## Facts

- Michael and Robert Stephens retained attorney Daniel Beck to sue General Motors over injuries from a pickup-truck rollover and fire.
- With the clients’ consent, Beck associated Texas attorney L. L. McBee and then associated Ronald H. Wecht and Wecht’s firm as California local trial counsel.
- The fee arrangements provided that McBee advanced costs; Beck and McBee split the contingent fee 47%/53%; and Wecht received 10% of the contingent fee pro rata from Beck’s and McBee’s shares.
- During trial, General Motors offered to settle for $6 million.
- The night before closing argument, the Stephenses told Wecht and McBee they wanted to settle; McBee was to contact General Motors but allegedly did not.
- The case went to verdict and the recovery was substantially less than the settlement offer.
- The Stephenses sued McBee and Wecht for failing to follow settlement instructions; McBee and Wecht resolved the claims by separate settlements (including payment funded for Wecht by his malpractice carrier).
- Beck, who was not sued by the clients, sued Wecht alleging that Wecht’s malpractice toward the clients breached a fiduciary duty owed to Beck by diminishing Beck’s expected contingent fee.

## Issues

1. Whether one attorney may sue co-counsel for breach of fiduciary duty based on alleged malpractice toward their mutual client that reduced or eliminated the first attorney’s expected contingent fee.

## Decision

- The California Supreme Court affirmed judgment for Wecht and the intervening insurer.
- The court held that co-counsel do not owe each other a fiduciary duty to protect another lawyer’s prospective interest in a contingent fee arising from their mutual representation of a client.
- The court approved authority rejecting such a duty and disapproved contrary authority to the extent inconsistent.
- The court reasoned that imposing the claimed duty would be contrary to public policy because it risks distorting lawyers’ professional judgment away from their overriding duty of loyalty to the client.

## Legal Principles

- An attorney’s overriding professional duty is to the client; courts will not recognize duties among co-counsel that threaten undivided loyalty to the client.
- A fee-sharing co-counsel relationship, standing alone, does not create a fiduciary duty running between lawyers to protect each other’s contingent-fee expectations.
- A lawyer cannot convert an alleged loss of an anticipated contingent fee, attributable to alleged malpractice toward the client, into a fiduciary-duty tort claim against co-counsel absent special circumstances or an express agreement creating such obligations.
- Public policy disfavors inter-lawyer fiduciary-duty claims that could encourage fee-driven litigation and interfere with client-centered decisionmaking in settlement and trial strategy.

## Conclusion

The court held that a lawyer may not recover from co-counsel on a fiduciary-duty theory merely because co-counsel’s alleged mishandling of the client’s case reduced the lawyer’s anticipated contingent fee, because recognizing such a duty would conflict with the lawyer’s paramount loyalty to the client and is contrary to public policy.


Beck v. Wecht, 28 Cal. 4th 289, 48 P.3d 417, 121 Cal. Rptr. 2d 384 (Cal. 2002)