single case exercise

[This is one of the first papers I wrote in law school, around 1997/1998]        

      The issue in the Tatwoeen Deal is whether our attorney, who is a shareholder in our company, can be fired prior to the completion of the task she was hired to perform.
Having completed negotiations, our attorney has secured a deal with a friend of hers, the CEO of Skyrunner Builders (“SB”), to sell 100 shares of our real property to SB for $45,000 per acre.  This price is significantly less than our expert estimates the fair market value to be ($52,000/acre).  In accordance with her contract, if we find the deal to be satisfactory, she would be entitled to a 6% commission when the deal closes.
We are interested in firing our attorney because of our dissatisfaction and lack of confidence in her.  This will allow us to retain an attorney who is able to close the deal at a higher price per acre, at a lower commission.
The governing legal rule regarding a client’s ability to fire an attorney is found in Gage v. Atwater, 86 P. 561 (Cal. 1902).  Gage states that a client has an absolute right to fire an attorney when that attorney has no interest in the subject matter, unless that interest arose out of the employment.
The court’s reasoning is that the “client has the absolute right to change his attorney at any stage in the action.” Id.  The court found that the interest of the client in his own case supersedes any potential interest that the attorney may have in being employed by the client, and the client himself can best make decisions regarding his representation.  No reason is needed to fire the attorney, simply an application to the court and notice to the attorney.  Id.
In Gage, the attorney was fired because the client was dissatisfied with the attorney.  In our situation, we are similarly dissatisfied with our attorney’s performance in negotiations with SB, specifically the price per acre.  While Gage established that a reason is not necessary in order for a client to fire their attorney, the similarity will help us establish an analogy between the cases.
In Gage, the fired attorney argued that he could not be fired because he was owed monies arising out of his employment.  The court dismisses this argument based on Section 1021 of the Code of Civil Procedure.  The court interprets this section to mean that “an attorney has by law no lien for his services upon a judgment recovered in favor of his client.”  Gage.
In both Gage and our case, the fee arrangement was contingent upon successful completion of the matter.  The Gage court established that fee arrangements are separate and apart from the issue of employment.
A counterargument which will most likely be used by our attorney is that in Gage, the attorney argued that he could not be fired because the client was trying to defraud him by reconciling with the opposing side, thereby attempting to eliminate any contingency fee.  
Our attorney will most likely argue that we are attempting to defraud her of her 6% commission because we are now dealing with SB without her assistance, and if we are able to secure a deal directly with them, she will not receive her commission even upon closing of a deal.
The precedent set forth in Gage holds that so long as the attorney has no interest in the subject matter, the client can make whatever arrangements they desire regarding the subject matter without violating any duty to the attorney.
Our attorney will most likely argue that she owns stock in our company, which in turn owns the subject matter.  She will argue that this differentiates this issue from Gage and according to would not permit our company to fire her, in accordance with the rule set forth in Gage.  Her argument is faulty because her ownership interest in our company arose through the course of her employment, namely in payment for fees, and therefore is exempt from the cited rule.
In evaluation of the arguments and counterarguments presented above, I feel that we will win any potential claim by our attorney against us regarding our termination of her.  The underlying issue in this case is the client’s right to terminate the services of their attorney, which as the Gage case established, is an absolute right.

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