Janik v. Rudy, Exelrod & Zieff, 119 Cal. App. 4th 930 (2004)

Plaintiffs’ attorneys, who produced a class action recovery of more than $90 million for their clients, were sued by those same clients for malpractice because the attorneys had failed to allege a claim for Unfair Competition (Business & Professions Code § 17200) along with the single claim they did assert for unpaid overtime. Plaintiffs in this case are more than 2,400 claims representatives of Farmers Insurance Exchange who proved in a jury trial that they were owed more than $90 million in unpaid overtime because they had been misclassified as exempt employees. In this malpractice lawsuit, plaintiffs alleged that their lawyers had negligently failed to assert a § 17200 claim, which could have resulted in plaintiffs’ recovering one more year’s worth of unpaid overtime wages. The trial court dismissed the malpractice action on demurrer, but the Court of Appeal reversed, holding that the Court was “in no position to decide as a matter of law that class counsel fulfilled its duties to the class by foregoing their claim for an additional year of recovery.”