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In October 1985, the California Supreme Court rejected Rosenthal's appeal of the multimillion-dollar judgment against him for legal malpractice, and upheld conclusions of a trial court and a Court of Appeal that Rosenthal acted improperly.
In April 1986, the U. S. Supreme Court refused to review the lower court's judgment.
In June 1987, Rosenthal filed a $ 30 million lawsuit against lawyers he claimed cheated him out of millions of dollars in real estate investments.
He also named Day as a co-defendant, describing her as an " unwilling, involuntary plaintiff whose consent cannot be obtained ".
Rosenthal claimed that millions of dollars Day lost were in real estate sold after Melcher died in 1968, in which Rosenthal asserted that the attorneys gave Day bad advice, telling her to sell, at a loss, three hotels, in Palo Alto, Dallas and Atlanta and some oil leases in Kentucky and Ohio.
Rosenthal claimed he had made the investments under a long-term plan, and did not intend to sell them until they appreciated in value.
Two of the hotels sold in 1970 for about $ 7 million, and their estimated worth in 1986 was $ 50 million.
In July 1984, after a hearing panel of the State Bar Court, after 80 days of testimony and consideration of documentary evidence, the panel accused Rosenthal of 13 separate acts of misconduct and urged his disbarment in a 34-page unsigned opinion.
The State Bar Court's review department upheld the panel's findings, which asked the justices to order Rosenthal's disbarment.
He continued representing clients in federal courts until the U. S. Supreme Court ruled against him on March 21, 1988.
Disbarment by the Ninth U. S. Circuit Court of Appeals followed on August 19, 1988.
The Supreme Court of California, in affirming the disbarment, held that Rosenthal engaged in transactions involving undisclosed conflicts of interest, took positions adverse to his former clients, overstated expenses, double-billed for legal fees, failed to return client files, failed to provide access to records, failed to give adequate legal advice, failed to provide clients with an opportunity to obtain independent counsel, filed fraudulent claims, gave false testimony, engaged in conduct designed to harass his clients, delayed court proceedings, obstructed justice and abused legal process.
Terry Melcher stated that it was only Martin Melcher's premature death that saved Day from financial ruin.
It remains unresolved whether Martin Melcher was himself duped.
Day stated publicly that she believed her husband innocent of any deliberate wrongdoing, stating that he " simply trusted the wrong person ".
According to Day's autobiography, as told to A. E. Hotchner, the usually athletic and healthy Martin Melcher had an enlarged heart.
Most of the interviews on the subject given to Hotchner ( and included in Day's autobiography ) paint an unflattering portrait of Melcher.
Author David Kaufman asserts that one of Day's costars, actor Louis Jourdan, maintained that Day herself disliked her husband, but Day's public statements regarding Melcher appear to contradict that assertion.

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