Legal Ethics Opinion No. 1432

    Zealous Representation--Failure To Complete A Contract of
Employment--Fees--Attorney-Client Relationship: Attorney's Duty
To Client after Nonsuit

You have presented a hypothetical situation in which an attorney
agreed to substitute as counsel of record and assume all
responsibility for representation of a client in two pending
cases which had been consolidated for trial: in the first of
which Client was defending against an action filed in the name of
a closely-held corporation and the second in which Client was
suing the corporation and its principals for damages for, among
other things, failure to provide any financial information to the
shareholder regarding the value of his equity for nearly eight
years.  You advise that Client had been an organizer of the
corporation, had served as a director and president, and was
still a shareholder.  Furthermore, you indicate that the first of
the two suits had been filed one-and-a-half years prior to the
substitution of counsel.

You have informed the committee that Client told Attorney that
obtaining the books and records of the corporation was the top
priority in resolving these cases and that Client felt that the
corporation would rather settle than produce such records. 
Client further stated that motions for productions of the
records, as well as extensive interrogatories, had been served
four months earlier, but that no order had been obtained by prior
counsel to compel their production.   Client also indicated that
prior counsel had agreed to minimal billed hours at an hourly
rate with client's attorney-wife providing assistance; whereas
other attorneys had requested a $15,000 retainer which was not

Following substitution of counsel, Attorney conferred with Client
several times; reviewed the cases and files; explored various fee
arrangements in extensive discussions; and ultimately proposed a
contingency fee arrangement whereby Client was to pay all
expenses in advance.   The fee proposal letter indicated that
Attorney had already filed a motion to compel, a praecipe to set
a trial date, and was scheduling depositions of adverse parties. 
You indicate that Client accepted the agreement by return mail
and, at docket call, a trial date was set.

Attorney later wrote client that the judge overruled the motion
to compel. In a subsequent letter, Attorney wrote that he had
scheduled another motion to produce and, in advance, a hearing to
compel, in case of non-compliance with the request. Client was
informed that he had to appear for depositions by the adverse
party, but that he could review the financial records at the
time. At the time of the depositions, however, the records were
not made available. Meanwhile, the trial was continued because
Attorney had a federal court appearance on the same date.

Attorney subsequently informed Client that he had obtained a
court order compelling the corporation to produce its financial
records, but the corporation filed objections and a hearing was
set on the objections and for a request for another continuance. 
Although the Attorney stated that he believed that adverse
counsel would agree to a continuance, and that Client would not
have to appear for the scheduled trial date, Attorney informed
Client, at the hearing, that the judge had refused to to grant
another continuance. Attorney advised and asked permission from
Client to nonsuit the case, which Attorney said he would re-file
in a few weeks.  Client agreed to the nonsuit of the case in
which he was plaintiff, but opposing counsel refused to nonsuit
his case.  You indicate that, with four days notice, Client made
arrangements to appear from out-of-state to testify in the trial
against him.

You indicate that Client called and wrote Attorney several times
for information on the status of the case to be re-filed was
subsequently told by Attorney that he could no longer work on a
straight contingent fee basis but would need a retainer of
$15,000 to represent Client in the re-filed action.  Client wrote
Attorney that he could not afford such fees and that he expected
Attorney to re-file his lawsuit before the limitations period
expired and to get the corporate books and records.

You advise that, to date, Client has received no word from
Attorney as to the letter refusing the $l5,000 retainer agreement
or the re-filing and, finally, you indicate that the statute of
limitations is rapidly approaching.

You have asked the committee to opine whether, under the facts of
the inquiry, Attorney has failed to complete a contract of
employment for the Client; whether the non-suit has terminated
the attorney's obligations to the client; and whether the
attorney's re-filing constitutes a new suit for which he can
charge new and different fees. 

The appropriate and controlling Disciplinary Rules related to
your inquiry are DR 2-108(D), which mandates that upon
termination of employment, a lawyer shall take reasonable steps
for the continued protection of a client's interests; and DR
7-101(A)(2) which states that a lawyer shall not intentionally
fail to carry out a contract of employment entered into with a
client for professional services.

The committee has previously opined that an attorney is expected
to attend to all matters incident to divorce proceedings unless
the client consents to limitations on the representation after
full and adequate disclosure has been made to the client.  SeeLEO #1193.  Since, as the facts you present allege, Attorney was
hired by Client specifically to obtain the books and records of
the defendant corporation; was informed that motions for
production of documents had been served several months prior to
his employment; and Attorney ultimately obtained an order to
compel production but subsequently took a non-suit, the order to
compel production was not enforced, and the client's objective
not achieved. The committee opines, therefore, that Attorney has
intentionally failed to carry out a contract of employment with
the client, in violation of DR 7-101(A)(2).

As to the question of whether the non-suit has terminated the
attorney-client relationship, the committee directs your
attention to DR 2-108(D).  Since the attorney is no longer
counsel of record, by virtue of the non-suit, the committee
believes that DR 2-108(C), requiring leave of court for
withdrawal by counsel of record, is inapplicable.  Thus, although
Attorney may withdraw without leave of court, the committee
opines, however, that the attorney still has an obligation to
protect the client's interests, under DR 2-108(D). Furthermore,
the committee is of the opinion that the attorney's obligation
also includes the duty to re-file the suit to prevent the statute
of limitations from running and from prejudice against his
client. See LEOs #841, #872, #1088.

Finally, the committee opines that the as to whether the fee
agreement is nullified and may be unilaterally changed upon the
taking of the non-suit raises a legal question as to contract law
which is beyond the purview of the committee. 

Committee Opinion
September 17, 1991