2012-00126187-CU-BC

Karen Goodman vs. Dean Stevenson

Nature of Proceeding:    Motion for Summary Judgment and/or Adjudication (Cross Defendant)

Filed By:   Kuo, Allen

Cross-defendant Karen Goodman dba Goodman & Associates’ (“Goodman”) Motion
for Summary Judgment/Summary Adjudication of the Second Amended Cross-
complaint is denied.

Cross-Defendant’s Evidentiary Objections: Sustained as to Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9,
10, 11, 12, 13, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34,
35, 36, 38, and 39.

Overruled as to Nos. 14, 15, , 37, 40, 41, and 42-119.  As to Objections 42-119, the
court does not rule on objections to “material facts,” only to objections to evidence.

Cross-defendant’s Request for Judicial Notice is granted.

In response to the Complaint seeking attorneys fees for representing the defendants,
Cross-defendants Dean Stevenson and Nicholas Stevenson allege claims for legal
malpractice, breach of fiduciary duty, and breach of contract arising out of Goodman’s
representation of them in a partnership dispute.  Cross-defendants contend that
Goodman inaccurately estimated the cost of representation, and that instead of the
$75,000 estimate, Goodman’s charge for services was over $200,000, and that
Goodman failed to get certain important documents admitted into evidence based on
Evidence Code section 1152.

Goodman contends that all causes of action are barred by the statute of limitations,
CCP 340.6.  Goodman further contends that the undisputed facts show that she did
not fall below the standard of care in her legal representation, that she did not breach
her fiduciary duty,  Goodman also contends that the Stevensons are estopped from
asserting Goodman’s failure to provide an amendment to the Fee Agreement
Constitutes a Breach of Contract because the claim is barred by the affirmative
defenses of waiver and consent.

Statute of limitations

Goodman contends that cross-complainants discovered facts constituting the wrongful
act or omissions by Ms. Goodman on August 10, 2010 when the trial court issued its
Tentative Decision, or alternatively on November 19, 2010 when the trial court issued
the “Notice of Entry of Judgment.” or at the very latest, by May 10, 2011 when the
Stevensons prepared their appellate briefs.  Goodman contends that the Stevensons
sustained an “actual injury: under CCP sectin 340.6 on November 19, 2010 when the
trial court issued the judgment that resulted in the ensuing appeal.   Ms. Goodman
ceased representing the Stevensons October 13, 2010.

The Court has reviewed the separate statement of material facts and finds that there
are disputed issues of fact as to UMFS 4 and 7.

Defendant’s separate statement contains 57 Undisputed Material Facts (UMF) to
support both the motion for summary judgment and motion for summary adjudication
of issues.  Thus, if there is any issue of fact as to any of these UMFs, the motion must
th
be denied.  As noted in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4   243, 252, a
party moving for summary judgment concedes the materiality of each fact enumerated
in its separate statement and, as a consequence, cannot argue that the motion should
be granted because one or more of these facts are not truly material.  As the Nazir
court noted, the facts enumerated in a moving separate statement have a due-process
dimension in that they define for the opposing party the facts which, if disputed with
th
admissible evidence, result in the motion being denied.  (178 Cal.App.4   at 2521
[citation omitted].)  In reliance on the universe of facts in the moving separate
statement, a party opposing a summary judgment motion is entitled to stop working on
the opposition once (s)he has produced admissible evidence demonstrating that a
single fact presents a triable issue.  Thus, the Fourth Appellate District Court of Appeal
observed:

“Where a remedy as drastic as summary judgment is involved, due
process requires a party be fully advised of the issues to be addressed
and be given adequate notice of what facts it must rebut in order to
prevail.”

(Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 849 [citation omitted].) Further, the
moving party’s evidence is strictly construed and the opposing party’s evidence is
liberally construed, resolving any doubts as to the propriety of granting the motion in
th
favor of the opposing party. Kulesa v Castleberry (1996) 47 Cal.App.4   103, 112.

A legal malpractice action “shall 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, whichever occurs first.” (CCP § 340.6
(a).) The statute will begin to run when the client discovers or should have discovered
the facts essential to the malpractice claim. (Beal Bank, SSB v.
Arter & Hadden, LLP (2007) 42 Cal.4th 503, 511.) C.C.P., sec.  340.6, subdivision (a)  applies to all claims against attorneys except for actual fraud, and it is not limited to
actions by former clients. (Quinlilliani v. Mannerino (1998) 62 Cal. App.4th 54, 67-68,
69-70 [breach of contract, breach of fiduciary duty claim and constructive fraud claims];
th
Stoll v. Sup. Ct. (1992) 9 Cal.App.4   1362, 1369 [breach of fiduciary duty]; Southland
Mechanical Constructors Corp. v. Nixen (1981) 119 Cal.App.3d 417, 426-429 [breach
of contract and legal malpractice];  Yee v. Cheung, (2013) 220 Cal.App.4th 184
[malicious prosecution].) Further, section 340.6, subdivision (a) applies to all claims
arising out of the provision of professional services.

Standard of Care

Cross-defendant’s alternative argument is that her conduct did not fall below the
standard of care.  Goodman introduces the declaration of Rudy Nolen who states that
“It is my unequivocal opinion that Ms. Goodman met the applicable standard of care
with respect to each of the Stevenson’s allegations of legal malpractice.  Generally
speaking attorneys are afforded wide latitude and judgment in their trial strategy and
presentation. Nothing that I have reviewed suggests that Ms. Goodman’s legal
representation of the Stevensons in their prosecution of the Underlying Action fell
below the professional standard of care for an attorney under similar circumstances.
” (Declaration of Nolen, ¶ 7)  Nolen goes on to specifically address each of the
plaintiff’s claims of negligence, one of which was the failure to properly plead a cause
of action for dissociation. On the topic of the dissociation claim, Nolen states “Before
trial the cause of action for dissociation was discussed in correspondence dated
January 5, 2010.  Adding this cause of action would have delayed the trial.  Mr.
Stevenson did not want to delay the trial and agreed to move forward on the theory of
breach of partnership agreement.  Accordingly, there was an agreement between
counsel and client on what legal theory would be presented to the Court.” (Nolen
Declaration ¶7(f))

The Court finds that cross-defendant has failed to meet her burden to show that the
failure to plead a disassociation claim was not below the standard of care.  The fact
that the Stevensons decided they did not want to delay the trial does not waive their
right to assert that failure to plead the cause of action earlier in the case was below the
standard of care. The Nolen declaration does not adequately address the standard of
care with regard to failure to allege a dissociation claim.

Because the burden of proof was not met in the moving papers, the burden never
shifted to plaintiffs.  The Court, however rejects plaintiff’s argument that no expert
opinion is required on this issue.

Moreover, the motion for summary judgment and motion for summary adjudication of
issues in the cross-complaint all rely on UMFs 4 and 7 of the Separate Statement.
These UMFs are the same UMFs 5 and 8 offered in support of Plaintiff’s motion for
summary judgment.  Therefore, even if the cross-defendant met her burden of proof on
the standard of care issue, there are triable issues of  fact as to UMFs 5 and 8. This
alone mandates denial of the motion.

Goodman contends that “In entering the Fee Agreement, Dean and Nicholas were
hiring Ms. Goodman to file a lawsuit against the Doughertys.  (UMF 4) Goodman
contends that paragraph 5 of the Fee Agreement obligated defendants to pay
Goodman an hourly rate for legal services consisting of $275 per hour for partners,
$225 per hour for senior associates, and $190 per hour for associates. (UMF 7)  These
material fact supports both the motion for summary judgment and the motion for
summary adjudication of issues in the Cross-complaint.   In opposition, plaintiffs raise
an issue of fact as to whether at the time they were entering the Fee Agreement they
were hiring Goodman to file a lawsuit for certain fees.  The parties agreed that “before
a lawsuit was filed, attorney and clients  will mutually agree upon the terms for
representation in litigation in an amendment to this Agreement.”  The parties never
mutually agreed on the terms for representation in litigation in an amendment to the
Agreement.  (Declaration of Dean Stevenson).  Therefore, there is an issue of material
fact as to UMFs 4 and 7.  The court has also found that the burden of proof was not
met as to UMF 26 regarding whether Goodman fell below the standard of care.

The prevailing party is directed to prepare a formal order complying with C.C.P. §437c
(g) and C.R.C. Rule 3.1312.

Item  2     2012-00126187-CU-BC

Karen Goodman vs. Dean Stevenson

Nature of Proceeding:  Motion for Summary Judgment and/or Adjudication (Plaintiff)

Filed By:  Haro, Summer D.

Plaintiff Karen Goodman dba Goodman & Associates’ (“Goodman”) Motion for
Summary Judgment/Summary Adjudication on the Complaint is denied.

Plaintiff’s Evidentiary Objections:
Sustained as to: Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 16, 16, 17, 18, 19, 20, 21,
22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 33, 34, 35, 36, 38, 39,
Overruled as to: Nos. 14, 15, 37, 40, and 41.

Goodman represented defendants in a partnership dispute.  Goodman alleges that
defendants defaulted on their obligations to pay the agreed upon hourly rate.  The last
invoice sent to Defendants on January 28, 2011 showed a past due balance of
$113,615.57.  (UMF 56)

The Attorney Fee agreement states: “Clients hire Attorney to provide the following
legal services: Prosecution of breach of fiduciary duty action against Glenn & Judee
Dougherty. Attorney will provide those legal services reasonably required to represent
clients. Attorney will take reasonable steps to keep Clients informed of progress and to
respond to Clients’ inquiries. Before a lawsuit is filed. Attorney and Clients will mutually
agree upon the terms for representation in litigation in an amendment to this
Agreement. This Agreement does not cover representation on appeal or in execution
proceedings after judgment. Separate arrangements must be agreed to for those
services. Services in any matter not described above will require a separate
Agreement.” (emphasis added)

The only written agreement is the above agreement, signed March 31, 2007.  The
parties did not mutually agree upon the terms for representation in litigation in an
amendment to the Agreement.  Rather, Goodman continued to billed defendants for
litigation work in accordance with the written agreement.
Goodman contends that “In entering the Fee Agreement, Dean and Nicholas were
hiring Ms. Goodman to file a lawsuit against the Doughertys.  (UMF 5) Goodman
contends that paragraph 5 of the Fee Agreement obligated defendants to pay
Goodman an hourly rate for legal services consisting of $275 per hour for partners,
$225 per hour for senior associates, and $190 per hour for associates. (UMF 8)  These
material fact supports both the motion for summary judgment and the motion for
summary adjudication of issues that there is no meritorious defense to any of the
causes of action for breach of contract, common counts, and quantum meruit.   In
opposition, plaintiffs raise an issue of fact as to whether at the time they were entering
the Fee Agreement they were hiring Goodman to file a lawsuit for certain fees.  The
parties agreed that “before a lawsuit was filed, attorney and clients  will mutually agree
upon the terms for representation in litigation in an amendment to this Agreement.”
The parties never mutually agreed on the terms for representation in litigation in an
amendment to the Agreement.  (Declaration of Dean Stevenson).  Therefore, there is
an issue of material fact as to UMFs 5 and 8. As is noted in the related ruling on this
day’s calendar, if there is any issue of fact as to any of these UMFs, the motion must
be denied.  A party moving for summary judgment concedes the materiality of each
fact enumerated in its separate statement. Nazir v. United Airlines, Inc. (2009) 178
th
Cal.App.4   243. The facts enumerated in a moving separate statement have a due-
process dimension in that they define for the opposing party the facts which, if
disputed with admissible evidence, result in the motion being denied. Id . at p. 252.

The prevailing party is directed to prepare a formal order complying with C.C.P. §437c
(g) and C.R.C. Rule 3.1312.