Facts

Robert Fish, an attorney, sued to recover a loan made to Alexander Bobarykin. In his suit, Fish claimed breach of contract and fraud. Bobarykin filed a cross-claim for disgorgement of legal fees against Fish and Rutan & Tucker, Fish's firm. Fish and Rutan & Tucker also filed cross-claims against each other.

PLAINTIFF'S CONTENTIONS:
Fish contended that the loan to Bobarykin was an arms length personal loan to a non-client who had the loan agreement reviewed and approved by independent counsel. Fish sought contractual indemnity from Rutan & Tucker for his legal fees incurred in defending the Bobarykin cross-claim based upon the claim that the forfeiture provision of the Rutan & Tucker partnership agreement, requiring former partners who practice in Orange County to waive their right to have the firm pay the legal fees incurred to defend malpractice claims, was an unenforceable penalty.

DEFENDANT'S CONTENTIONS:
Bobarykin claimed any contract between them was rendered void because Fish was in violation of Rule of Professional Conduct 3-300. He claimed that Fish recommended that he form Supracarbonic and that Fish insisted on financing it. Bobarykin claimed that Fish ran up legal fees for patents that Supracarbonic could not afford. He further claimed that many of the patents lapsed because he could not afford to keep them. Bobarykin claimed that Fish made breaches in his ethical duty warranting disgorgement of legal fees.

CROSS-CLAIMANT'S

Result

The court found that Rutan & Tucker was entitled to indemnity from Fish in the amount of $236,960, plus costs of $3,929. Rutan & Tucker agreed to waive its claim for fees against Bobarykin and Fish agreed to accept a $40,000 payment, without interest, from Bobarykin in two years in exchange for releasing his claim for $210,000 in loans plus interest and fees. The court also found that Fish engaged in willful misconduct relieving Rutan & Tucker from the obligation to pay the $500,000 of his defense.

Other Information

Fish has filed an appeal. FILING DATE: Aug. 31, 2009.