Donnelly v. Ayer

California Court of Appeal Jul 28, 1986 No. D003697Published

Before: Benke

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Holding. The court held that a mutual release signed by a client after the termination of the attorney-client relationship is a valid and enforceable settlement of a malpractice claim, precluding further litigation.

Issues

Whether the attorney-client relationship had terminated prior to the execution of the release.
Whether the release was obtained through undue influence or coercion.
Whether the settlement of the malpractice claim violated the California Rules of Professional Conduct.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Simply stated, the release precludes the underlying lawsuit and is thus a complete defense to the malpractice action.”

“A member of the State Bar shall not attempt to exonerate himself from or limit his liability to his client for his personal malpractice. This rule shall not prevent a member of the State Bar from settling or defending a malpractice claim.”

Opinion

BENKE, J.

Kevin J. Donnelly appeals a summary judgment favoring defendants Harold G. Ayer, Jr., Phillip L. Ginsburg and the law firm of Ayer and Ginsburg on Donnelly’s complaint for legal malpractice.

Facts

By a retainer agreement signed July 29, 1980, Kevin Donnelly employed the law firm of Ayer and Ginsburg to represent him in an action for personal injuries sustained as a result of an altercation with a bus driver. The retainer agreement provided “ [t]he law firm may withdraw at any time upon giving reasonable notice to the client.” During the representation of Donnelly, Ayer advanced to him approximately $13,000. Donnelly did not prevail at trial.

On October 13, 1983, Ayer wrote to Donnelly, informing him he would no longer be representing him. Ayer advised Donnelly of the availability of a motion for a new trial or an appeal. He also advised him to retain another attorney. One month later Ayer again wrote to Donnelly advising him that he was no longer representing him.

After Ayer informed Donnelly he would not be representing him, Donnelly told Ayer in writing he had consulted another attorney and would be filing a malpractice action against Ayer.

By December 27, 1983, Donnelly had discussed his contemplated malpractice suit with six or seven attorneys, and one attorney informed Donnelly he had a “good case” against Ayer. Donnelly then wrote to Ayer, telling him he was suing him for $10,000. However, Donnelly informed Ayer that

[982]

if Ayer would pay him $10,000,

Donnelly would not file the malpractice action against him.

On January 9, 1984, Donnelly and Ayer signed a mutual release form. By the agreement embodied in it, Donnelly received $1,000 in cash, and in return agreed not to bring a malpractice action against Ayer. Ayer agreed not to pursue collection of sums of money advanced to Donnelly. Ayer’s associate, Brian Dunn, provided the release form to Donnelly and was present when he signed it. Donnelly read the release form before he signed it and signed it of his own free will.

Donnelly v. Ayer

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BENKE, J.

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