Appellants, an attorney and others, sought review of a judgment from the Superior Court of Los Angeles County (California), which found that the attorney’s involvement in a real estate transaction with a client rendered an alleged oral joint venture agreement unenforceable and void.
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Overview
The client, after an unsuccessful attempt to buy property that included parking spaces adjacent to the client’s business, retained the attorney to file a lawsuit seeking a prescriptive easement. The owner offered a settlement whereby the client would buy the property and another parcel. The attorney allegedly entered into an oral joint venture with the client and another party for the purpose of buying the property. The attorney advised the client to seek independent counsel over a year later. After consulting with counsel, the client declined to sign a draft operating agreement and bought the property with other partners. The trial court found that the attorney’s participation in a business transaction with the client violated both Cal. R. Prof. Conduct 3-300 and its statutory counterpart, Cal. Prob. Code § 16004, and that the resulting presumption of undue influence was not overcome because the transaction was not fair and reasonable. The court affirmed that determination, finding that there was no agreement on essential terms and that the client, by conditionally tendering an initial capital contribution for the joint venture, did not accept the proposed operating agreement.
Outcome
The court affirmed the judgment in favor of the client. The court reversed an order that had granted a new trial to the attorney regarding a judgment in favor of one of the other purchasers of the property.