Plaintiffs Manage To Distance Themselves From Discovery Response, Allowing Them To Avoid Having To Arbitrate Their Malpractice Claims.
By a deft interrogatory, Defendant tried to corner Plaintiffs into having to arbitrate their malpractice claims in LADT, LLC v. Greenberg Traurig, LLP, B246649 (2/1 Nov. 25, 2014) (Miller, Rothschild, Johnson) (unpublished).
The gravamen of Plaintiffs’ claim was that Greenberg Traurig drafted real estate documents “in a sloppy, ambiguous, inconsistent, incomprehensible manner that led to costly litigation and multimillion-dollar judgments against some of the plaintiffs.”
Greenberg, Traurig zinged Plaintiffs with an interrogatory, asking if they contended the law firm “had an unwaived conflict of interest in its representation”. Plaintiffs swallowed the bait and answered, “Yes.” Plaintiffs’ answer set them up for Greenberg Traurig’s motion to compel arbitration, because Plaintiffs had signed a Conflict Waiver and Arbitration Letter including an arbitration clause. The trial court, however, denied the motion to compel, and the law firm appealed.
Why? The arbitration provision only applied to claims arising from or relating to the Conflict Disclosure and Waiver Agreement. Even though Plaintiffs answered the interrogatory by contending that there was an unwaivable conflict, Plaintiffs were able to nimbly distance themselves from their discovery response, “saying in essence that, even though such a conflict existed, they were not pursuing any claim based on any conflict of interest.”
Put another way, the gravamen of Plaintiffs’ claim – malpractice – was simply outside the scope of the narrow arbitration agreement once Plaintiffs clarified that they were not pursuing a claim based on conflict of interest.