Desert Outdoor Advertising v. Superior Court

A lawyer represents a client under a fee agreement that does not contain an arbitration clause. As sometimes occurs these days, the lawyer changes firms in the middle of the litigation. The client signs a new engagement and fee agreement that includes an arbitration clause set forth in understandable terms. Is it the client’s responsibility to read the fee agreement, or does the scope of the lawyer’s fiduciary duty require the lawyer to separately explain the arbitration clause to the client, so that the client’s admitted failure to fully read the agreement is “reasonable” and a basis to avoid arbitration? Under the circumstances of this case, involving clients who are sophisticated businesspersons, we conclude there was no duty to separately explain the arbitration clause.

Petitioners Desert Outdoor Advertising (DOA), a Nevada corporation, and Paul Jurich are the plaintiffs in a professional negligence action against real parties in interest Gerald M. Murphy and his law firm, Luce, Forward, Hamilton and Scripps, LLP (Luce Forward). Real parties in interest filed a petition to compel arbitration, which the trial court granted. Petitioners seek a writ of mandate to set…