The Idaho Supreme Court recently held, in Parkinson v. Bevis, that a client may sue her attorney for breach of a fiduciary duty arising out of the attorney-client relationship, just as any other principal may sue her agent who owes her a fiduciary duty, and seek fee disgorgement as a remedy. Confidential
This holding is a narrow one, in that it offers relief only in those cases in which the client seeks to recover only attorney’s fees. To the extent that clients seek damages as well, the claim becomes a legal malpractice claim.
After reaching a settlement in his client’s divorce action, an attorney forwarded a confidential email to opposing counsel without his client’s knowledge or consent. In the email, the client had accused her attorney of failing to adequately represent her at a mediation conference.
The client subsequently sued her attorney. The district court dismissed the client’s complaint, reasoning that she was essentially bringing a legal malpractice claim, for which she could not prevail because she suffered no damages as a result of the forwarded email. The district court also denied the client’s motion to amend her complaint to clarify that the relief she sought was equitable fee disgorgement.
The Idaho Supreme Court reversed and remanded. In doing so, it adopted both the test it explained in Rockefeller v. Grabow (a case involving a real estate agent who breached a fiduciary duty to a client) and the Restatement (Third) of the Law Governing Lawyers, Section 37, comment d. According to the Restatement, the factors to consider to determine whether a lawyer’s breach warrants fee forfeiture are as follows: (1) the extent of the misconduct; (2) whether the breach involved knowing violation or conscious disloyalty to a client; (3) whether forfeiture is proportionate to the seriousness of the offense; and (4) the adequacy of other remedies.
The Idaho Supreme Court concluded that clients may sue attorneys for breach of a fiduciary duty arising out of the attorney-client relationship and recover attorney’s fees. Honoring this equitable remedy, the Idaho Supreme Court reasoned that sanctioning lawyers by having them forfeit legal fees when they breach their fiduciary duties effectively discourages disloyalty to clients and encourages better quality of service.
Read the full opinion here.
