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Gaylor v. Hobdy12/30/2003
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
This litigation involves two successive lawsuits. In the first, attorney Damon L. Hobdy sued his former client, Ruby Jane Gaylor, and her attorney for fees and conversion of money over which Hobdy claimed a lien. Gaylor cross-complained. During the course of that litigation, Hobdy made certain statements and disclosures that Gaylor now claims were in violation of the attorney-client privilege. That litigation ended favorably to Hobdy.
Gaylor then sued Hobdy based upon her claim of unauthorized disclosure of confidential information about her. She argues the trial court erred in sustaining Hobdy's demurrer to her claims for breach of contract, breach of fiduciary duty, intentional infliction of emotional distress, and unfair competition. She further argues that the trial court erred in denying leave to amend her complaint and in imposing sanctions against her for filing a frivolous lawsuit. On the record before us, we find the trial court erred in sustaining the demurrer. We also conclude the trial court erred in imposing sanctions.
FACTUAL AND PROCEDURAL SUMMARY
In July 1997, Hobdy agreed to represent Gaylor in a personal injury action resulting from an automobile accident in August 1996. They signed a contract with a contingent fee arrangement. Hobdy filed suit on Gaylor's behalf in August 1997. In April 1999, by motion, Gaylor substituted Hobdy out of the case and replaced him with attorney Richard M. Foster. In her moving papers, Gaylor said she had lost confidence in Hobdy in the personal injury action as well as in an unrelated federal tax matter. Hobdy filed a notice of attorney's lien and served notice of the lien on Foster and opposing counsel in the suit. Gaylor and her new counsel settled the underlying personal injury lawsuit a few months later.
Hobdy learned of the settlement and demanded payment of his fees and costs for the personal injury representation. The demand was made to Gaylor, and to Foster, who held Gaylor's settlement funds in his client trust account. They refused to pay Hobdy. In December 1999, Hobdy sued Gaylor and Foster respectively, for breach of contract and conversion. Gaylor cross-complained for legal malpractice against Hobdy. She alleged causes of action for negligence, fraud, and intentional infliction of emotional distress resulting from his alleged mishandling of the personal injury representation.
In December 2000, Hobdy moved for summary judgment on his complaint. He included a declaration in which he stated, among other things, that Gaylor is a "tax protester" who discharged him from the personal injury representation because he counseled her to "file correct and truthful tax returns" and because he "would not agree to represent her in her illegal beliefs" concerning her tax problems. He also included a copy of what he called "Gaylor's Tax Protester Letter."
In her opposition to the motion, Gaylor disputed Hobdy's assertion that she discharged him on account of her illegal tax beliefs. The trial court noted that the motion neither raised nor disposed of any issue in Gaylor's cross-complaint, and it denied summary judgment on that basis. But it granted summary adjudication to Hobdy with respect to his suit for fees. The trial court later denied Gaylor's motion for reconsideration.
In March 2001, Hobdy moved for summary judgme
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