October 11, 2008 (Original publish date) • By Dennis Beaver
Nick trusted his lawyer, believing advice which sucked him into a completely preventable lawsuit. The 45-year-old auto mechanic never obtained a second opinion-about the case or his lawyer’s reputation for competence and honesty — until he was billed over $30,000 in attorney fees and faced the prospect of losing $100,000 at trial.
“I felt that trust was something you had to assume in an attorney — client relationship, and that he would act in my best interests. Isn’t that required, legally, that a lawyer act in the client’s best interest?” he asked.
Of course, Nick was correct. Lawyers have what we call a fiduciary (good faith) relationship in which we are ethically obligated to put the client’s interests first. An attorney is legally required to look at economic realities and advise clients what they face if early settlement is not achieved.
At the time we met, Nick was less than a month away from trial.
For Sale — Corvette in great condition
It all began with an ad for a 1971 Corvette Stingray Nick placed on E-Bay. “Body in excellent mechanical condition and car runs well.”
“I like to buy and sell old cars, putting a few dollars into them, and that’s what I did with this Corvette. I’ve sold a lot of cars on e-bay with no problem — until this time,” he explained.
Roger spotted the ad, met Nick at his shop, and took the Corvette out for a drive. He liked the car, and paid $9,500, signing an “As Is” contract which Nick handwrote.
About four days later, Roger phoned Nick, informing him that the car wasn’t really in such good shape as he thought, and would like to bring it back for a refund. Nick agreed.
“When he came back to my shop, Roger wanted $2,000 more than the purchase price, as he had installed a stereo and did some other work before discovering mechanical problems which he claimed were there. I didn’t have a problem with the refund, but felt that I should not have to pay for those items. Unfortunately, this became a shouting match and he left, threatening to file a lawsuit if I did not pay him,” Nick related.
“Several weeks later, I received a letter from an attorney insisting that I immediately refund the $9,500 purchase price, $2,000 for the stereo, plus her attorney fees of $500. She claimed that I should have been licensed as a used car dealer by the Motor Vehicle Department, and without that license, I was in violation of a number of California Consumer Protection laws,” Nick explained.
“Her letter also said that even though I had sold this car As — Is, this was meaningless, because of the way I described it in my e-bay ad, and that the As — Is contract did not meet the requirements of California law. She said that the buyer had a right to rely on my statements of the car’s condition since I am a mechanic,” he added.
“Go Pound Sand”
Nick handed me the letter. I read it and asked him these questions:
(1) Did you do any kind of an inspection — smog, scope, put it up on a rack-before placing the ad? His answer: “Beyond driving it, no. It seemed in good shape, but I did not conduct a thorough inspection.”
(2) When you buy and sell these cars, do you intend to or actually make a profit? “Yes, while this is a hobby, I do make a profit.”
(3) Are you licensed as a used car dealer? He was not.
I put the letter down, looked at Nick and told him he was in violation of a number of Consumer Protection laws. “If you had come to me with that letter, I would have picked up the phone, given her a call, and gotten the matter resolved immediately,” I told the now pale and fearful man sitting in my office.
“Your buyer had a right to rely on your statements since you are an auto mechanic, Nick! It’s certainly foreseeable that he’d put something into the car, like a stereo or paint job. Which is better, paying a couple of thousand dollars more or facing a long, expensive lawsuit and paying their attorney fees?”
“That’s not what Mr. X told me. He said they didn’t have a case and that I did not even have to refund anything.”
Then Nick showed me his lawyer’s letter. It was guaranteed to move the buyer’s attorney from a negotiation posture to all out litigation. It stated, in so many words, go pound sand — sue if you want to.
No Attempt to Settle — No Warning of What Nick Faced
Nick’s lawyer could easily have offered to refund the purchase price and let the seller and buyer take the matter into Small Claims Court over the, roughly, $2,500 difference. After all, Nick had earlier agreed to the refund.
I picked up the phone, and within minutes got his case settled. In speaking with the buyer’s attorney that day, I discovered that Nick was more than a victim of an incompetent attorney. His lawyer filed baseless motions, and Nick was ordered to pay the buyer’s attorney fees — even before the case was over!
Total amount of money Nick wound up spending: $48,500.
Had he obtained a second opinion at the very beginning, I would have not had this story to write.
There are times when, instead of trusting your attorney, you would be better off to trust your own gut feelings. This is especially true where the cost of settling a case is minimal in comparison to getting into a full-blown battle.
This is where it can be critical to get a second opinion from someone knowledgeable in your specific area of the law whose reputation you have checked out.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.