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Trembath v. Digardi
Citations: 43 Cal. App. 3d 834; 118 Cal. Rptr. 124; 1974 Cal. App. LEXIS 1360Docket: Civ. 33149
Court: California Court of Appeal; December 12, 1974; California; State Appellate Court
An attorney, James Trembath, filed a lawsuit against other attorneys (defendants) for allegedly inducing his client, Mrs. Gordon, to breach a contingent fee contract after her husband's wrongful death in 1970. The defendants demurred, claiming the statute of limitations had expired, which the court upheld without allowing amendments, leading to dismissal of the case. Trembath's complaint stated that he was hired by Mrs. Gordon on the day of her husband's death and that he had performed legal services and incurred expenses. The defendants reportedly made false claims to Mrs. Gordon to persuade her to hire them instead, resulting in her discharging Trembath on April 28, 1970. The defendants later settled her case for $400,000 in 1972. Trembath filed his complaint on January 4, 1973, but the court found that the cause of action accrued when Mrs. Gordon discharged him, which was more than two years prior to filing. Trembath contended that his cause of action could not accrue until a recovery was realized from the defendants, arguing that the general rule regarding accrual did not apply to contingent fee contracts. However, the court determined that the breach occurred at the time of discharge, affirming the dismissal based on the statute of limitations. The attorney's claim against a client is fundamentally contractual, based on either a written contingency agreement or a quasi-contractual obligation for reasonable value of services provided. However, the present case involves a tort action against a third party accused of wrongfully inducing a breach of an attorney-client relationship. While a valid attorney-client contract is necessary for both actions, the liability rules for clients in contingent fee agreements are designed to protect clients from potential overpayment and allow them to terminate representation when confidence in their attorney wanes. No analogous protections exist for third parties who improperly induce breaches of such contracts. The distinction between claims against clients and third-party tortfeasors is supported by case law, including Herron, which affirms that an attorney's interest in a contingent fee exceeds that of a party to a terminable contract, thereby enabling action against those who intentionally interfere with that right. The court concludes that the tort claim against the third party is separate from the contractual rights against the client, with the cause of action accruing at the time of the breach induced by the third party. Consequently, the demurrer was correctly upheld, and the Fracasse decision does not apply to this tort action. The appellant's attempt to argue estoppel based on Fracasse is ineffective as there are no allegations of misrepresentation or omission by the respondents. Thus, the tort action remains distinct from any contract claim against the client, confirming that Fracasse does not influence the accrual date or damage measurement. The judgment is affirmed.