931 and Mason v. Levy & Van Bourg (1978) 77 Cal.App.3d 60
(Mason).
In Mason, the plaintiff attorney alleged that he had transferred two cases to
the defendant attorneys on the written understanding he would share in the
contingency fee the client had agreed to pay; that the defendants failed to exercise
their best efforts to either settle the cases or bring them to trial prior to the running
of the statute of limitations; and that as a result of the defendants’ misconduct, the
plaintiff lost his share of the fee the cases should have yielded.  (Mason, supra,
77 Cal.App.3d at pp. 63-64.)  The Mason court rejected the assertion that the
defendants owed the plaintiff a duty.  “It is fundamental to the attorney-client
relationship that an attorney have an undivided loyalty to his clients.  [Citation.]
This loyalty should not be diluted by a duty owed to some other person, such as an
earlier attorney.  While, as a practical matter, both the client and the former
attorney stand to benefit from any recovery in the client’s action, their interests are
not identical.  For example, in the cases transferred from plaintiff to defendants
there was a cross-action against the client, Mr. Lawson.  Depending on the
circumstances, the client’s interests may best be served by withdrawing from the
dispute and allowing the statute of limitations to run.  On the other hand, the
former attorney, not exposed to any potential liability on the cross-action, may
prefer to gamble for any recovery by pursuing the matter to settlement or
judgment.  It would be inconsistent with an attorney’s duty to exercise
independent professional judgment on behalf of his client to impose upon him an
obligation to take into account the interests of predecessor attorneys.”  (Id. at pp.
66-67.)
The Mason court noted the adverse consequences that would flow from the
recognition of the asserted duty.  “If the law were to recognize duties, such as are
suggested here, between successive attorneys representing the same client, a
9
multitude of litigation could be spawned with an attendant adverse impact on
attorney-client relationships.  Every lawyer could blame his problems in a lawsuit
on his predecessors.  Every lawyer referring a case to another lawyer would be in a
position to claim that the negligence of the second lawyer caused a meritorious
claim to be lost or settled for an insufficient amount.  Public confidence in the
legal system may be eroded by the spectacle of lawyers squabbling over the could-
have-beens of a concluded lawsuit, even when the client has indicated no
dissatisfaction with the outcome.  Considerations of public policy support the
conclusion that an attorney’s duty of undivided loyalty to his client should not be
diluted by imposing upon him obligations to the client’s former attorney, or at
least obligations greater than the client himself owed to the former attorney.”
(Mason, supra, 77 Cal.App.3d at p. 67, fn. omitted.)
As we discussed above, the majority in Pollack found the policy rationale
of Mason inapplicable to the situation of associate counsel.  “The roles of
successor and associate attorneys are decidedly different.  In the fulfillment of his
duty of undivided loyalty to the client, a successor attorney must view the client’s
situation as of the moment when he is engaged.  Hence public policy requires that
he not be subjected to any possible conflict of interest which may deter him from
determining the best interests of the client by the possibility that he may be held
liable for his acts by his predecessor.  [Citation.]  In contrast, an associate attorney
acting as the agent of the principal attorney replaces no one, but acts at the behest
of his principal.”  (Pollack, supra, 120 Cal.App.3d at p. 942.)
The Saunders court was not convinced by the Pollack majority.  “With all
due respect . . . , we do not find this analysis persuasive.  The duty of both the
associate and the successor attorney is the same:  to serve the best interests of the
client.”  (Saunders, supra, 74 Cal.App.4th at p. 873.)  “[R]ecognizing a duty on
the part of cocounsel as urged by Saunders would be inconsistent with counsel’s
10
duty to exercise independent judgment on behalf of the client.  Saunders argues
that here, Weissburg’s duty to its clients was precisely the same as its duty to
cocounsel, so that Weissburg was faced with no conflict.  Yet the record indicates
that the clients were satisfied with Weissburg’s representation, while Saunders
was not.  That surely indicates that recognition of a duty on the part of Weissburg
to its cocounsel potentially conflicts with Weissburg’s duty to its clients of
undivided loyalty and total devotion to their interests.  Indeed, the Mason court
envisioned just this situation in observing that ‘Public confidence in the legal
system may be eroded by the spectacle of lawyers squabbling over the could-have-
beens of a concluded lawsuit, even when the client has indicated no dissatisfaction
with the outcome.’  (Mason v. Levy & Van Bourg, supra, 77 Cal.App.3d at p. 67.)”
(Saunders, at p. 874.)
C.
Public Policy Concerns: Avoiding Conflicts of Interests and Protecting 
the Confidentiality of Attorney-client Communications
Recognizing a fiduciary relationship among cocounsel, the Pollack
majority concluded, “creates no unavoidable conflict” between the duty cocounsel
would owe one another and the duty cocounsel would owe their mutual client.
(Pollack, supra, 120 Cal.App.3d at p. 942.)  “[S]hould the principal attorney
choose to ignore the client’s interests,” the Pollack majority argued, “the agent-
associate remains free to terminate the agency relationship and withdraw as
associate counsel.”  (Ibid.)  However, as the dissent pointed out, withdrawal might
well conflict with the duties an attorney owes his client, including those imposed
by former rule 2-111, now rule 3-700, of the Rules of Professional Conduct of the
State Bar of California, which prohibit an attorney from withdrawing as counsel
without consent of the court and where the client would be prejudiced.  (Pollack,
supra, 120 Cal.App.3d 931, 948-949 (dis. opn. of Johnson, J.).)  Rule 3-700(C)(3)
allows withdrawal where “inability to work with co-counsel indicates that the best
11
interests of the client likely will be served by withdrawal.”  If the associate
attorney really believes the principal attorney is not acting in the client’s best
interests, it is difficult to understand how the associate attorney could conclude the
client’s best interests would be served by his withdrawal.
Saunders is an example of the sort of case in which the potential for
conflict is palpable.  In Saunders, while the hospitals, the mutual clients, were
satisfied with the settlement of their lawsuit against the Medicare program, the
plaintiff attorney complained that his cocounsel had structured the settlement in a
manner that maximized his own fees by favoring hospitals not subject to the
contingency fee agreement between the cocounsel.  (Saunders, supra, 74
Cal.App.4th at pp. 870-871, 874.)  Structuring the settlement differently might
have better satisfied the aggrieved cocounsel, but to the detriment of the clients.
The most cynical views of the legal profession would be confirmed by recognition
of a fiduciary duty on the part of cocounsel to maximize one another’s fees.
Like the Saunders court, the Court of Appeal in this case found Mason
more persuasive than Pollack.  “We, too, are convinced that the policy reasons
expressed in Mason are valid in the cocounsel context presented here.  As
happened in Saunders, cocounsel Beck’s dissatisfaction with the handling of the
Stephenses’ case by Wecht and McBee points up the myriad conflicts that may
arise among attorneys representing the same clients, and the resulting inability to
consider only the clients’ best interests.  To avoid any detriment to the jointly
represented client, it is imperative that no collateral duties arise to interfere with
the duty of ‘undivided loyalty and total devotion’ owed to the client.  (Saunders,
supra, 74 Cal.App.4th at p. 874[, quoting Mason, supra, 77 Cal.App.3d at p. 67].)
Thus, the trial court correctly granted summary judgment for Wecht, because, as a
matter of law, he owed no fiduciary duty to Beck.”
12
Beck objects there was, in fact, no conflict in this case between the duty
that his cocounsel Wecht assertedly owed him and the duty Wecht unquestionably
owed their mutual clients, the Stephenses—Wecht owed both of them a duty to
follow the Stephenses’ settlement instructions.  However, in fact, irreconcilable
conflicts among the three cocounsel arose much earlier, and by the time the
underlying case was tried, during which the settlement offer was made, Beck had
become “an observer, not a participant.”  Significantly, McBee accused Beck
himself of undermining settlement negotiations, while Beck accused McBee of
alienating him from his clients.
With regard to the concern that the attorney-client privilege might be
jeopardized, Beck argues that the attorney-client privilege was not jeopardized in
this case because the clients, the Stephenses, waived the privilege by filing
malpractice actions against Wecht and McBee, by testifying about their
communications with Wecht and McBee in their depositions, and by failing to
object when Wecht testified about his communications with them in his
deposition.  Wecht concedes “it happened in this case that the clients waived the
[attorney-client] privilege, and that the work product privilege was not a factor.”
However, Wecht points out, it will not always be the case that the client will waive
the privilege by filing a malpractice suit.  Indeed, the clients in Saunders were
satisfied with the representation afforded them by the attorney sued by his
cocounsel for breach of fiduciary duty.  (Saunders, supra, 74 CalApp.3d at p.
874.)
Beck’s effort to distinguish his case on the facts raises a fundamental
question.  Should this issue—whether cocounsel owe one another a fiduciary duty
to conduct their joint representation in a manner that does not diminish or
eliminate the fees each expects to collect—be decided on a case-by-case basis?
We think not.  The better approach, we conclude, is a bright line rule refusing to
13
recognize such a fiduciary duty.  Accordingly, we disapprove Pollack v. Lytle,
supra, 120 Cal.App.3d 931, insofar as it is inconsistent with the views expressed
herein.
III.  DISPOSITION
The judgment of the Court of Appeal is affirmed.
BROWN, J.
WE CONCUR:
GEORGE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Beck v. Wecht
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 90 Cal.App.4th 162
Rehearing Granted
__________________________________________________________________________________
Opinion No. S099665
Date Filed: June 27, 2002
__________________________________________________________________________________
Court: Superior
County: San Francisco
Judge: Ronald Evans Quidachay
__________________________________________________________________________________
Attorneys for Appellant:
Drath, Clifford, Murphy, Wennerholm & Hagen, John M. Drath and Raymond Z. Bacerdo for Intervener
and Appellant American Equity Insurance Company and for Defendants and Respondents Ronald H.
Wecht et al.
__________________________________________________________________________________
Attorneys for  Respondent:
M. Armon Cooper; Carlson, Calladine & Peterson, Guy D. Calladine and Henry Chun for Plaintiff, Cross-
defendant and Respondent and for Plaintiff and Appellant Daniel Beck.
15
Counsel who argued in Supreme Court (not intended for publication with opinion):
John M. Drath
Drath, Clifford, Murphy, Wennerholm & Hagen
1999 Harrison Street, Suite 1900
Oakland, CA  94612-3578
(510) 287-4000
M. Armon Cooper
244 Jackson Street, Suite 300
San Francisco, CA  9411
(415) 362-6000