This case involves hundreds of thousands of dollars in fees and millions of dollars in assets in a committed intimate relationship case. The relevant part to lawyers is:
RPC 1.8 Conflict of Interest: Current Client: Specific Rules
(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client . . .
The law firm had represented the client and trial was fast approaching. The law firm withdrew on January 10, 2008. Prior to withdrawing, the law firm had filed liens, the first of which was filed on December 26, 2007.
The lawyer and client negotiated over re-engagement. A new agreement was reached and signed. The new agreement included the execution by the client of a promissory note secured by a lien for past fees and costs in the amount of $775,000.
The CIR case went to trial over a period of 19 days.
The lawyer sued the client on the note; the client counterclaimed, asserting breach of fiduciary duty and legal malpractice. The trial court dismissed the counterclaims on summary judgment and held the agreement and note enforceable.
RPC 1.8 governs transactions between an attorney and a client and prohibits an attorney from participating in business transactions with a client unless certain requirements regarding disclosures are met. But RPC 1.8(a) is only applicable to transactions entered into during the course of the attorney/client relationship. It does not apply prior to the creation of the attorney/client relationship or to items agreed upon during the relationship formation. Because Rafel had previously withdrawn, the note was entered into before the (new) attorney-client relationship was established.
Christina A. Meserve and Charles E. Szurszewski practice family law in Olympia, Washington with the law firm of Connolly Tacon & Meserve.