Nathan D. Wirtschafter
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The Wirtschafter Law Reporter

Vol. II, Q4

The Wirtschafter Law Reporter (“WLR”) is a quarterly publication of Nathan D. Wirtschafter Corp.

You may reach us by dialing (818) 660-2518, or +972-54-210-1776, or, please visit our website at www.ndwlaw.com, or contact us at ndw@ndwlaw.com.

Thank you,
Nathan Wirtschafter

Contents:

 

Simple Suggestions to Recover on Receivables.

I received an inquiry recently from an attorney about collection of a small debt (about $20,000) from a former business partner.  Counsel wished to know what strategy to follow when the debtor was not responding to collection letters from the attorney.

Generally speaking, if the debtor is not responding to attorney letters, the client, not the lawyer, should send out a short demand email or letter letting the debtor know that the client has retained legal counsel, counsel has reviewed the situation and counsel is ready to file a lawsuit.  The letter should be reviewed by the attorney before it is sent.  Alternatively, if the client is more comfortable on the phone, a telephone call to the debtor will also work.  Debtors need to see that the creditor is determined. 

The creditor should set a deadline—without reference to a particular date—such as, "If I don't hear from you shortly," or, "If I don't hear from you in the next week." 

Also generally speaking, if the debtor is solvent and does not favorably respond to this last attempt, the creditor should file a lawsuit.  For limited jurisdiction claims (under $25,000), using the judicial council breach of contract two-page complaint form is often most efficient. 

 

Mediation Update: Failure to Comply with Mediation Provision Can Result in Denial of Attorneys Fees.

California’s standard residential real estate purchase contract requires mediation before commencing either arbitration or litigation. 

Paragraph 17A of the contract provides that if “any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorneys fees….”

In Lange v. Schilling (2008) 163 Cal.App.4th 1412, the plaintiff purchaser filed a complaint alleging failure to disclose, fraud, negligence and similar claims arising out of failure to disclose construction problems in a residential home.  Thereafter, plaintiff purchaser offered mediation.  The trial court held that plaintiff, who won at trial, had substantially complied with the mediation condition in the contract and awarded plaintiff attorneys fees.

The appellate court reversed.  It held that filing the complaint before attempting mediation meant a failure to follow the contract, and as such, plaintiff could not recover attorney fees.  The appellate court had no mercy on the plaintiff who attempted mediation after filing the action. 

 

Attorney Disqualification and Email Groups.

A court may disqualify a law firm from representing a party, usually based on conflicts of interest. 

For example, in a case of “successive representation,” a law firm might have represented a client in a case a few years ago whose interests are potentially adverse to the client the law firm is now representing.  Or, in a case of “simultaneous representation,” a law firm might be representing two or three parties at the same time who have different interests.

In “successive representation” cases, the key issue is confidentiality.  The law demands “permanent confidentiality” of matters disclosed to a law firm during the prior representation.

In In re: Charlisse C. (2008) 45 Cal.4th 145, the California Supreme Court followed the email trail in reviewing a motion to disqualify.  Specifically, the Court examined email groups, where office members discussed general office considerations, but could also have revealed case-specific information. 

Ultimately, the Court focused on the screening measures used to protect against the revelation of confidential information.  It put the burden on the law firm to prove that it met the legal standard for confidentiality.

In another case of “successive representation,” Mr. Wirtschafter was able to defeat a motion to disqualify brought by one of the largest health care corporations in California.  For that motion, Mr. Wirtschafter was able to show that the law firm should not be disqualified because the attorney at issue had no access to confidential information and had in fact not acted in an attorney capacity.

 


 
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