Kansas Appeals Court Says Suspended Lawyer Did Not Demonstrate an Interest to Justify Intervention – But If He Had, It Would Have Been Barred By the Public Policy Against Champerty

Kansas Appeals Court Says Suspended Lawyer Did Not Demonstrate an Interest to Justify Intervention – But If He Had, It Would Have Been Barred By the Public Policy Against Champerty

A Kansas appellate court affirmed a lower court decision to reject the motion to intervene of a suspended lawyer to intervene in a personal injury case, saying that the same Kansas public policy against champerty would have barred his interest – if he had demonstrated a sufficient interest to justify intervention.  In Massali v. Farmers Ins. Co., No. 117464 (Kan. Ct. App. Apr. 18, 2018), the Kansas appellate court summed up the case as follows:

Maria E. Massali was injured in a car accident on July 18, 2012.  She and her husband, Hamid Massali, sued Farmers Insurance Company, Inc. (Farmers) for money they believed they were owed under their automobile insurance policy.  Laurence Jarvis represented them until the Kansas Supreme Court indefinitely suspended him from the practice of law.  Shortly after Jarvis’ suspension, the Massalis attempted to assign their claim against Farmers to him.  Jarvis then filed a pro se motion to intervene or be substituted for the Massalis.  The district court denied Jarvis’ motion, finding he had failed to demonstrate that he had an interest in the lawsuit and that the Massalis could not adequately represent his interest.

Jarvis appeals the district court’s order denying his motion to intervene or be substituted.  He also appeals the court’s orders setting aside a default judgment against Farmers because Farmers was not properly served.  Finally, he appeals the court’s order granting partial summary judgment to Farmers because the Massalis conceded two of their claims should be dismissed.  We affirm.

The court said that the attorney’s claim of interest was based on an assignment that failed for lack of consideration and other reasons.  The court then addressed the issue of public policy, saying:

As a final note, Farmers argues that even if the assignment had been supported by consideration, it would be unenforceable as contrary to public policy.  Farmers generally points to Kansas Rule of Professional Conduct 1.8 (2018 Kan. S. Ct. R. 309) on Conflicts of Interest. KRPC 1.8(j) provides that ‘[a] lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client’ with the exceptions of an attorney’s lien or a reasonable contingent fee.  Comment 16 toKRPC 1.8 explains that this rule ‘has its basis in common law champerty and maintenance and is designed to avoid giving the lawyer too great an interest in the representation.’  Champerty is contrary to public policy.  Boettcher v. Criscione, 180 Kan. 484, 485, 305 P.2d 1055 (1957).  Thus, even if Jarvis had been able to demonstrate sufficient consideration for the assignment, it would still arguably be unenforceable as against public policy because he acquired the Massalis’ entire claim against Farmers.  See, e.g., Petty v. City of El Dorado, 270 Kan. 847, 854, 19 P.3d 167 (2001) (“Contracts in contravention of public policy are void and unenforceable.”).

The full opinion is available here.

Comments are closed.