Mayhew

The law favors arbitration, and agreements to arbitrate are liberally construed. But what happens when a lawyer who drafts a retainer agreement containing an arbitration clause seeks to use it against his client with whom he has engaged in a side business transaction?

The answer, like the transaction, does not bode well for the lawyer. There are higher presumptions, designed to protect clients in their business dealings with their attorneys. The onus is on the attorney to show no advantage was taken and that the client was given full and frank disclosure.

The defendant attorney here fails to dispel the presumption that he took undue advantage. We refuse to allow him to benefit by his own broad draftsmanship to invoke an arbitration clause for apparently separate (and somewhat suspect) financial dealings with the plaintiff client and affirm the trial court’s refusal to compel arbitration.

I

In November 1993, D. Kenneth Mayhew filed suit against his attorney, Charles F. Benninghoff III, for conversion, breach of fiduciary duty and imposition of a constructive trust. Mayhew alleged he entrusted funds in February 1992 in the amount of $607,700 to Benninghoff in…