Copp v. Breskin
| Decision Date | 11 December 1989 |
| Docket Number | No. 23265-7-I,23265-7-I |
| Citation | 56 Wn.App. 229,782 P.2d 1104 |
| Court | Washington Court of Appeals |
| Parties | Harley COPP, Respondent, and Arndt & Associates, Ltd., an Arizona corporation, Plaintiff, v. Howard B. BRESKIN and Jane Breskin, his wife; Arnold B. Robbins and Jane Doe Robbins, his wife; Breskin & Robbins, a partnership, Appellants, Lloyd A. Herman and Jane Doe Herman, his wife, Defendants. Howard B. BRESKIN and Jane Breskin, his wife; Arnold B. Robbins and Jane Doe Robbins, his wife; Breskin & Robbins, a partnership, Third Party Plaintiffs, v. Henry S. SANFORD and Marcia Sanford, husband and wife, Third Party Defendants. |
Jeffrey S. Laws, Seattle, for Breskin & Robbins.
Gerald G. Day, Bellevue, for Day, Herman & Recor.
Breskin & Robbins, a law firm, appeals a summary judgment in favor of Harley Copp, an expert witness hired by the firm on behalf of a client. Copp successfully claimed $14,789 for expert services.
Breskin & Robbins advised Copp before hiring him that fees "were being paid, and were to be paid" by the client. Copp says he would never accept employment if an attorney's obligation were dependent on reimbursement from a client. He made this policy known.
Breskin & Robbins concedes by way of deposition that, absent an agreement to the contrary, a provider of litigation services can expect an attorney in King County to pay the provider's bill whether or not the client reimburses the attorney. Copp, a California resident, is aware of a similar custom.
Copp sent Breskin & Robbins an initial bill which the firm paid with a "trust check" for $1,424. An accompanying letter assured Copp that any future charges would be paid within 30 days of his testimony. Breskin & Robbins claims it gave the assurance on behalf of the client and did not intend a guaranty. The client paid some of Copp's bills directly while he was in town for the trial. After trial, Copp sent Breskin & Robbins a final bill. He said he expected payment within 30 days, as previously agreed.
Breskin & Robbins replied that the client was willing to pay only 30 per cent of the bill. The firm offered to commence litigation on Copp's behalf, and eventually sued the client on its own behalf. It claimed $37,000 in litigation expenses allegedly incurred at the client's request, including amounts owing to Copp.
Subsequently, Copp filed this action against Breskin & Robbins. Breskin & Robbins admitted the amount owed but averred as an affirmative defense that it hired Copp as agent of a disclosed principal, the client.
Breskin & Robbins relies on dictum to the effect that an attorney, as agent of a client, is not responsible for litigation costs, such as expert witness fees, unless the attorney personally agrees with the litigation service provider to pay them. See Christensen, O'Connor, Garrison & Havelka v. Department of Rev., 97 Wash.2d 764, 769-70, 649 P.2d 839 (1982). The Christensen dictum might be persuasive if it were not for a subsequent case which dealt with the same issue (whether reimbursements for costs advanced on behalf of a client are subject to business and occupation tax) but which disclaimed any ruling on the issue presented in this case. See Walthew, Warner, Keefe, Arron, Costello & Thompson v. Department of Revenue, 103 Wash.2d 183, 190, 691 P.2d 559 (1984). Walthew held, as did Christensen, that reimbursements for litigation costs are exempt from B & O tax because the attorney receiving the reimbursement is not ultimately responsible for those costs. However, Walthew retracted the agency reasoning in Christensen, together with the suggestion that reimbursements might be taxable if an attorney agrees to pay them personally, holding instead that reimbursements for costs are per se exempt from B & O tax. Walthew relied on the Code of Professional Responsibility, now the Rules of Professional Conduct, which forbid attorneys from advancing or otherwise paying the costs of litigation unless the client remains ultimately liable for them. Walthew, at 188, 691 P.2d 559 (discussing DR 5-103, now RPC 1.8(e)).
Washington State Bar Association, Ethics Opinion 140 (1969), states:
[W]hen the attorney has directly and personally ordered or arranged for services in circumstances under which ... the attorney ... did not make it clear (if such were [the] intent) to the person rendering the services that such person must look to the client alone for payment, the attorney has been derelict in ... preserving a good public image of the legal profession. The primary responsibility of making it clear that the attorney acts in an agency capacity with no personal liability rests upon the attorney. If [the attorney] has been derelict herein, others may reasonably be misled into believing that the attorney is agreeing to pay or to guarantee the payment of the obligation so created. In this circumstance it would be the ethical obligation of the attorney to pay such indebtedness and then look to [the] client for reimbursement and assume the risk of nonpayment.
(Emphasis added). The Rules of Professional Conduct prohibit attorneys from using the ignorance of litigation service providers to their financial advantage. Attorneys may not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. RPC 8.4(c). They must prevent or correct misunderstandings when the client's legitimate interests are not jeopardized. RPC 4.1, 4.3. They must avoid means that burden third persons without justification. RPC 4.4. The rules do not "undertake to define standards for civil liability of lawyers", RPC, Preliminary Statement, but that is often a necessary or logical consequence of upholding them. See, e.g., Walthew, at 188, 691 P.2d 559; see also Allard v. First Interstate Bank of Wash., 112 Wash.2d 145, 149-50, 768 P.2d 998 (1989); Tank v. State Farm Fire & Casualty Co., 105 Wash.2d 381, 388-89, 715 P.2d 1133 (1986).
Other jurisdictions are split as to whether an attorney is responsible to an expert or other service provider in the absence of a disclaimer. See Annot., Attorney's Personal Liability for Expenses Incurred in Relation to Services for Client, 66 A.L.R.4th 256 (1988), (replacing annotation at 15 A.L.R.3d 531 (1967)). Since 1955, three jurisdictions deciding the issue as a matter of first impression have reasoned that the attorney is an agent of a disclosed principal and, as such, is not liable unless the attorney expressly or impliedly agrees to be bound. See Free v. Wilmar J. Helric Co., 70 Or.App. 40, 688 P.2d 117, review den'd, 298 Or. 553, 695 P.2d 49 (1984); Hasbrouck v. Krsul, 168 Mont. 270, 541 P.2d 1197 (1975); see also Soro v. Bank of Miami, 537 So.2d 1135 (Fla.App.1989) (). During the same period, nine jurisdictions considering the issue anew or for the first time have held that formal agency reasoning does not accurately reflect the attorney's role as a strategist in litigation or the common understanding of litigation service providers. See Gualtieri v. Burleson, 84 N.C.App. 650, 353 S.E.2d 652, review den'd, 320 N.C. 168, 358 S.E.2d 50 (1987); Ingram v. Lupo, 726 S.W.2d 791 (Mo.App.1987) ( earlier cases); Gaines Reporting Serv. v. Mack, 4 Ohio App.3d 234, 447 N.E.2d 1317 (1982); Theuerkauf v. Sutton, 102 Wis.2d 176, 306 N.W.2d 651 (1981); Molezzo Reporters v. Patt, 94 Nev. 540, 579 P.2d 1243 (1978); C.C. Plumb Mixes, Inc. v. Stone, 108 R.I. 75, 272 A.2d 152 (1971); Roberts, Walsh & Co. v. Trugman, 109 N.J.Super. 594, 264 A.2d 237 (1970); Burt v. Gahan, 351 Mass. 340, 220 N.E.2d 817, 15 A.L.R.3d 527 (1966); see also In re Peters, 332 N.W.2d 10, 17 (Minn.1983) (disciplinary proceeding). The clear trend is to hold the attorney liable. One court, bound by prior cases siding with the attorney, nevertheless expressed the view that the attorney should be liable in the absence of a...
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