allen letgolts and gabriella plattner,

Plaintiffs,

v.

SCOTT MARKS, THE MARKS LAW FIRM, INC., SANDRA LOCKMAN, ENGSTROM, LIPSCOMB & LACK, et al.

Defendants.

Case No.: BC537637

Hearing Date: March 28, 2018

[TENTATIVE] order RE:

defendant the marks law firm’s Motion for summary judgment

BACKGROUND

This action arises out of Defendant Scott Marks’ (“Marks”) alleged representation of Allen Letgolts and Gabriella Plattner (“Plaintiffs”) in a lawsuit, Gabriella Plattner, et al. v. Martiza Hartnett, et al., LASC Cas No. BC425940 (“The Underlying Action”), from November 2009 through July 2012. As set forth in the third amended complaint (“TAC”), Plaintiffs allege that Marks closed his law firm, The Marks Law Firm, (“Marks Law”) in March 2012 and moved his practice to Defendants Engstrom, Lipscomb & Lack (“ELL”), where he continued to represent Plaintiffs until his withdrawal on July 27, 2012. (TAC ¶19; 23.) The Underlying Action arose out of the faulty construction of Plaintiffs’ residence. Plaintiffs asserted the Underlying Action against the contractor, Pinchevskiy; Plaintiffs’ homeowner’s insurance carrier, Farmer’s; and the insurance agent, Hartnett. Plaintiffs allege that Defendants settled their cause for less than its true value, and that Defendants failed to obtain a default judgment against Pinchevskiy. Although Plaintiffs judgment was eventually obtained against Pinchevskiy in June 2015, Pinchevskiy’s insurance carrier is now insolvent and unlikely to pay any of the judgment owed to Plaintiffs. (TAC ¶ 27.) Plaintiffs allege that they would have been able to collect the judgment if default had been pursued in 2012, when Pinchevskiy’s insurer was solvent and had a good rating. (TAC ¶ 28.)

Plaintiffs assert causes of action for (1) professional negligence; (2) breach of contract; (3) breach of fiduciary duty; (4) intentional misrepresentation; and (5) unfair competition under Business and Professions Code §17200. Plaintiffs assert all five causes of action against Marks Law.

REQUEST FOR JUDICIAL NOTICE

Marks Law’s request for judicial notice is GRANTED. (Cal. Evid. Code §452.)

Plaintiff’s request for judicial notice is GRANTED. (Cal. Evid. Code §452.)

EVIDENTIARY OBJECTIONS

Pursuant to CCP § 437c(q), “the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.”

The Court rules as follows on Defendant’s evidentiary objections:

Overruled.

Overruled.

Overruled.

DISCUSSION

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (CCP § 437c(c).) There is a triable issue of fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850.) On its motion for summary judgment, the plaintiff maintains the burden that each of the elements has been proved and that there is no defense available, while on its motion the defendant must persuade the court that one of the elements in question cannot be established or that there is a complete defense. (Id.) Summary judgment motions are defined by the material allegations in the pleadings. (Baptist v. Robinson (2006) 143 Cal. App. 4th 151, 159.)

A. Statute of Limitations

An action against an attorney for a wrongful act or omission arising in performance of professional services shall be commenced within one year after the plaintiff discovered, or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission. (CCP §340.6.) The statute of limitations is tolled when the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred. (Ibid.) The statute of limitations is also tolled during the time that plaintiff has not sustained actual injury. (Ibid.) In all other cases other than actual fraud, whether the theory of liability is based on the breach of an oral or written contract, a tort, or a breach of fiduciary duty, the one year statute period applies. (Levin v. Graham & James (1995) 37 Cal.App.4th 798, 805.) Actual injury is generally a question of fact, however if the parties agree on the sequence of events and any other material matters, the court may then determine on summary judgment the point at which the fact of damage became palpable and definite even if the amount remained uncertain, taking into consideration all relevant circumstances. (Adams v. Paul (1995)11 Cal.4th 583, 591.)

The client has already suffered damage when he discovers his attorney’s negligence. (Ibid.) It is the discovery of facts constituting the wrongful act or omission that triggers the statute of limitations, not the discovery that such facts constitute professional negligence. (Worton v. Worton (1991) 234 Cal.App.3d 1638, 1649.) Even a suspicion of wrongdoing triggers a duty to file a malpractice action. (Peregrine Funding, Inc. v. Sheppared Mullin Richter & Hamptom LLP (2005) 133 Cal.App.4th 658, 685.)

Marks Law contends that all of Plaintiff’s causes of action, not sounding in fraud, are time barred. Marks Law sets forth evidence that Plaintiff threatened to sue Marks on November 11, 2012 for malpractice based on insufficient research of the liability policy that afforded coverage to the contract. (MSJ Exh. O.) That same liability policy and the alleged failure to investigate the policy is the cause of Plaintiff’s alleged damages in this malpractice case. Further, when Marks withdrew from the case on July 27, 2012 Plaintiffs had knowledge that Marks had done so without having obtained the default judgment against Pinchevskiy. (UMF 11, 12.) Plaintiffs were represented by new counsel at a case management conference on July 31, 2012 where substitution of attorney and entry of default judgment were discussed. (UMF 14.) As such, the statute of limitations on Plaintiff’s malpractice case started to run at the latest on November 11, 2012 and Plaintiff’s current claims against the Marks Law Firm, except for intentional misrepresentation, are untimely.

B. Fourth Cause of Action – Intentional Misrepresentation

The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages. (See Civil Code §1709.) Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Negligent misrepresentation consists of the same elements, however instead of knowledge of falsity, a plaintiff must allege that the Defendant lacked a reasonable ground for believing the representation to be true. (Goonewardene v. ADP, LLC (2016) 5 Cal.App.5th 154, 175.)

Plaintiff’s TAC alleges that Defendants misrepresented to Plaintiffs that the case preparation against Hartnett and Farmers was as thorough as necessary, in order to induce them to settle those claims. It is undisputed that Plaintiffs no longer claim that they were damaged by entering into the Farmers/Harnett settlement. (Opposition 15:18-19.) Plaintiffs do not oppose summary adjudication as to the Fourth Cause of Action. (Opposition 15:23; 16;1-2.)

G. Causation for Plaintiff’s Damages

Marks Law further moves for summary judgment on the grounds that Plaintiff’s cannot establish the elements causation or damages necessary for any of their five causes of action. The “case within a case” methodology for determining causation and damages applies in all legal malpractice actions involving a client’s assertion that his attorney has either negligently prosecuted or defended that client’s claim. (Viner v. Sweet, 30 Cal.4th 1232, 1239.) Thus when a client seeks to recover damages for his attorney’s negligence in the prosecution or defense of the client’s claim, the client must prove that ‘but for that negligence a better result could have been obtained in the underlying action’. (Id. at 1240.) It serves the essential purpose of ensuring that damages awarded for the attorney’s malpractice actually have been caused by the malpractice. (Ibid.)

Plaintiffs have not provided sufficient evidence to establish the element of causation, specifically whether but for Marks’ negligence they would have been able to obtain a more favorable result in the underlying action against Pinchevskiy. The most favorable result in the underlying action was a default judgment which Plaintiff’s ultimately obtained. (UMF 27; MSJ Exh. B). Plaintiffs were represented by new counsel four days after Defendant withdrew from the case. (UMF 14.) Plaintiffs cannot establish that the inability of Plaintiff’s to collect on the default judgment due to the insurance companies financial insolvency was caused by Defendant. In fact, Plaintiff sets forth evidence that the insurance company denied coverage in the underlying case so any ability to collect is purely speculative. (Decl. Plattner 14.) It is undisputed that Plaintiffs did not even discover the liquidation of the insurance carrier until one year after they obtained their default judgement. (UMF 29.)

As such Plaintiffs cannot establish causation for damages with respect to any of their causes of action.

I. Conclusion

For the foregoing reasons, Defendant’s Motion for Summary Judgment is GRANTED.