2015-00187909-CU-PO

Tonya Bagwill vs. Richard Lehrfeld

Nature of Proceeding: Hearing on Demurrer to Cross-Complaint

Filed By: Robertson, Daniel W.

Effective September 23, 2019, official court reporters will not be available in Departments 53 and 54, with exceptions listed in the Court’s Policy Regarding Availability and Unavailability of Official Court Reporters. Additional information regarding this policy can be found on the Court’s website at www.saccourt.ca.gov.

Cross-Defendant 21st Century Insurance Company’s (“Cross-Defendant” or “21st”) demurrer to cross-complainant Richard E. Lehrfeld’s (“Cross-Complainant” or “Lehrfeld”) Cross-Complaint is ruled upon as follows.

Cross-Defendant’s request for judicial notice of documents in the Court’s records is granted.

Cross-Complainant filed the Cross-Complaint on February 8, 2017, alleging causes of action for intentional misrepresentation, negligent misrepresentation, and concealment against Cross-Defendant. Additional causes of action are alleged against Cross-Defendant Michael M. Meade, which are not at issue in this demurrer.

Cross-Defendant demurs to all three of the causes of action alleged against it on the grounds they fail to state facts sufficient to state a cause of action.

Legal Standard

The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.) The pleading rules applicable to demurrers are now familiar and well established. Pleadings are to be liberally construed. (Code Civ. Proc. § 452) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action – not whether they are true. (Serrano v. Priest (1971) 5 Cal. 3d 584, 591.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . . , we are not concerned with plaintiff’s possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal. App. 3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal. App. 4th 726.)

Discussion

Lehrfeld is an attorney who is representing himself in this action.

This instant action arises from a legal malpractice lawsuit filed by Tonya Bagwill against Lehrfeld, who represented her in a personal injury action against Jose Ramon Cepeda II and Larry Skaggs arising from a motor vehicle accident. (Cross-Complaint ¶ 6.) Lehrfeld began representing Ms. Bagwill on March 12, 2010. (Cross-Complaint ¶

6.) Lehrfeld filed suit on Ms. Bagwill’s behalf on May 6, 2011. (Ibid.) Defendants were allegedly insured by 21st. (Ibid.)

In the Cross-Complaint Lehrfeld filed against 21st and Michael Meade, he alleges 21st Century is liable for intentional misrepresentation, negligent misrepresentation, and concealment on the grounds that, during pre-litigation settlement discussions (i.e., prior to the time the Complaint was filed on May 6, 2011), 21st represented that the date of Ms. Bagwill’s accident was May 18, 2009 (Cross-Compl. ¶ 7), that Lehrfeld relied on this representation in filing suit on May 6, 2011 (Cross-Compl. ¶ 8), that the last date to file suit was May 2, 2011 (Cross-Compl. ¶ 9), that 21st knew the date of the accident was April 30, 2009 (Cross-Compl. ¶ 10), and that Lehrfeld did not learn that the correct date of the accident was April 30, 2011, until he was informed by a letter, dated November 30, 2015, from Meade (Cross-Compl. ¶ 11).

Three years after Ms. Bagwill’s suit was filed, on or about May 14, 2014, the defendants finally filed an answer to the complaint. (RJN, Exh. O.) On or about May 19, 2014, cross-defendant Michael Meade substituted in as new counsel to represent Ms. Bagwill. (Cross-Complaint ¶ 7.) “At some point [Meade] determined the case was filed 7 days after April 30, 2011, and thus he decided, unilaterally and voluntarily to dismiss the case.” (Cross-Complaint ¶ 26.) Dismissal was entered on December 17, 2015. (RJN, Exh. Q.)

Following the dismissal, Meade, on behalf of Ms. Bagwill, filed a legal malpractice lawsuit against Lehrfeld. (RJN, Exh. R.) Ms. Bagwill filed the Amended Complaint, which is now the operative complaint against Lehrfeld, on February 24, 2016. (RJN, Exh. S.)

Lehrfeld filed the Cross-Complaint that is the subject of this demurrer one and a half years later on February 8, 2017. (RJN, Exh. U.) Lehrfeld did not serve the Cross-Complaint on 21st until May 6, 2019.

21st argues the allegations demonstrate Lehrfeld knew or should have known the correct date of the accident no later than May 6, 2011, the date upon which he filed the complaint on Ms. Bagwill’s behalf, and therefore his claims are time barred.

As to the claims for intentional misrepresentation and concealment, 21st argues the statute of limitations is three years pursuant to CCP § 338(d). “[A] cause of action for fraud or mistake accrues, and the limitations period commences to run, when the aggrieved party could have discovered the fraud or mistake through the exercise of reasonable diligence.” (Sun ‘n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 701.) The California Supreme Court has explained that “since the provision tolling operation of the statute until discovery is an exception, the plaintiff ‘must affirmatively excuse his failure to discover the fraud within three years after it took place, by establishing facts showing that he was not negligent in failing to make the discovery sooner and that he had no actual or presumptive knowledge of facts sufficient to put him on inquiry.'” (Id., p. 701-702, quoting Hobart v. Hobart Estate Co. (1945) 26 Ca].2d 412, 437.)

The statute of limitations for a claim of negligent misrepresentation is two years. (CCP§ 339.) A claim for negligent misrepresentation accrues when a plaintiff knows or reasonably should know the defendant made a misrepresentation. (E-Fab, Inc. v. Accountants, Inc. Service (2007) 153 Cal.App. 1308, 1323.)

21st argues Lehrfeld should have discovered the correct date of his client’s accident about the time he agreed to represent her because Ms. Bagwill was aware of the date of her own accident. 21st contends Lehrfeld’s regular due diligence as an attorney should have included a review of his client’s documents, such as her medical records, social media posts, police reports, etc., which would have disclosed the correct date of the accident. Further, ordinary due diligence should have included sending a draft complaint to Ms. Bagwill for review. 21st contends had Lehrfeld sent a draft complaint to Ms. Bagwill, she could have informed him of the correct date of the accident. In the alternative, 21st contends Lehrfeld also could have discovered the correct date at least within the two years after filing Ms. Bagwill’s action if he had timely served defendants and conducted discovery. Instead, 21st contends Lehrfeld delayed for three years in serving the complaint and did not diligently prosecute the action.

The demurrer based on 21st’s statute of limitations argument is OVERRULED. A demurrer based upon the statute of limitations lies where the dates in question are shown on the face of the complaint, or from matters upon which the Court may take judicial notice. None of 21st’s arguments as to when Lehrfeld should have discovered the correct date of the accident are shown on the face of the complaint. Rather, these constitute only speculation and argument by 21st at this point. A demurrer is not, generally, the procedural vehicle to address factual disputes. There are no allegations in the Cross-Complaint establishing the exact date upon which Lehrfeld should have discovered the correct date. In the Cross-Complaint, Lehrfeld alleges he did not learn that the correct date of the accident was April 30, 2011, until he was informed by a letter, dated November 30, 2015, from Meade (Cross-Compl. ¶ 11). For purposes of this demurrer, this allegation must be accepted as true. Lehrfeld then filed the Cross-Complaint less than two years later on February 8, 2017. A demurrer based on an affirmative defense cannot properly be sustained where the action might be barred by the defense, but is not necessarily barred. (See, e.g., Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal. App. 4th 1397, 1403.) At this point, the Court cannot determine from the face of the complaint (or from matters upon which the Court has taken judicial notice) whether Lehrfeld should have discovered the correct date of the accident prior to November 30, 2015, and therefore whether his claims are time barred or not.

21st also argues all of the causes of action are barred by the doctrine of laches because Lehrfeld slept on his rights for an unreasonably long period, thereby prejudicing 21st in defending against the claims. The demurrer on this ground is also OVERRULED as the reasonableness of Lehrfeld’s delay is a matter of factual dispute not suitable for determination on demurrer. Laches is a plea that is available to a party in a court of equity. It was defined in Cahill v. Superior Court (1904) 145 Cal. 42, as follows: “Laches’ is defined as such neglect or omission to assert a right as, taken in conjunction with the lapse of time, more or less great, and other circumstances causing prejudice to an adverse party, operates as a bar in a court of equity.’ Laches is an affirmative defense, and a demurrer “based on an affirmative defense cannot properly be sustained where the action might be barred by the defense, but is not necessarily barred.” (CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 635 [emphasis inoriginal].) The elements of laches are an unreasonable delay in asserting an equitable right causing prejudice to the adverse party. (Wells Fargo Bank v. Bank of America (1995) 32 Cal.App.4th 424, 439.) Laches is a question of fact based on all circumstances in the case. (Wolpert v. Gripton (1931) 213 Cal. 474, 483.) It is also to be observed that laches does not apply in an action of law. (Barkley v. City of Blue Lake (1996) 47 Cal.App.4th 309, 315.)

Finally, 21st argues all of the causes of action lack the requisite specificity. 21st argues causes of action for fraud and negligent misrepresentation must be pled with specificity. While 21st sets forth the specificity pleading standards and elements for the fraud and negligent misrepresentation causes of action alleged by Lehrfeld, it fails to explain with any specificity how the claims do not meet the heightened pleading standard. Rather, 21st makes the conclusion without setting forth the basis therefore. Nonetheless, the Court has reviewed the Cross-Complaint and finds the causes of action are sufficiently pled. Accordingly, the demurrer on this ground is also

OVERRULED.

The demurrer is, therefore, OVERRULED in its entirety.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.