Case Number: BC531568 Hearing Date: May 13, 2014 Dept: 73

Dept. 73
Rafael Ongkeko, Judge presiding

JANEKE vs. NASH (BC531568)

Counsel for defendant/moving party: Jonathan Cole; Amanda Moghaddam (Nemecek, etc.)
Counsel for plaintiff/opposing party: Self-represented.

Defendant Nash’s demurrer (filed 3/14/14) to plaintiff’s first amended complaint (FAC) is sustained with 15 days’ leave to amend; the motion to strike (filed 3/14/14) is granted in its entirety.

Preliminary rulings:
Defendant’s request for judicial notice (filed 3/14/14) is granted.
Plaintiff’s request for judicial notice (RJN filed 4/23/14) is denied as it was not signed. However, if plaintiff is prepared to sign it at the hearing, the court grants the requests enumerated as to those matters noticed under Evidence Code 452 (a) through (e), but denied as to unpublished opinions and the uncertified bankruptcy transcript (request for judicial notice filed 4/23/14). Defendant’s objections (filed 5/6/14) to these RJNs are overruled to the extent they are addressed in the court’s rulings as to these requests for judicial notice.

Regarding the “answers” filed to Defendant’s moving papers, Plaintiff has violated CRC 3.1113 as his “answers” are 101 and 54 pages, respectively. Plaintiff’s answers are largely unintelligible and ask the Court to consider numerous documents which Plaintiff maintains support his complaint. The court does not consider these documents.
Standing/Judicial Estoppel
Defendant argues Plaintiff lacks standing to sue Defendant and is judicially estopped from suing. Here, Plaintiff’s claims concern the underlying bankruptcy action in which Defendant served as Plaintiff’s attorney. (¶¶11-14.) After retaining new counsel and initiating a second bankruptcy proceeding, Plaintiff sought to re-open the first action to recover fees paid to Defendant. (¶¶40-44, 63.)

Regarding standing, Defendant argues Plaintiff failed to list his claims against Defendant on his second bankruptcy petition or the four amendments filed thereafter. (Defendant’s RJN Exh. 1, Exh 3 Schedule B, Exh. 6, Exh. 9.) The widely accepted rule is that after a person files for bankruptcy protection, any causes of action previously possessed by that person become the property of the bankrupt estate. See Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995. If all elements are met for a civil claim prior to a bankruptcy discharge, then the claims would be barred in a subsequent lawsuit if they were not listed on the Schedule of Assets. Thus, the issue becomes whether the claim has ¿accrued¿ (i.e., the elements of the claim are met) prior to the bankruptcy filing and/or the discharge of debts. Thus, the claims against Nash would belong to the bankruptcy estate. Further, by failing to list the claims, Plaintiff is likely also judicially estopped from now asserting these claims. See International Engine Parts, Inc. v. Feddersen & Co. (1998) 64 Cal.App.4th 345, 350-353. In the Third Amended Disclosure Statement (as well as in the complaint) Plaintiff indicated settlement had been reached with Nash and failed to list the fee dispute as a claim or asset. (RJN Exh. 7.)
Statute of Limitations
Here, the statute of limitations provided by CCP §340.6 governs the first, second, and third causes of action. CCP §340.6(a) states that the limitations period to file an action for legal malpractice is one year after actual or constructive discovery, or four years after occurrence of the wrongful act or omission, whichever is first. Jocer Enterprises, Inc. v. Price (2010) 183 Cal. App. 4th 559, 566. Here, Plaintiff alleges his actions against Nash were stayed due to the automatic stay imposed by bankruptcy proceedings. (¶¶64-70.) Regarding discovery of the claims against Nash, the complaint alleges Plaintiff was forced to retain new counsel on June 28, 2011, after Nash repeatedly prepared insufficient bankruptcy petitions. (¶¶3-15.) Thus, the statute of limitations began to accrue at the time the last petition was rejected and Plaintiff’s bankruptcy case dismissed. Plaintiff’s two arguments to the contrary – presented in the complaint – are not well-taken. As the demurrer argues, that the exact damages were uncertain until December 2012 is not a basis for tolling. See Baltins v. James (1995) 36 Cal.App.4th 1193, 1203. Further, the case cited by Plaintiff in the complaint – Fiero v. Perle ¬– an unpublished case attached to the complaint as Exhibit 13 is of no precedential value. Even assuming the case was published, it is factually inapposite.

C/A 1 – Disgorgement of Attorney Fees
The first cause of action is confusing. It seems to be premised on the assertion that because Nash performed poorly as Plaintiff’s attorney, his work was not worth compensating. (¶79.) However, Plaintiff refers to case law addressing the bankruptcy court’s power to determine reasonable attorney’s fees related to bankruptcy proceedings. (¶80.) It is entirely unclear what or how much Plaintiff seeks to recover. The demurrer to this cause of action is sustained on uncertainty grounds. Defendant challenges this cause of action on four grounds – (1) Plaintiff’s claims are barred by res judicata; (2) Plaintiff’s claim is not available where he has admitted that a contract governs the relationship; (3) Plaintiff has not pled quantum meruit; and (4) disgorgement of fees is not a cause of action.

Defendant’s first argument is that Plaintiff’s claim is barred by res judicata because he has alleged that he and Defendant settled Plaintiff’s claim for reimbursement of fees. (¶¶41, 62, 76, Exh. 9.) “The burden of establishing preclusion by prior adjudication (res judicata) rests squarely on the party asserting it.” Ferraro v. Camarlinghi (2008) 161 Cal. App. 4th 509, 529. The defense of res judicata “presents a question of law for the determination of the trial court.” Rohrbasser v. Lederer (1986) 179 Cal. App. 3d 290, 296.) Plaintiff alleges not only that he and Defendant settled the dispute, but Plaintiff alleges that the Bankruptcy Court rejected his request to re-open the issue because the settlement had already been fully satisfied. (¶¶63, Exh. 12.) It does appear that Plaintiff’s “Motion to Re-Open” provided as Exhibit 12 to the complaint alleges the same facts asserted in the FAC. That motion was denied by the bankruptcy court and cannot be re-litigated here.

To the extent Plaintiff is attempting to allege quantum meruit, he must plead (1) plaintiff’s performance of services, work or labor; (2) at defendant’s request; and (3) circumstances inferring defendant’s promise to pay a reasonable value. Maglica v. Maglica (1998) 66 Cal. App. 4th 442, 449-50; MKB Management, Inc. v. Melikian (2010) 184 Cal.App.4th 796, 805 (“Even if the entire contract was illegal and unenforceable, a plaintiff may recover the reasonable value of services rendered provided that those particular services were not legally prohibited.”

Here, the complaint alleges that the parties entered into a settlement to resolve the fee issue. (Exh. 9.) Thus, this contract governs Defendant’s repayment of the fees paid by Plaintiff. Further, Plaintiff’s claims in no way speak of the elements of quantum meruit – primarily it has not been alleged that Plaintiff provided Defendant with any type of service. Moreover, disgorgement is generally a remedy and not a cause of action.

C/A 2 – Breach of Contract and Malpractice
This cause of action appears to concern the “Application for Authority to Employ Counsel.” This is provided as Exh. 1 to the complaint and is the application submitted to the bankruptcy court to gain permission to retain Defendant. To plead a cause of action for breach of contract, one must allege (1) the existence of contract; (2) plaintiffs’ performance or excuse for nonperformance; (3) defendants’ breach (or anticipatory breach); and (4) resulting damage. Wall Street Network, Ltd. v. N. Y. Times Co. (2008) 164 Cal.App.4th 1171, 1178. The demurrer is correct that the complaint fails to indicate how this is a contract or how Defendant breached it. This cause of action is not only insufficiently pled but it is also uncertain as no information is provided.

C/A 3 – Negligence and Malpractice
Plaintiff’s third cause of action appears to be premised on the dismissal of the first bankruptcy. (¶¶92-97.) Plaintiff alleges the Application for Authority to Employ Counsel established the duty owed by Defendant. To plead a cause of action for legal malpractice, one must allege (1) a duty of care owed plaintiff to use skill, prudence and diligence as other members of profession commonly possess and exercise; (2) breach; (3) causation; and (4) damage. (Burgess v. Superior Court (1992) 2 Cal. 4th 1064, 1077.) This cause of action is entirely uncertain. Plaintiff’s allegations are largely unintelligible and highly confusing. (see ¶96.)

C/A 4 – Fraud/Pleading for a CCP §1714.10 Order
To plead a cause of action for fraud, one must allege (1) a misrepresentation; (2) knowledge of falsity (or “scienter”); (3) intent to defraud (induce reliance); (4) justifiable reliance; and, (5) resulting damage. Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184. Generally, fraud must be pled with particularity. See, e.g., Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707. With regard to fraud claims, pleadings must allege facts as to “‘how, when, where, to whom, and by what means the representations were tendered.’” Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 73. Plaintiff has failed to plead any facts supporting fraud. His contention appears to be that Defendant was somehow fraudulently obtaining money and forged Plaintiff’s signature. (¶¶99-100.) The allegations do not state that Defendant made any misrepresentations and do not satisfy any of the elements of fraud, Paragraph 101 raises the issue of Civil Code §1741.10 and seeks an order permitting this action to go forward. However, this inapplicable to what Plaintiff has alleged. This section provides that ¿[n]o cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action….¿ The legislative purpose of ¿1714.10 is to eliminate frivolous allegations that attorneys have conspired with their clients. This statutory purpose is served by a pre-filing procedure to determine whether the proposed conspiracy pleading is legally sufficient, and whether it is supported by a sufficient prima facie showing of facts to sustain a favorable decision if the evidence submitted by the petitioner is credited. If either of these requirements is not met, the petition must be denied; if both are satisfied, it must be granted.

Motion to Strike
Defendant’s motion to strike notices 63 distinct portions of the complaint.
Regarding the allegations concerning punitive damages and attorneys’ fees, the court agrees that no basis for such recovery has been alleged. The remaining allegations fall into several categories – (1) legal arguments contained in the complaint; (2) irrelevant and incomprehensible facts; (3) arguments regarding Civil Code 1741.10; and (4) Plaintiff’s declaration.

The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. CCP §436. The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. CCP §437. It appears Plaintiff’s added a declaration to his complaint to verify the pleading but the complaint contains numerous additional allegations and is improper. Plaintiff’s declaration is stricken. The Civil Code §1741.10 allegations are again challenged on grounds they are inapplicable to the present complaint. Assuming parts of the motion to strike are not otherwise rendered moot by the ruling on the demurrer, these allegations are stricken as Plaintiff’s complaint consists largely of unintelligible case citations and a list of payments Defendant allegedly received. The motion to strike is granted in its entirety.

Notice of ruling by moving party.