PA: Underlying legal malpractice and breach of fiduciary duty claims
FACTS: Client contracted with a group of British investors for the purchase of one of their subsidiaries. Together, client and these British investors planned to merge and purchase a large homecare business. At a meeting in September of 1986, attorney told client that his firm was going to withdraw as counsel for client. After withdrawing, attorney continued to advise client in corporate matters. Client contended that attorney was still acting as its counsel as of the date of the shareholder’s meeting on June 19, 1987, and that because client simultaneously acted as counsel for both client and the group of British investors–who had interests adverse to client, in the sale of client’s assets (and because attorney allegedly made false statements before the sale) attorney caused the assets to be sold for a lower value. The trial court granted a JNOV in favor of attorney, from which client appealed.
ISSUE: Even though attorney had formally withdrawn from representation, were attorney’s actions enough to constitute continued legal service?
RULING: Yes. After formally withdrawing, attorney continued to assist client regarding corporate law and security transactions, which were attorney’s expertise. Attorney also advised client in the organization and execution of the shareholder’s meeting, and so client could reasonably have believed that attorney was still representing it.
LESSON: Simply withdrawing from representation will not be enough to sever the attorney client relationship if attorney continues to provide legal services to client.