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In a fit of rage, 11-lawyer Rus, Miliband & Smith dumped a group of accountants from its client list in 1999 after it raised questions about the Irvine firm’s representation in a bad faith case against an insurer. Soon afterward, though, with the help of a new law firm, the accountants at Long Beach’s Goodrich, Goodyear and Hinds reached a settlement for almost $1.9 million. The Irvine-based Rus firm quickly came calling, claiming a 43 percent share of the money based on quantum meruit for services already rendered. But in a ruling released Friday, Santa Ana’s Fourth District Court of Appeal stomped on the law firm’s claim. “To allow an attorney under a contingency fee agreement to withdraw without compulsion and still seek fees from any future recovery is to shift the time, effort and risk of obtaining the recovery � from the attorney, who originally agreed to bear those particular costs in the first place, to the client,” Justice David Sills wrote. “The withdrawing attorney gets a free ride as to many of the headaches of litigation which he or she otherwise would have had to endure.” Justices Kathleen O’Leary and Eileen Moore concurred. The Rus firm had originally represented principals in the Hill Williams real estate empire, who after the company collapsed in the early 1990s sued their accountants, claiming the accountants hadn’t abided by standard practices. A settlement was reached that would let the accountants off the hook if they waived any objection to the Rus firm representing both the Hill Williams trustee and the accountants in a suit against their malpractice insurer. Early on, however, the accountants sent letters to the Rus firm questioning the merits of the suit. The firm responded by promptly dumping the accountants, despite their pleas to continue the relationship. In his ruling, Sills called it “pure overkill” for the firm to end its representation so perfunctorily. “Clients have every right to ask questions of their lawyers as to the basis of a lawsuit,” he wrote, “and the asking of such questions is not a reasonable basis to claim a ‘break down in communications.’ “If there was any ‘break down,’” he continued, “it was the lawyers who did not want to answer legitimate questions posed by their clients as to the validity of their clients’ claims against their malpractice carrier.” Sills also engaged in what he called “some out-and-out speculation” in saying the Rus firm could have thought it was being “set up” by the accountants. Still, if the Rus firm had a valid reason for dumping the accountants, Sills said, it should have expressed it better in court. “Indeed,” he wrote, “throughout this litigation it has never attempted to explain why, given the explicit willingness of the accountants to cooperate in the litigation voiced by the accountants prior even to the filing of the withdrawal motion, its heart continued to remain hardened against its clients.” As it is, he held, the Rus firm isn’t getting any of the $806,250 it demanded. The case is Rus, Miliband & Smith v. Conkle & Olesten, 03 C.D.O.S. 10112.

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