This section contains the nature of the case and procedural background.

Vanacore (P) filed an action against his former attorney, Kennedy (D). That particular action was dismissed against D on grounds of involuntary bankruptcy. P also sued D’s law partnership of Eshram and Kennedy (D1). The facts are as follows: P formed Space Realty in 1965 and it acquired property. P entered into an agreement with Lium to convey to Lium all of the issued and outstanding stock in Space Realty. Lium paid P $365,000 in cash and signed a $950,000 note secured by a mortgage on the property. D represented P during the transaction. The terms of the note were 8.5% interest with payments of $7,649.99 due each month from June 1, 1980, until May 1, 1995. On May 1, 1995, the remaining balance accrued and interest was due at D’s office. P then assigned a 35% interest in the note to his now ex-wife. She agreed to accept a reduced monthly payment for the term of the Note and Mortgage, and she would be paid the shortfall when the note came due in May 1995. Around 1989, P failed to receive monthly payments due under the note. Lium had made the payments, but D failed to convey them to P. D lied and told P that Lium had failed to pay. An agreement to extend the note was negotiated under which the payments were to continue until May 2000, but the ex-wife was to get a $50,000 principal sum payment. On September 1992, Lium contacted D and offered a buyout of $257,191.78 on the note. It was rejected by P. D in fact, told Lium that it had been accepted. D prepared all the papers, they were duly recorded, and the monies were paid over. D only forwarded $97,843.92 to P as that was the alleged arrearages on the note and D kept the rest for himself. D continued sending checks to P and described them as Lium’s mortgage payments. In 1991, D falsely represented to P that he had commenced a mortgage foreclosure, but by May 1996, P discovered the frauds of D. P sued D1 under six causes of action. From 1990 on D was under investigation by the State Bar for concealing information from a different client for 8 years. D1 was fully aware of the nature of the charges and allegations and the false representations by D to the other client.

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