Opinion ID: 3052575
Heading Depth: 3
Heading Rank: 5

Heading: The ARCO Litigation

Text: On August 10, 2001, ARCO filed an action in Washington state court against BFG, Jeffrey and Amy Bertelsen, and Dr. and Mrs. Bertelsen (Jeffrey Bertelsen’s parents). ARCO claimed the Bertelsens and BFG defaulted on loan agree- 5 Nevertheless, Appellants seek to recover the entire $142,500 fee from Harris and his firm in this action. 10260 BERTELSEN v. HARRIS ments. ARCO further claimed the loans were personally guaranteed by Jeffrey and Amy Bertelsen, as well as by Dr. and Mrs. Bertelsen. At the time the action was filed, none of the Bertelsens recalled Dr. and Mrs. Bertelsen as having personally guaranteed the loans. Dr. Bertelsen knew Harris was representing his son in the ARCO lawsuit. After he was served with ARCO’s complaint, Dr. Bertelsen contacted Harris and set up a meeting in September 2001. Prior to the meeting, Harris sent a letter dated August 30, 2001, to Dr. and Mrs. Bertelsen enclosing documents that ARCO’s counsel provided to Harris that “purport[ed] to be” personal guarantee agreements signed by Dr. and Mrs. Bertelsen. Harris stated he had “some question about the validity of these signatures.” At the September 2001 meeting, Harris “discussed potential conflicts that could arise in representing all the Bertelsens and suggested to Dr. and Mrs. Bertelsen that they confer with their own counsel to evaluate whether they should be separately represented.” During the meeting, Harris explained “the possible conflict that might arise in the future if the Bertelsen family clients did not agree upon a trial strategy or began ‘finger pointing’ at one another.” Harris did not recall whether he discussed with the Bertelsens the potential conflict of interest between Dr. and Mrs. Bertelsen as guarantors, and Jeffrey and Amy Bertelsen as debtors. After the meeting, Harris sent Dr. and Mrs. Bertelsen a letter dated September 7, 2001, to “confirm[ ] the substance” of their meeting. Harris noted his firm had been retained to defend the interests of Dr. and Mrs. Bertelsen, as well as Jeffrey and Amy Bertelsen and BFG. He further stated: “We understand those interests to be, in large part, identical and I understand that you have waived any conflict that may arise. At this point in time I am not aware of any such conflict, and have so informed you.” BERTELSEN v. HARRIS 10261 The letter enclosed the firm’s retainer agreement, which Dr. and Mrs. Bertelsen signed and returned.