Attorney Fees: Quantum Meruit Fees Allowed Despite Actual Undisclosed Conflict

  The California Supreme Court agrees with the Court of Appeals in Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Company, Inc. and holds that an actual undisclosed conflict of interest renders an attorney fee agreement, including the arbitration clause, unenforceable against public policy.

  Contrary to the Court of Appeals, however, it concludes that the ethical violation does not “categorically disentitle the law firm from recovering the value of the services it rendered to the manufacturer.” Principals of equity may entitle the law firm to “some measure of compensation” as determined by the trial court.

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