Case Number: BC512369    Hearing Date: August 08, 2014    Dept: 46

Case Number: BC512369
WARREN W KAUFMAN INC VS LAKESIDE DEVELOPMENT ET AL
Filing Date: 06/18/2013
Case Type: Other Compl-not Tort or Complex (General Jurisdiction)

This tentative ruling is posted at 2:00 p.m. on 8-7-2014 and the matter is set for hearing on 8-8-2014 at 8:30 a.m.

If there are no parties other than Plaintiff/Petitioner, then Plaintiff/Petitioner may submit to the tentative without appearance by telephonic notification to the clerk of Dept. 46 between 8:00 a.m. and 4:30 p.m. on a date prior to the hearing or morning prior to the hearing by calling (213) 974-5665, and the court will issue the tentative ruling as the final ruling. If the other parties have appeared in the action, then the parties must first confer and all agree that the tentative ruling will be the final ruling on the matter. If the parties to the matter before the court all agree, a representative of the parties may call the clerk and submit without an appearance, and the court will issue the tentative ruling as the final ruling. If an order is required, it should be lodged directly in Dept. 46 with a copy to adverse/other parties, if any.

08/08/2014
Motion for Summary Judgment

TENTATIVE RULING. Motion for summary judgment on the cross-complaint is summarily granted (as there is no opposition or separate statement) pursuant to CCP437c(b)(3), which states that “failure to comply with this requirement of a separate statement [in opposition] may constitute a sufficient ground, in the court’s discretion, for granting the motion.” Alternatively, the court grants the motion for summary judgment after consideration of the merits of the motion. The undisputed facts indicate clearly that the action is barred by the applicable statute of limitations in CCP §340.6. Warren Kaufman is entitled to judgment in his favor and against Gareth Carmody aka Gary Conway. Counse for Warren Kaufman to prepare Judgment on the Cross-Complaint and submit to the court for entry.

As designated herein Warren W. Kaufman is referred to variously as Kaufman, Plaintiff (P) Cross-Defendant (X-D) or Plaintiff/Cross-Defendant (P/X-D.)

P/X-D and X-D Kaufman’s Requests for Judicial Notice (“RJN”) are ruled on as follows:

1. DENY as to Exhibit “1” (i.e., non-conformed copy of x-complaint);
2. DENY as to Exhibit “2” (i.e., non-conformed copy of the FAC in case styled Carmody v. First Fidelity Thrift & Loan Association, Case No. 700 775 (hereinafter, “the First Fidelity Action”);
3. GRANT as to Exhibit “3” (i.e., “Motion for Leave to File SAC” filed 9/7/93 in the First Fidelity Action);
4. GRANT as to Exhibit “4” (i.e., complaint filed 12/17/97 in case styled Conway v. Hibdon, et al., Case No. CV 081 712 [hereinafter, the “Hibdon Action”];
5. GRANT as to Exhibit “5” (i.e., “Order for Change of Venue and for Sanctions” filed 6/30/98 in the Hibdon Action); and,
6. GRANT as to Exhibit “6” (i.e., docket for the First Fidelity Action.)

Carmody has alleged, in relevant part, in the Cross-Complaint that:

“4. In or about 1993, Cross-Complainant engaged Warren W. Kaufman and/or Warren W. Kaufman, Inc. to represent him in relation to a lawsuit against First Fidelity Thrift & Loan Association (the ‘First Fidelity Lawsuit’). Cross-Complainant was a Plaintiff in the First Fidelity Lawsuit. Martia and Hidbon, Co-Defendants of Cross-Complainant herein, were not Plaintiffs, nor were they represented by Warren W. Kaufman and/or Warren W. Kaufman, Inc., in the First Fidelity Lawsuit…

8. Cross-Defendant Warren Kaufman, Inc., and/or Warren Kaufman, Esq., individually, entered into an attorney-client relationship with Cross-Complainant. Cross-Defendant promised, in writing, to ‘take his directions in the First Fidelity lawsuit only from’ Cross-Complainant. Cross-Defendant’s duty to follow Cross-Complainant’s directions were continuous and ongoing and continue up and to the present time.

9. In 2013, Cross-Complainant instructed Cross-Defendant to release to him, all funds in the joint bank account styled in the names of Cross-Defendant and Cross-Complainant and which were the proceeds of the First Fidelity lawsuit. Cross-Defendant claimed a conflict of interest prevents him from carrying out his professional duties to Cross-Complainant. Cross-Defendant was negligent in entering into any conflict which could not be resolved without further litigation. The negligence is continuous and on-going to today.

10. In 2013 Cross-Defendant failed and refused to honor his written commitment and legal duty to follow the directions of his client…” (X-Complaint, ¶¶ 4 and 8-10).

A summary of the admissible evidence indicates that:

1. On/about 11/1/89, First Fidelity loaned Lakeside and its joint venturers the sum of $1,050,000 (Motion. Exhibit “7,” ¶ B).
2. Lakeside’s joint venturers at that time consisted of Carmody, Rivera and Lakeside Development—Chimney Rock, a CA limited partnership. (Id., ¶ A).
3. The general partners of Chimney Rock were Martia and Hibdon. (Id.).
4. First Fidelity contended that the loan was secured by 6 different properties, known as the Lakeside Property, the Hibdon Property, the Zanetos Property, the Martia Property, the Chimney Rock Property and the Nacimiento Property, whereas Carmody and Lakeside contended that the only real property securing the loan was the Lakeside Property. (Id., ¶ B).
5. One of the purposes of the loan was to pay the Templeton Community Services District (hereinafter, “Templeton”) $465,000 to obtain a “will-serve” letter for the delivery of water and sewer facilities to the Lakeside Property. (Id., ¶ D).
6. The loan funded on/about 11/6/89, and Templeton was paid $564,000 on that date, but Lakeside did not receive the “will-serve” letter until 7/10/91. (Id., ¶ E).
7. The loan subsequently went into default and on 9/27/91, First Fidelity recorded a Notice of Default and Election to Sell relative to the Lakeside Property. (Id., ¶ F).
8. On/about 1/4/93, First Fidelity foreclosed upon its interest under the deed of trust pertaining to the Lakeside Property. (Id.).
9. On/about 12/1/92, Carmody, Martia and Rivera commenced the First Fidelity Action. (Id., ¶ G). Martia and Rivera were subsequently dismissed. (Id.). Kaufman began representing Carmody in the First Fidelity Action in 1993. (UMF No. 1).
10. In 9/93, Kaufman filed a “Motion for Leave to File SAC” in the First Fidelity Action; Carmody’s accompanying declaration states, in relevant part, as follows:

“1. I am a plaintiff in this action. I am further a joint venture in LAKESIDE DEVELOPMENT COMPANY (‘LAKESIDE’), a California joint venturer. Originally, all four joint venturers sued defendant FIRST FIDELITY THRIFT & LOAN ASSOCIATION (‘FIRST’). Three of the joint venturers, I, EDMOND RIVERA, and ALAN MARTIA filed the instant action in pro per. The fourth joint venturer, ALAN HIBDON (‘HIBDON’) filed his own action in the Los Angeles Superior Court. I later learned that MARTIA and HIBDON worked out their own settlement with FIRST, leaving me and RIVERA as the remaining plaintiffs. However, at no time were MARTIA or HIBDON given any authority to compromise any of the
rights of LAKESIDE.
2. At the time the First Amended Complaint was filed, I believed I had worked out an arrangement in principle with the settling joint venturers whereby LAKESIDE would assign its claim to me so that I could present it in this instant action, thereby protecting the rights of LAKESIDE and all of the joint venturers. However, in subsequent meetings with Messrs. HIBDON and MARTIA, I was unable to come to terms acceptable to all parties. Therefore, contrary to the allegations contained in the First Amended Complaint, no assignment has been made of LAKESIDE’s interest to me.
3. This proposed Second Amended Complaint is being filed in order to protect LAKESIDE’s interest. It is necessary to join LAKESIDE and Messrs. HIBDON and MARTIA as defendants since they are necessary parties. They might have made their own agreement with FIRST, but in protecting their own interest, they never had the authority to bargain away the rights of LAKESIDE.” (Motion, Exhibit “2,” Carmody Dec., ¶¶ 1-3).

11. In the Underlying Action, Carmody and Lakeside contends that they were damaged by virtue of First Fidelity’s failure to obtain the “will-serve” letter from Templeton on/about 11/6/89 and First Fidelity’s recordation of deeds of trust encumbering the Chimney Rock Property, the Nacimiento Property and the Martia Property. (Id., Exhibit “7,” ¶ H).

12. In mid-1995, Carmody asked Kaufman to represent Lakeside in a new action against Templeton based on its failure to timely issue the “will serve” letter. (Declaration of Kaufman, ¶ 8). Kaufman attests that:

“10. Shortly before July 13, 1995, I met with all three of the remaining Lakeside Joint Venturers (Carmody, Hibdon, who is an attorney, and Martia) at my office located at 12650 Riverside Drive, North Hollywood, California, and had a long discussion with them about me representing Lakeside in the Templeton lawsuit. I explained the conflict in great detail. They all stated they understood the conflict, would waive it, and requested me to represent Lakeside. At this time, the lawsuit against First Fidelity was still ongoing. I prepared a conflict letter on July 13, 1995…” (Id. at ¶ 10).

This letter (Motion, Exhibit “3”) states, in relevant part, as follows:

“There is a substantial conflict of interest issue which must be addressed. I now represent Mr. Carmody in a Superior Court action in Orange County California, Case No. 700775, entitled Carmody v. First Fidelity et al. Carmody has named as defendants in this action Messrs. Martia and Hibdon and Lakeside. The reason Messrs. Martia and Hibdon and Lakeside were named as defendants is because they did Not agree that Carmody could file a lawsuit on behalf of Lakeside…

Only because Carmody is not requesting any damages from Martia, Hibdon or Lakeside, in his suit against First Fidelity, or seeking any other relief adverse to their interest, could I even consider representing Lakeside in the Templeton District while at the same time representing a party who is suing Lakeside in the Orange County lawsuit.

“If you all agree to waive the conflict, I would consider myself to have the same fiduciary obligation to Messrs. Hibdon and Martia that I now have with Mr. Carmody. If there is ever any dispute between the three of you over the recovery of any sums from either the Templeton or First Fidelity lawsuit, or assessment of any costs relating thereto, or any other matter, I could not be involved. If there is a further disagreement between any of you as to how the Templeton suit is to be resolved, I could not be involved. I could not do anything contrary to the interest of any of you or Lakeside. You would each need to retain separate counsel, if an attorney were required, and would likely incurextra costs.

I will continue to represent Mr. Carmody in the First Fidelity lawsuit and will take my directions in the First Fidelity lawsuit only from him. As stated above, if there is any dispute as to how the proceeds from any judgment or settlement are to be distributed in the First Fidelity lawsuit I can not be involved…

Because of the uniqueness of this situation, I request each of you to obtain independent advice from another attorney and to rely on that advice in making your decision as to whether you will waive the conflict… (Bold added).

13. Carmody signed this letter. (Id.) Kaufman represents that the Templeton Action terminated in 3/97. (Kaufman Dec., ¶ 11). The First Fidelity Action was subsequently settled. On 4/17/96, a “Request for Dismissal” with prejudice was filed in the First Fidelity Action (RJN, Exhibit “6”).
14. Between 4/8/96 and 3/28/00, Kaufman wrote letters to Carmody, Hibdon and Martia concerning the account. (Motion, Exhibits “12”-“18”).
15. At no time after 4/8/96 did Kaufman invoice Carmody for any legal services of communications he generated or received after that date with respect to the First Fidelity Action, the bank account or the communications set forth above. (Kaufman Declaration, ¶ 27).
16. On 12/17/97, Carmody sued Hibdon and Martia, among others, in the Hibdon Action, in which he contended, inter alia, that “[a]s a further result of defendants Hibdon and Martia’s mismanagement of the joint venture’s affairs, Plaintiff was involved in litigation with First Fidelity Bank (‘Fidelity’). The litigation ended with First Fidelity paying Plaintiff $75,000 (‘Settlement Proceeds’). Defendants Hibdon and Martia wrongfully attempted to coerce Plaintiff into paying such defendantrs a portion of the Settlement Proceeds.” (RJN, Exhibit “4,” ¶ 15).
17. Carmody has testified that he “absolutely” believes Kaufman committed legal malpractice on 4/8/96. (Exhibit “8,” 90:7-91:9; see also, 50:17-51:4). He testified that he “wouldn’t have gone to the bank” if he hadn’t had such a belief. (Id.). He also, during his deposition, authenticated a 7/25/98 letter he sent to attorney Leon Smalls (Motion, Exhibit “11”), in which he griped, in relevant part, as follows: “I also feel that Kaufman should not have made this arrangement. I certainly did not have any comprehension that it would effect my receiving my money. I feel that Kaufman has some liability here. He got paid, but I didn’t” (emphasis added).

The conclusion that is inescapable from this evidence that that Carmody believed he had a malpractice lawsuit against Kaufman as of 1996 and the cause of action accrued at that time. The action was filed on 06/18/2013, more than seven years before the action was filed. None of the tolling exceptions under CCP 340.6 apply. Therefore the action is barred by CCP § 340.6, which states in pertinent part, as follows:

“(a) An action against an attorney for a wrongful act or omission,
other than for actual fraud, arising in the performance of professional
services 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, or
four years from the date of the wrongful act or omission, whichever
occurs first…in no event shall the time for commencement of legal
action exceed four years except that the period shall be tolled during
the time that any of the following exist:
(1) The plaintiff has not sustained actual injury.
(2) The attorney continues to represent the plaintiff regarding the specific
subject matter in which the alleged wrongful act or omission occurred.
(3) The attorney willfully conceals the facts constituting the wrongful act
or omission when such facts are known to the attorney, except that this subdivision shall toll only the four-year limitation.
(4) The plaintiff is under a legal or physical disability which restricts the
plaintiff’s ability to commence legal action…”

Based upon the forgoing, summary judgment on the cross-complaint is summarily granted (as there is no opposition or separate statement) pursuant to CCP §437c(b)(3). Alternatively, the court grants the motion for summary judgment after consideration of the merits of the motion pursuant to CCP §437c as unchallenged facts stated above indicate there are no triable issues of fact found to indicate that the cross-complaint has any merit. The undisputed facts indicate clearly that the action is barred by the applicable statute of limitations in CCP §340.6. Warren Kaufman is entitled to judgment in his favor and against Gareth Carmody aka Gary Conway on all causes of action on the cross-complaint. Counsel for Warren Kaufman to prepare Judgment on the Cross-Complaint and submit to the court for entry.

IT IS SO ORDERED:

Frederick C. Shaller, Judge