Lawsuits against attorneys often contain a claim for breach of fiduciary duty. In litigating these claims the parties invariably offer the testimony of ethics experts. While existing case law allows a wide scope of this type of testimony, there is nevertheless often considerable disagreement concerning the admissibility of some or all of the proposed testimony. A further complication is the fact that the decisions supporting the broad admissibility of expert testimony regarding the breach of fiduciary duty are not particularly well reasoned. Moreover, the courts are inconsistent when determining what issues are subject to expert opinion. Ultimately, an important aspect of the issue of the admissibility of expert testimony involves the role of the California Rules of Professional Conduct. A close look at the rules and the cases addressing the admissibility issue reveals that a change in the rules has rendered existing case law inapplicable in certain important circumstances.
The most common question concerning the admissibility of expert testimony in breach of fiduciary duty cases is whether the testimony invades the province of the trier of fact or the court and therefore should be excluded. Generally, experts are prohibited from offering legal opinions.1 Otherwise, an expert's opinion is admissible if it relates to a subject that is sufficiently beyond common experience that the opinion of an expert would help the trier of fact.2 An expert opinion is admissible even if it embraces the ultimate issue to be decided by the trier of fact.3 These rules seem plain enough. However, in practice the rules and the cases that apply them are difficult to reconcile.
Piscitelli v. Friedenberg,4 while not addressing the breach of fiduciary duty, is illustrative. A client sued an attorney for failing to opt the client out of a securities class action. Had the attorney done so, the client would have had to arbitrate his securities claim. In the malpractice action the client had to prove he would have prevailed in the arbitration. The court held that an attorney expert witness could not offer an opinion that the plaintiff would have prevailed at an arbitration. This opinion on the "ultimate issue" was deemed to have invaded the jury's function.
The prohibition against admission of expert legal opinions is well established. Generally, application of law is the province of the court.5 As one court has stated: "[W]hile in many cases expert opinions that are genuinely needed may happen to embrace the ultimate issue of fact (e.g., a medical opinion whether a physician's actions constitute professional negligence), the calling of lawyers as 'expert witnesses' to give opinions as to the application of the law to particular facts usurps the duty of the trial court to instruct the jury on the law as applicable to the facts and results in no more than a modern day 'trial by oath' in which the side producing the greater number of lawyers able to opine in their favor wins."6 However, in cases involving claims of breach of fiduciary duty by attorneys, this restriction seems to be ignored.
For example, the court in Stanley v. Richard noted, "The scope of an attorney's fiduciary duty may be determined as a matter of law based on the Rules of Professional Conduct, which together with statutes and general principles relating to other fiduciary relationships all help define the duty component of the fiduciary duty which an attorney owes to his [or her] client."7 The court further stated that "expert testimony is not required but is admissible to establish the duty and breach elements of a cause of action for breach of fiduciary duty where the attorney conduct is a matter beyond common knowledge."8
Stanley presents an example of typical expert testimony in a case involving an attorney's alleged breach of fiduciary duty. In Stanley, the plaintiff's expert testified that the defendant, who was the plaintiff's former attorney in a marital dissolution case, had a conflict of interest on a specific date. The expert identified the particular facts that created the conflict. He then testified that the conflict was not adequately disclosed by a letter attempting to do so. The expert also testified regarding what the defendant should have done to disclose the conflict and opined that the defendant was obliged to obtain the informed written consent of the client. He testified that the defendant attorney breached her duties to her client by forcing the client, contrary to the client's wishes, to remove certain language from a declaration the client filed in support of a motion concerning a marital property settlement. By doing so, the expert said, the defendant violated the client's right to control the litigation and constituted an effort by the attorney to protect her own interests over the client's interests. The expert also testified that the attorney violated two of the Rules of Professional Conduct and had a further duty to withdraw since she did not have the client's consent to the conflict.9
Some of these opinions are clearly legal. For example, the first opinion regarding the existence of a conflict of interest seems to be a legal opinion. Unlike testimony regarding a conversation or a letter, or a statement on how attorneys conduct themselves that relates to the issue of standard of care, an opinion on conflict of interest is not an empirical observation. Rather, an expert's opinion on conflict of interest derives from a knowledge of the law that identifies classes of circumstances that constitute conflicts of interest and then applies that awareness to the facts admitted as evidence in a particular case. Thus, the expert's opinion on conflict of interest seems to be a legal opinion that should have been excluded. Other opinions of this expert seem to be equivalent to the one on conflict of interest and should have been excluded as well.
That the expert opinion in Stanley was legal in nature is evidenced by the discussion in Stanley after the court's summary of the testimony. The court cited numerous cases that established the existence and the extent of the attorney’s duty in the context of the facts of Stanley.10 These cases established to the court’s satisfaction that the expert was legally correct in his opinion.
Undoubtedly, the expert testimony was helpful to the trier of fact, thus satisfying the requirements of Evidence Code Section 801(a). However, all legal opinion testimony can be characterized in this way. Helpfulness does not change the legal nature of the opinion.
The court in Stanley did not examine the rationale for allowing the expert testimony. Rather, it cited a number of cases for authority to do so. Nevertheless, a change in the Rules of Professional Conduct removes the most significant rationale underpinning those decisions.
Distinguishing between Two Attorney Torts
Some of the expert’s opinions, however, seem not to be strictly legal because they apply to the breach of a duty rather than the duty itself. These include the adequacy of the disclosure letter and the act of forcing the client to remove particular language from a declaration. Discerning whether an expert opinion is a legal opinion can be difficult. In analyzing this issue, one should avoid the temptation to equate malpractice causes of action with breach of fiduciary causes of action. There are important distinctions between the two that can affect the analysis.
The misperception that a breach of fiduciary duty claim and a malpractice claim are alike may be a reason for the apparent inconsistency in allowing legal opinion testimony in fiduciary duty cases but not in other cases. A common comparison between the two actions occurs when courts state that an attorney’s behavior in a malpractice case should be measured by the "standard of care" and, in a fiduciary duty case, by the "standard of conduct." The use of expert testimony follows in both types of cases with experts identifying the "standard" in each case. However, the two claims are different, and so is the standard by which the attorney’s action should be gauged.
The elements of a cause of action for attorney malpractice, like other actions for professional negligence, generally are: "(1) The duty of the professional to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate caused connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional’s negligence."11
The existence of a duty is a question of law for the court.12 The breach of the duty is a question of fact.13 The fact of breach is proved by expert opinion as to whether the attorney followed the standard of skill prevailing in the profession.14
Specifically, the attorney has "the duty to use the care and skill ordinarily exercised in like cases by reputable members of the profession practicing in the same or similar locality and under similar circumstances."15 What attorneys do in "like cases" requires evidence from those who know how attorneys ordinarily handle such cases.16 Thus, the standard of care is based upon the practices of attorneys in specific situations. An opinion based upon the witness’s knowledge of what attorneys do in like cases is not based on legal principles but on observations of empirical fact.
The elements of the tort of breach of fiduciary duty are similar in form to those of malpractice: "(1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage caused by the breach."17 As a result of cases such as Stanley, the use of expert witnesses in fiduciary duty cases seems similar as well— but there is a distinct difference. In malpractice cases, the attorney’s conduct regarding the standard of care is primarily measured against the conduct of the attorney’s peers. However, in breach of fiduciary duty cases, the attorney’s conduct is entirely measured against the Rules of Professional Conduct, statutes, and general principles, which are all imposed by authorities superior to attorneys, such as the legislature and the courts.
Statutes, of course, are promulgated by the legislature. General principles are common law formulations set down by the courts. Although the Rules of Professional Conduct are devised by the State Bar of California, the rules require the approval of the California Supreme Court.18 In contrast, the standard of care in malpractice is determined by the conduct of attorneys rather than imposed upon attorneys by superior authority.19 Thus, in breach of fiduciary duty actions, unlike malpractice actions, the expert does not offer an opinion based on empirical observations. Instead, the expert’s opinion is based on rules of law applied to the facts of the case. In all other cases, this function is carried out by the trier of fact, who determines if the facts as presented during the case satisfy the elements of law applicable to the case.
Neither Stanley nor any of the cases relied on by Stanley have examined the issue of whether the expert opinions in the respective cases are legal opinions and should be excluded on that basis. Moreover, the expert opinions in those cases rely on the Rules of Professional Conduct to support their various analyses of the duty component. However, according to the Rules of Professional Conduct as they are currently constituted, the rules have no place in the analysis either as evidence, the basis for expert opinion, or legal opinion.
The Role of the Rules of Professional Conduct
Rule 1-100 of the Rules of Professional Conduct reads in part, "These rules are not intended to create new civil causes of action. Nothing in these rules shall be deemed to create, augment, diminish, or eliminate any substantive legal duty of lawyers or the non-disciplinary consequences of violating such a duty." Recently, the court of appeal in Ross v. Creel Printing & Publishing Company has confirmed what seems obvious:20 "There is no independent cause of action for the breach of a disciplinary rule."21
The Ross court noted the existence of a 1977 case, Kinnamon v. Staitman & Snyder,22 that, by implication, held otherwise. In the earlier case, the plaintiff sued a law firm for intentional infliction of emotional distress for threatening criminal prosecution of the plaintiff after the plaintiff did not make good on a dishonored check. The Kinnamon court found that the conduct was outrageous because it violated one of the Rules of Professional Conduct. The court in Ross criticized that opinion, agreeing with the dissent in Kinnamon that the Rules of Professional Conduct "were promulgated by the members of the State Bar primarily as ethical guidelines for its members…intended to operate as a shield to protect the public from unethical conduct by attorneys but not as a sword to be used to recover money damages…."23
If the Rules of Professional Conduct do not "create, augment, diminish or eliminate any substantial legal duty of lawyers or the non-disciplinary consequences of violating such a duty," then it necessarily follows that any duty for tort purposes must exist wholly independently of the Rules of Professional Conduct. Stated differently, whether particular conduct is prohibited by the Rules of Professional Conduct is irrelevant to a determination of whether an attorney committed a civil wrong.
Existing case law indicates that the Rules of Professional Conduct play some role in the determination of whether an attorney breached a fiduciary duty to a client.24 However, a review of the cases shows either a lack of analysis as to the role, or a difference between a previous version of the Rules of Professional Conduct and the current version that renders the cases useless or inapplicable. For example, the court in Stanley was not called upon to determine the relevancy of the Rules of Professional Conduct to its analysis. It simply relied upon an earlier case, Mirabito v. Liccardo.25
In Mirabito, a fraud case by a client against an attorney, the court noted: "It is well established that an attorney's duties to his client are governed by the [R]ules [of Professional Conduct]."26 The court then stated that the Rules of Professional Conduct, along with statutes and certain general principles, help define the duty component.
Mirabito relied on David Welch Company v. Erskine & Tulley,27 which in turn relied on Day v. Rosenthal for that proposition.28 Day held that "[t]he standards governing an attorney’s ethical duties are conclusively established by the Rules of Professional Conduct."29 In Day, the attorney’s "numerous, blatant and egregious violations of attorney responsibility were not breaches of legal technicalities for which expert testimony is required. They were violations of professional standards, standards which the trial court was compelled to notice."30 That is, the court had to take judicial notice of the Rules of Professional Conduct.
At the time Day was decided, the Rules of Professional Conduct did not contain the Rule 1-100 disclaimer as it currently reads.31 The current Rule 1-100 became operative May 27, 1989. Moreover, the conduct in the later cases—David Welch Company, Mirabito, and Stanley—all predated the effective date of the current Rules of Professional Conduct. To hold now that a court must take judicial notice of the Rules of Professional Conduct would contradict the disclaimer language contained in Rule 1-100. Ross, in passing, cites Stanley for the notion that the Rules of Professional Conduct may provide standards of conduct for attorneys but did not consider the issue of when the Rules of Professional Conduct can be relied upon in civil actions.
Unfortunately, cases from other jurisdictions that address the use of rules of professional conduct are not particularly helpful because the disclaimers found in those rules are not as broad as the one in Rule 1-100. Many states hold that an ethics rule may be relevant as evidence on the standard for determining negligence or fiduciary misconduct.32 However, some states do not allow specific reference to the state's rules either in instructions or in expert testimony.33
In California, unlike other states, use of the Rules of Professional Conduct as evidence of the standard of care in a malpractice claim or standard of conduct in a breach of fiduciary duty claim should not be admissible. If a civil standard exists independent from the Rules of Professional Conduct, then the Rules of Professional Conduct cannot augment, diminish, or eliminate the civil standard. If a Rule of Professional Conduct is the same as a civil standard, reference to the rule is unnecessary and can only serve the purpose of suggesting to the jury that the attorney was "unethical." If no civil standard exists, both Rule 1-100 and Ross would prevent courts from resorting to the Rules of Professional Conduct.
While the Rules of Professional Conduct do not seem to apply to attorney tort cases, they do apply in at least one circumstance. If conduct consistent with the Rules of Professional Conduct is mandatory, it would be unfair to allow an expert witness to offer an opinion that the standard of conduct or the standard of care requires conduct contrary to the rules. In fact, such an opinion is impermissible. As noted by the court in Day, "The standards governing an attorney's ethical duties are conclusively established by the Rules of Professional Conduct. They cannot be changed by expert testimony. If an expert testifies contrary to the Rules of Professional Conduct, the standards established by the rules govern and the expert testimony is disregarded."34 While the Rules of Professional Conduct may not be used to establish a breach of a civil duty, no coherent system of justice would allow an attorney to be civilly liable for adhering to the rules.
The admissibility of expert opinions in attorney breach of fiduciary duty cases needs to be reexamined to avoid the routine occurrence at trial of legal arguments disguised as expert opinion. Moreover, whatever the conclusion on admissibility, the use of the Rules of Professional Conduct in determining the nature and extent of the attorney's fiduciary duty should be prohibited. The cases that allow for the use of the Rules of Professional Conduct are distinguishable in that they refer to the rules as they existed prior to the change to Rule 1-100.