Ethics in Brief


Distinguishing Between Negligence and a Breach of Fiduciary Duty

Lawyers are fiduciaries. They owe duties to their clients, including a duty of competence. But not all duties that lawyers owe are fiduciary duties. For example, standing alone, a single act of simple negligence in the provision of legal services does not mean that a lawyer has breached a fiduciary duty.

A couple of months ago, the Second Appellate District addressed this issue in Broadway Victoria, LLC v. Norminton, Wiita & Fuster (2017) 10 Cal.App.5th 1185. There a client alleged that its lawyers failed to advise it of two significant things: a potential malpractice claim against predecessor counsel and the potential opportunity to obtain clarification from a bankruptcy court on an assignment that it had approved. This latter “failure to advise” was significant because standing was one of the primary points of contention in a state court lawsuit and one of the issues was whether ancillary claims had been transferred as part of the assignment. Further, resolving the issue before the bankruptcy court would likely have been less expensive and more expeditious than the state court option.



The takeaway is a reminder that breach of fiduciary duty is a concept which, although it comprises legal malpractice, is separate and distinct from traditional professional negligence. The Broadway Victoria opinion reinforces this concept by embracing the premise that the Second District quoted in Pierce v. Lyman (1991) 1 Cal.App.4th 1093 more than a quarter of a century ago. “The basic fiduciary obligations are twofold: undivided loyalty and confidentiality.” (Id. at p. 1102.)  

-- David Majchrzak 
