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Moncharsh v. Heily & Blase

California Supreme Court
832 P.2d 899 (1992)


Facts

Philip Moncharsh (plaintiff) was an attorney employed by Heily & Blase (defendant), a law firm. Under the terms of the parties’ employment contract, if Moncharsh left Heily & Blase and continued to represent any of Heily & Blase’s clients, then Moncharsh must pay 80 percent of the fees obtained from that client to Heily & Blase. The employment contract also required that any disputes arising from the agreement must be submitted to binding arbitration. Two years after he was hired, Moncharsh left the firm and took six clients with him. Moncharsh had represented five of those clients before joining Heily & Blase. The sixth client, Ringhof, had retained Moncharsh less than two weeks before Moncharsh left the firm. Heily & Blase sought 80 percent of the fees obtained from those six clients, and the parties submitted the issue to arbitration. The arbitrator determined that Heily & Blase was entitled to 80 percent of the fees obtained from each of the clients, except for Ringhof. Because Ringhof had hired Moncharsh right before Moncharsh left the firm, the arbitrator determined that splitting Ringhof’s fees would be unconscionable. Moncharsh petitioned the trial court to vacate and modify the arbitrator’s order, arguing that the fee-splitting violated law, public policy, and the State Bar Rules of Professional Conduct. The trial court affirmed the arbitrator’s award. Moncharsh appealed to the California Court of Appeal, which affirmed. The California Supreme Court then granted review.

Rule of Law

Issue

Holding and Reasoning (Lucas, C.J.)

Concurrence (Kennard, J.)

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