Newport Beach California Business Litigation Law Blog

When you work with professionals, you expect to receive competent service from someone who adheres to all reasonable standards for the field. Whether it's a real estate agent whom you asked to help secure a new office location for your business or an investment professional entrusted with the retirement funds of your staff, you need to know that the professional has your best interests in mind.

Although most professionals in critical positions comport themselves ethically, there are some people who do not. Encountering a professional willing to breach fiduciary duty can cost your business a lot of money and could even damage your reputation if it impacts your ability to complete projects or fulfill contracts.

When parties enter into a contractual agreement, they expect all parties to make good on their commitment to honor the contract. But often contracts are hastily written and do not properly address future concerns. Addressing these issues during the drafting and negotiating process will help avoid costly litigation and increase the chance of a favorable verdict or settlement if you must go to court.

Arguing with your business partner in California could have some serious consequences for everyone involved-- from you and your partner to corollary stakeholders, such as investors and employees. At Klein & Wilson, we know that litigation is always in the back of business owners' minds when disagreements come up as to the meaning of a contract, ethical standards or even simple policy decisions.

We are by no means reticent to take things to the courtroom if necessary, but we often urge our clients to take every step possible before pursuing a business law issue formally. This typically means jointly developing a de-escalation plan with our client, ideally bringing the other parties to the table during the process. Unfortunately, the opposing partner is not always willing to see past personal issues and focus on our discussion of the business. We tend to proceed to litigation only if it seems we must go to court to end the partner dispute satisfactorily.

It's frustrating to think that an attorney your company pays for representation would act in a way that does not serve the firm's best interests. Unfortunately, it happens. Businesses in California and across the country face this kind of risk every day. Violations of trust can occur in any number of ways – overbilling for services, a conflict of interest, or breach of fiduciary duty.

In one recent case outside of California, the claim made by plaintiffs of a family held company was that an attorney hired to draft an operating agreement in connection with a firm management dispute. Because of the actions he took, plaintiffs alleged that he helped a corporate manager in a scheme that saw the manager secretly pay himself $1.5 million. That manager, who happened to be a member of the family, then left the company.