Cotton v. Kronenberg

44 P.3d 878
CourtCourt of Appeals of Washington
DecidedApril 22, 2002
Docket47212-7-I
StatusPublished
Cited by33 cases

This text of 44 P.3d 878 (Cotton v. Kronenberg) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cotton v. Kronenberg, 44 P.3d 878 (Wash. Ct. App. 2002).

Opinion

44 P.3d 878 (2002)
111 Wash.App. 258

Harold J. COTTON, Respondent,
v.
Donald B. KRONENBERG, an individual and doing business as Kronenberg & Associates; and Vanessa Edrich, an individual, Appellants.

No. 47212-7-I.

Court of Appeals of Washington, Division 1.

April 22, 2002.
Reconsideration Denied June 14, 2002.

*880 Anne Melani Bremner, Blake Edward Dias, Kim M. Tran, Stafford Frey Cooper, Gregory Mann Miller, Seattle, for Appellants.

Brian Haig Krikorian, Erica Krikorian, Seattle, for Respondent.

*879 COX, J.

At issue is whether Donald Kronenberg breached his fiduciary duty to Harold Cotton, his former client, rendering unenforceable a written fee agreement between the two. We must also decide whether Kronenberg violated the Consumer Protection Act (CPA) in connection with that agreement.

Because counsel breached his fiduciary duties to his client, the fee agreement is unenforceable. Accordingly, the trial court did not abuse its discretion in ordering disgorgement of all fees that Cotton paid. Thus, we affirm those portions of the summary judgment order in favor of Cotton. The public interest element of the CPA presents genuine issues of material fact. Thus, we reverse the attorney fee award under that statute.

In February 1996, Cotton asked Kronenberg to defend him against multiple charges of child rape. Kronenberg previously represented Cotton in other matters. The parties disagree about the facts surrounding the negotiations for the payment of fees for defense against the rape charges.

Viewing the evidence in the light most favorable to Kronenberg, as we must, the record shows that Cotton signed a fee agreement on March 6, 1996. That document, which Kronenberg prepared, states that attorney fees shall be charged at the rate of $140 per hour, and contains other provisions that we discuss later in this opinion. On that same date, Cotton also signed a statutory warranty deed to his "Desert Aire property" in which Kronenberg is named as the grantee. He also transferred to Kronenberg title to a mobile home located on the realty.

On March 9, 1996, Cotton signed another agreement that Kronenberg prepared. That document sets forth terms for a nonrefundable fee for defense against the rape charges. It also estimates that fees "could be anywhere from $10,000 to $30,000." The agreement further provides for transfer of the Desert Aire property and the mobile home to Kronenberg in full satisfaction of all fees earned in the case. Within a week of this transfer Kronenberg recorded the deed, and within months sold the property for $42,000.

Several months after signing the March 9 agreement, Kronenberg met several times with the complaining witness for the rape *881 charges. Kronenberg claims he met the witness to negotiate a settlement of potential civil claims against Cotton that might have arisen from the alleged conduct underlying the rape charges. According to the prosecutors in the rape case, the dealings[1] between Kronenberg and the witness impaired Kronenberg's ability to effectively question that witness during the approaching criminal trial. Based on that view, the prosecutors moved to have Kronenberg removed from the criminal case to protect Cotton's Sixth Amendment and due process rights. The trial court granted the motion.

Thereafter, new counsel for Cotton negotiated a plea and sentence recommendation with the prosecutor. New counsel also represented Cotton in further negotiations with the State to avoid potential additional charges of witness tampering and obstruction of justice based on Kronenberg's contact with the complaining witness. As a result of these negotiations, no criminal charges went to trial.

After Kronenberg denied Cotton's request for a refund of the unearned balance of the fees generated by the sale of the realty and mobile home described in the March 9, 1996 fee agreement, Cotton commenced this action. He stated four causes of action: legal malpractice, breach of fiduciary duty, violation of the CPA, and conversion. Cotton moved for partial summary judgment solely on the breach of fiduciary duty and CPA claims. In response, Kronenberg moved for partial summary judgment, asking the court to dismiss the conversion claim. Following the court's grant of Cotton's motion and its dismissal of the conversion claim, he dismissed the legal malpractice claim.

Kronenberg appeals.

BREACH OF FIDUCIARY DUTY

Relying heavily on Hizey v. Carpenter,[2] Kronenberg argues that the trial court improperly considered and applied the Rules of Professional Conduct (RPC) in determining that he breached his fiduciary duty to Cotton. Neither Hizey nor any other authority supports that proposition, and we reject it.

We may affirm an order granting summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.[3] All facts and reasonable inferences must be considered in the light most favorable to the nonmoving party.[4] A material fact is one upon which the outcome of the litigation depends.[5] Summary judgment is proper when reasonable minds could reach but one conclusion regarding the material facts.[6] We review questions of law de novo.[7] We also review de novo evidentiary rulings made in conjunction with a summary judgment motion.[8]

In Eriks v. Denver,[9] our Supreme Court affirmed a trial court decision that an attorney breached his fiduciary duty to clients by violating the Code of Professional Responsibility (CPR),[10] the predecessor to the RPC. In that case, an attorney was hired to provide joint legal defense for all investors and promoters in a tax shelter scheme.[11] The investors later sued the attorney, alleging *882 that he violated the CPR by representing both investors and promoters in the tax shelter and therefore breached his fiduciary duty to his clients. They also claimed counsel violated the CPA.

Four months later, in Hizey, the same court expressly preserved the propriety of using the CPRs or RPCs other than to impose malpractice liability.[12] Rather, the Hizey court held that a violation of the CPRs or the RPCs may not be used as evidence of legal malpractice.[13] Subsequent decisions adhere to the view that the RPCs may be considered in cases other than legal malpractice.[14]

Kronenberg also cites Hetzel v. Parks[15] to support his argument. Hetzel is distinguishable. In that case, Hetzel sued an attorney who did not represent him for legal malpractice. The attorney cashed Hetzel's endorsed settlement check for Hetzel's attorney by depositing it in his own trust account and giving Hetzel's attorney a check for the amount made out to the attorney. Hetzel's attorney cashed the check, but did not use the money on Hetzel's behalf or provide him with the proceeds.[16] Because the claim in Hetzel was for legal malpractice, that application of the Hizey holding is not useful here.

Eriks, not Hizey, controls. The trial court properly considered the RPCs to determine whether Kronenberg breached his fiduciary duty to Cotton in this action to recover attorney fees.

We next consider Kronenberg's evidentiary challenge to Cotton's summary judgment motion. Specifically, he objects to the declaration of an ethics expert.

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Cite This Page — Counsel Stack

Bluebook (online)
44 P.3d 878, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cotton-v-kronenberg-washctapp-2002.