Articles Posted in Terminating the Attorney-Client Relationship

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The Supreme Court of Washington has held that a client who sues his former attorney for legal malpractice may not allege that the lawyer’s withdrawal from the underlying case was improper if that withdrawal was approved by a judge.

The court succinctly puts the issue this way:

In this case, former clients are suing their attorneys for legal malpractice based, in part, on the attorneys’ withdrawal from a prior case. But the attorneys obtained that withdrawal by court order. In the original case, the former clients appealed the court’s order approving withdrawal, and that appeal was rejected. The attorneys thus argue that collateral estoppel applies to bar a malpractice action based on their withdrawal. We agree. We hold that the fact of withdrawal by court order in an earlier proceeding is dispositive in a later malpractice suit against the attorney. Although other malpractice complaints unrelated to the withdrawal would not be precluded, a client cannot relitigate whether the attorney’s withdrawal was proper. If we are to have rules permitting attorney withdrawal, we must allow attorneys to have confidence in those rules. We, therefore, reverse the Court of Appeals.

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This case, Sanford v. Maid-Rite Corporation, 15-2424, is significant because it allowed lawyers to appeal a decision to deny their motion to withdraw. Even better it reversed the decision of the district court.

The case was a class action filed by current and former franchisees against Maid-Rite. The plaintiff alleged that Maid-Rite made false representations regarding the company’s profitability that induced them into purchasing franchises. In September 2014, Maid-Rite and the other defendants retained Larkin, Hoffman, Daly & Lindgren (“Larkin”) as counsel. The parties signed an engagement letter under which Larkin would bill the defendants on an hourly basis. Larkin “reserved the right to withdraw from this representation for good cause.” Good cause included the failure to make timely payment and the failure to follow Larkin’s advice on a “material matter.”

The defendants paid one invoice and did not pay any remaining invoices. On January 28, 2015, Larkin moved to withdraw. The magistrate denied the motion and the district court affirmed that decision. Larkin then filed an interlocutory appeal to the 8th Circuit, which reversed the decision on the grounds that it was an abuse of discretion.