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Residents want to recover attorney costs

February 01, 2009|Stephen Glassman and Donie Vanitzian

Question: I live in a senior community. Some owners and directors won a Small Claims Court action against our association for failure to provide books and records. Our association attorneys convinced the board that it could overturn the decision. Without a vote by owners, our board sued in Superior Court and lost. Attorneys took the case all the way to the state Supreme Court, which denied it review.

This exercise in futility has amounted to more than $1 million in legal fees. By smooth talk, inappropriate information and exaggerations, the lawyers swayed board directors into pursuing repeated litigation. These attorneys frightened legally unsophisticated residents by saying that dire lawsuit consequences would destroy our community's solvency. We're furious. What can we do?

Answer: It's time to investigate hiring another lawyer -- one specializing in attorney negligence. If it can be shown that your association's lawyers knew or should have known that what they were doing was wrong, inappropriate for your situation or legally frivolous, you may be able to recover at least some, perhaps all, of the money wasted on them.

Obtain copies of the retainer agreements between your association and each of the attorneys involved in the case. Carefully review what the attorneys said or wrote to the board and other owners, and compare that with the agreements. For oral representations, obtain affidavits from witnesses as to what was promised.

The conduct you describe may have violated the Rules of Professional Conduct, 1-400(D) and 1-400(E). If they made false, misleading or deceptive statements, they may also have violated Business and Professions Code Section 6157.1.

Consult two or even three attorneys specializing in malpractice and with a reasonable record of trial success.

Your attorneys had a duty to act in the association's best interests. When they predicted "dire consequences" as the outcome for not taking their advice, a diligent board should have obtained a second opinion.

Send the lawyers and the law firms a letter demanding they return fees paid for unnecessary work. Consider hiring an independent company that analyzes legal bills to unearth excesses such as inappropriate rates, double staffing, over-lawyering, unverified hours and questionable expenses.

File a complaint with the California State Bar ( www.calbar.ca.gov) and enclose copies of the witness affidavits. Inquire whether the association or owners are eligible for any victim recovery funds through the state bar.

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Send questions to Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.

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