Keker & Van Nest's Wendy Thurm
FROM THE UPCOMING ISSUE
Jury rejects $17M legal malpractice claim against Orrick
December 15, 2008
A San Francisco jury rejected a $17 million legal malpractice claim against Orrick Herrington & Sutcliffe in an eight-year-old dispute claiming breach of fiduciary duty by retired trusts and estates partner William Hoisington.
But Hoisington did not escape unscathed. Jurors did find that he failed his obligation to his client by breaching a fiduciary obligation, but that it was not a substantial factor in harm to the client.
“We presented that theory to the jury, that he breached a duty of loyalty, that he could not represent parties that were on the giving and receiving end of wealth,” said Jonathan Bass, of Coblentz, Patch, Duffy & Bass in San Francisco, the plaintiff’s attorney.
“But the jury did not put it together with our client’s losses,” he said.
"It is not often that a law firm takes a malpractice claim to trial," said Wendy Thurm, one of the Keker & Van Nest attorneys representing Orrick. "Orrick's case was strong, and we're happy Bill Hoisington's character and reputation have been preserved."
The verdict on Tuesday came following a six-week trial and two days of deliberation in Benesch v. Tandler, No. 317187 (San Francisco Co., Calif., Super. Ct.). Hoisington spent more than 30 years as a trusts and estates attorney in the San Francisco office of Orrick prior to his retirement.
An 86-year-old multimillionaire businesswoman, Fritzi Benesch, filed the suit in 2000, claiming she had been misled into relinquishing control of her clothing company, Fritzi California, to her daughter and son-in-law, Valli and Robert Tandler. Both Tandlers are lawyers and worked in the family business.
Valli worked for the former Brobeck, Phleger & Harrison firm for two years before joining the family clothing and real estate businesses. Robert worked as general counsel for Fritzi California.
In 2002, the trial court dismissed the parties from the suit on summary judgment, but the case was reinstated on appeal in 2005. The Tandlers mediated a settlement with Benesch, but Benesch abruptly backed out of the deal and the Tandlers have an appeal pending to enforce the agreement, according to Thurm.
Benesch was represented, along with her husband Ernest, by Hoisington from 1977 to 1999, when she separated from her husband.
The suit states that Hoisington said he could no longer represent Fritzi at that point due to a conflict of interest.
Fritzi Benesch sought $17 million for stock transactions Hoisington helped to arrange as part of a lucrative family estate plan established during the long attorney-client relationship. She maintained that she intended for the family assets to be divided equally between her two daughters. In 1988, Valli sought corporate and estate planning advice from Hoisington, which Benesch alleged amounted to a conflict of interest that was not waived.
The suit alleged that Valli used the information obtained in this relationship to garner more of the family assets than her fair share. The suit claims that Benesch discovered stock transfers in the family businesses that gave the Tandlers 70% of the business, that the Benesches retained a fraction of the company, and that Valli's sister was left with an 11% remainder of the assets. "Unfortunately, this case was little more than a bitter family dispute brought to court," said Elliot Peters, an attorney at Keker & Van Nest who also represented Hoisington.
"We're pleased with jury verdict and are gratified to put this matter behind us," said Allan Whitescarver, an Orrick spokesman in San Francisco.
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