## Facts

- Linda E. Stanley retained Diana Richmond to represent her in a marital dissolution proceeding against her husband, Dr. John Stanley.
- Dr. Stanley was represented by C. Rick Chamberlin.
- While representing opposing spouses in the dissolution, Richmond and Chamberlin were in the process of forming a new law firm together.
- Stanley alleged Richmond did not adequately disclose the developing business relationship with opposing counsel or obtain informed consent, creating a conflict of interest.
- Stanley also alleged Richmond’s advice and negotiation were deficient regarding: (i) waiver of Stanley’s interest in Dr. Stanley’s VA pension (foreclosing potential lifetime health benefits and survivor rights that could have been preserved by retaining even a nominal interest), (ii) tax consequences of settlement payments, and (iii) calculation of rent owed for Dr. Stanley’s use of the family home.
- Stanley sued Richmond and her firm for breach of fiduciary duty, professional negligence (legal malpractice), and breach of contract.
- After Stanley rested at trial, the superior court granted nonsuit, reasoning Stanley failed to present expert testimony on the family-law standard of care and failed to show “but for” causation of a better dissolution result.

## Issues

1. Whether a client can establish a prima facie case for breach of fiduciary duty based on an attorney’s undisclosed business relationship with opposing counsel without expert testimony.
2. Whether expert testimony on the standard of care is required to withstand nonsuit on legal malpractice claims when the alleged misconduct is within common understanding.
3. Whether the client presented sufficient evidence of causation and damages to go to the jury on fiduciary duty, malpractice, and contract claims.

## Decision

- The Court of Appeal reversed the judgment of nonsuit and remanded for a new trial.
- The court held Stanley presented a prima facie case of breach of fiduciary duty, professional negligence, and breach of contract.
- The court concluded the trial court erred in requiring additional standard-of-care expert testimony and in finding insufficient evidence of “but for” causation at the nonsuit stage.

## Legal Principles

- An attorney owes a duty of loyalty and full disclosure of material facts that may affect the representation, including conflicts created by business relationships with opposing counsel; lack of adequate disclosure and informed consent can support fiduciary-duty liability.
- Although expert testimony often proves the professional standard of care in legal malpractice, it is not required where the alleged wrongdoing is so apparent that a lay jury can evaluate it under a common-knowledge exception.
- On a motion for nonsuit, the court must view the evidence and reasonable inferences in the light most favorable to the plaintiff; causation and damages may go to the jury where the evidence permits reasonable inferences of economic loss from the attorney’s conduct.
- A retainer’s promise to use “best efforts” consistent with ethical obligations can support a breach of contract claim based on the same conduct that supports fiduciary-duty and malpractice theories.

## Conclusion

The court held that a client alleging an attorney’s undisclosed business relationship with opposing counsel and plainly deficient settlement advice presented enough evidence to reach the jury on fiduciary duty, malpractice, and contract claims, and it reversed a nonsuit entered for lack of further expert testimony and purportedly insufficient causation proof.


Stanley v. Richmond, 35 Cal. App. 4th 1070 (Ct. App. 1995)