1768 [Deleted 1728-1767] JALAL v. RooT 109 Cal.App.4th 1768; 1 Cal.Rptr.3d 689 [June 2003] Opinions (Boghos v. Certain Underwriters at Lloyd’s and People v. Robertson) on pages 1728-1767 omitted. REVIEWS GRANTED* [No. G029474. Fourth Dist., Div. Three. June 9, 2003.] FARIDEH JALALI, Plaintiff and Respondent, v. WALTER H. ROOT III, Defendant and Appellant. SuMMARY The trial court entered a judgment for a legal client in her legal malprac- tice action against her attorney. The attorney had obtained a settlement for $2.75 million in the client’s lawsuit against her former employer for racial discrimination and sexual harassment, but the attorney inaccurately advised her that she would not be required to pay income tax on his contingency fee. In the malpractice action, the jury awarded the client $310,000, the differ- ence in the amount of taxes she was required to pay. The malpractice award included a $248,160 quasi-contract award for the same erroneous tax advice. (Superior Court of Orange County, No. 810531, Ronald Kline, Judge.) The Court of Appeal reversed the judgment for $310,000, including the $248,160 quasi-contract award, and remanded with directions to enter a new judgment in the attorney’s favor. The court held that the client failed to prove that any damages had been caused by the inaccurate information. Plaintiff did not attempt to show that with a proper understanding of the tax implications of the settlement, she would have held out for a larger settle- ment or obtained a larger award from a jury. Further, plaintiff failed to show that she had been damaged by the loss of her right to publicly expose her former employer. Also, it could not be inferred that defendant had violated his fiduciary duty by merely benefiting from a settlement or by being aware of its potential tax consequences. The court also held that plaintiff's award of damages based upon a quasi-contractual theory of recovery was invalid, since in substance, the quasi-contract claim was inextricably intertwined with the invalid malpractice claim. (Opinion by Sills, P. J., with Rylaarsdam and O’Leary, JJ., concurring.) HEADNOTES Classified to California Digest of Official Reports (la-Id) Attorneys at Law § 25—Malpractice Actions—Proof of Dam- ages—Where Attorney Failed to Accurately Advise Client of Tax *Reprinted without change in the Review Granted Opinions Pamphlet to permit tracking pending review and disposition by the Supreme Court.JALALI v. Root 1769 109 Cal.App.4th 1768; 1 Cal-Rptr.3d 689 [June 2003] Consequences of Settlement—In a legal client’s legal malpractice action against her attorney, who had incorrectly told her that the contingency fee portion of the settlement in her lawsuit was not subject to income tax, plaintiff failed to prove that any damages had been caused by defendant’s alleged malpractice. Thus, the jury’s award of the amount of taxes plaintiff paid on the fees was improper. Generally, the trial-within-a-trial method is based on the premise that, had an attorney used the applicable standard of care, a client would have obtained a better result. In this case, plaintiff did not even attempt to show that with a proper understanding of the tax implications of the settlement, she would have held out for a larger settlement or obtained a larger award from a jury. Further, plaintiff made no attempt to show she could have done better had she not accepted the settlement, and thus she failed to demonstrate a causal relationship between her accep- tance of the settlement and any pecuniary loss. She also failed to show that she had been damaged by the loss of her right to publicly expose her former employer. It was untenable to conclude that no monetary value at all was placed on the satisfaction of having a public trial, since implicit in her claim against defendant was the premise that there was an amount at which she would have settled and sacrificed the opportu- nity to expose her employer. [See 1 Witkin, Cal. Procedure (4th ed. 1996) Attorneys, § 334 et seq.; West’s Key Number Digest, Attorney and Client 112.] (2) Attorneys at Law § 25—Malpractice Actions—Proof of Damages— Trial-within-a-trial Method.—In Jegal malpractice actions, the usual way by which disappointed clients demonstrate damages is the trial- within-a-trial method, which is based on the premise that, had the attorney not fallen below the applicable standard of care, the client would have obtained a better result. The degree to which the trial- within-a-trial method is required of a plaintiff in a legal malpractice suit is not settled. But on balance the trial-within-a-trial method is the most effective safeguard yet devised against speculative and conjec- tural claims. It is a standard of proof designed to limit damages to those actually caused by a professional’s malfeasance. No other approach has been accepted by the courts. (3) Attorneys at Law § 21—Malpractice Actions—Elements—Causa- tion.—In a legal malpractice action, a plaintiff must show a causal relationship between the alleged malpractice and some actual loss or damage. (4) Attorneys at Law §31—Compensation of Discharged Attor- neys.—A client has the unilateral right to discharge his or her attorney1770 JALALI v, ROOT 109 Cal.App.4th 1768; 1 Cal. Rptr.3d 689 [June 2003] with or without cause at any time and the attorney has only a right to quantum meruit recovery and only then in the event of the contingency contemplated by the contract, when a contingency fee contract is involved. (5) Attorneys at Law § 21—Malpractice Actions—Breach of Fiduciary Duty.—In a legal client’s legal malpractice action against her attorney, who had incorrectly told her that his contingency fee portion of the settlement in her lawsuit was not subject to income tax, it could not be inferred that defendant had violated his fiduciary duty by merely benefiting from a settlement or by being aware of its potential tax consequences. Thus, the jury’s award of the amount of taxes plaintiff paid on the fees was improper. All contingency fee attorneys benefit from large recoveries for their clients, and there was no evidence plaintiff ever told defendant of her preference for a public trial if her net recovery, after the payment of taxes, did not reach a stated amount. In addition, the settlement amount in this case was likely to be the maximum amount payable when compared with similar cases with more egregious facts. Further, no evidence supported a conclusion that defendant deliberately gave misleading information about the tax con- sequences of the settlement, since the law was unsettled with regard to the federal tax treatment of contingency fees. (© Attorneys at Law §21—Malpractice Actions—Quasi-contract Theory of Recovery.—In a client’s legal malpractice action against her attorney, an award of damages that was based upon a quasi- contractual theory of recovery, but was specifically included in the malpractice award, was improper, since in substance, the quasi-contract claim was merely a restatement of the invalid malpractice claim. In the client’s underlying civil rights lawsuit, the attorney incorrectly told his client that the contingency fee portion of a settlement was not subject to income tax, but the client failed to prove that any damages had been caused by the attomey’s alleged malpractice. Thus, the quasi-contract award, which sought reduction of the contingency fee, was also im- Proper, since it was not independent of the malpractice action. In addition, the client had not incurred any additional fees to undo the underlying settlement agreement or contest the taxation of the civil tights award. The quasi-contractual claim for money had and received (the contingency feces) failed when considered under classic contract doctrine. Until an express contract is avoided, an implied contract, which is essential to an action on a common count, does not exist. Further, if the benefits conferred under an express contract cannot be returned, an action for money had and received does not lie. Thus, in