Case Number: SC121811 Hearing Date: May 08, 2014 Dept: P

TENTATIVE RULING – DEPT. P

MAY 8, 2014 CALENDAR No: 4

SC121811 — LOADED GUN v. LINZER, et al.

DEMURRER TO COMPLAINT

Plaintiff, a limited liability corporation, has sued its former attorney, his law corporation and his trust for breach of fiduciary duty, declaratory relief, and rescission. The complaint at bar allege, in essence, that the attorney overbilled Plaintiff for legal fees, and then, without complying with Cal. Rules of Professional Conduct, Rule 3-300 and other ethical standards, acquired (through the trust) an interest in Plaintiff (and then continued to overbill for legal fees). Defendants, representing themselves in propria persona, demur to all three claims, asserting that all three claims are time-barred, and that the claims fail due to misjoinder of certain named defendants. The Court will sustain the demurrers with leave to amend.

The running of a statute of limitations must appear “clearly and affirmatively” from the dates alleged in the complaint. Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403. That is not the case here as to any of the three claims. As a matter of example only, it is entirely unclear from the allegations of the complaint whether the statute of limitations has run as to the breach of fiduciary duty claim.

Section 340.6, the statute of limitations applicable to that claim, as construed by case law, provides that an action against an attorney for same must be “commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission ….” § 340.6(a). However, the one-year “period shall be tolled during the time that … [t]he attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.” § 340.6(a)(2). The purpose of the continuous representation rule is to ” ‘avoid the disruption of an attorney-client relationship by a lawsuit while enabling the attorney to correct or minimize an apparent error, and to prevent an attorney from defeating a malpractice cause of action by continuing to represent the client until the statutory period has expired.’ ” Laird v. Blacker (1992) 2 Cal.4th 606, 618.
“An attorney continues to represent a client ‘on the same specific subject matter until the agreed tasks have been completed or events inherent in the representation have occurred.’ ” Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1200. ” ‘[S]o long as there are unsettled matters tangential to a case, and the attorney assists the client with these matters, he is acting as his representative,’ and the statute of limitations is tolled.” O’Neill v. Tichy (1993) 19 Cal.App.4th 114, 121 (emphasis added). Accordingly, “[t]he general rule is that the attorney’s representation does not end ‘until the agreed tasks or events have occurred, the client consents to termination, or a court grants an application by counsel for withdrawal.’ ” Lockley v. Law Office of Contrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 887-888.

Numerous courts have held the test for whether the attorney has continued to represent a client on the same specific subject matter is an objective one. Crouse v. Brobeck, Phleger & Harrison (1998) 67 Cal.App.4th 1509, 1528; Lockley, 91 Cal.App.4th at 887; Worthington v. Rusconi (1994) 29 Cal.App.4th 1488, 1497 (the language of section 340.6, subdivision (a)(2) “requires an objective determination of whether the representation has ended”); but see Hensley v. Caietti (1993) 13 Cal.App.4th 1165, 1172 (“the question of representation should be viewed from the perspective of the client because that tailors the rule in Code of Civil Procedure section 340.6, subdivision (a)(2) to the purpose it serves”). Continuity of representation ultimately depends not on the client’s subjective beliefs, but rather on “evidence of an ongoing mutual relationship and of activities in furtherance of the relationship.” Lockley,at 887; Worthington at 1498.

Plaintiff filed this action on December 19, 2013. However, Plaintiff impliedly alleges that Defendants entered into the “Membership Transaction” on or after June 30, 2011 (the date of the transaction is not specifically stated in the complaint). See, Complaint, paras. 16 and 18. Plaintiff states that after it and Defendants entered into the “Membership Transaction,” Defendants continued to represent it with regard to the two litigation matters which led to the “Membership Transaction.” Complaint, para. 24. However, Plaintiff does not state when that representation ceased. Thus, the complaint’s obtuse allegations do not state facts specific enough for the Court to make a determination on this issue. The claim may be barred. Or it may not.

Likewise, and again as a matter of example only, the complaint fails to state any facts which indicate that the trust can be properly named as a defendant in connection in with the claim for breach of fiduciary duty (an unlikely proposition under the facts currently pled).

The question is whether the Court should permit amendment of any of the claims demurred to. Plaintiff made no attempt to show that it can properly amend its complaint, even though it is its burden to do so. Nevertheless, the complaint at bar being the first iteration of the complaint, and there being some indications of valid amendment, in the interests of justice, the Court will allow amendment.

All general and special demurrers are sustained with leave to amend.

MOTION TO STRIKE

Off-calendar without prejudice as moot based on the ruling on the demurrers.

First amended complaint, clearly captioned as such, is to be served and filed on or before May 29, 2014.

In amending the complaint, Plaintiff should bear in mind that if it appears to the Court that the allegations of the FAC are framed in a manner designed to avoid an informed determination of any applicable time bar asserted by Defendants, the Court may treat Defendants’ assertions as to this issue as being admitted as valid by Plaintiff.
CASE MANAGEMENT CONFERENCE

Re-set to August ___, 2014 at 8:30 a.m.

OTHER MATTERS

The Court has reviewed Linzer’s Notice of Related Cases filed on April 17, 2014, as well as the oppositions thereto. The Court finds that SC121811 and BC541027 (Miller v. Diaz) are not related under CRC 3.300. The Court will issue a separate minute order as to its ruling on the Notice of Related Cases, so that same can be filed in BC541027.

The Court questions the propriety of Defendants’ citation to El Segundo Plaza Associates at 6:28-7:1 of the reply in support of the demurrer; it appears that same is not only unpublished, but is a trial court order.