Day v. Rosenthal

Beginning in 1953, Doris Day Melcher and Martin Melcher (the Melchers) (defendants) retained Jerome B. Rosenthal (plaintiff) as attorney to handle all of their business and financial affairs. Then, in 1956, the parties signed a written retainer agreement pursuant to which Rosenthal was entitled to receive a 10 percent interest in all that the Melchers owned and earned. Litigation and services in connection with the production of motion pictures and radio and television shows were not included in the basic compensation. The retainer was so broad that it placed Rosenthal in complete control of the Melchers’ financial affairs, but Rosenthal never informed the Melchers of their right to obtain independent legal counsel before signing the retainer agreement. Between 1953 and 1968, when the Melchers terminated his services, Rosenthal received an excess of $2.5 million from the Melchers, not including other monies he acquired without their knowledge or consent; he mismanaged the Melchers’ financial interests; and he involved himself in business ventures with the Melchers and seized his profits ahead of their own, among numerous other examples of gross mismanagement and abuse. Following his termination, Rosenthal filed suit against the Melchers for breach of the retainer agreement. The Melchers answered, cross-complained, and filed affirmative actions for legal malpractice, among others. The trial court entered judgment in favor of the Melchers. Rosenthal appealed.