2011-00107430-CU-FR

Christina J. Gonzalez vs. Todd William Johnson

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

Filed By: Kohls, Daniel V.

Defendant Nancy Reed’s Motion for Summary Judgment or in the Alternative for
Summary Adjudication of Issues is GRANTED in part and DENIED in part.

Plaintiff’s Request for Judicial Notice is GRANTED.

Defendant’s Request for Judicial Notice is GRANTED.

The Court rules on defendant’s evidentiary objections as follows: objections nos. 1-39,
44-45, 48, 61-64, 66-80 are SUSTAINED, the remainder are OVERRULED.

The Court rules on Plaintiff’s evidentiary objections as follows: objections nos. 1-3 are SUSTAINED, the remainder are OVERRULED. Plaintiff must submit a separate,
formal Order on evidentiary objections in compliance with California Rules of Court,
Rule 3.1354(c) for the Court’s signature at the time the proposed order on the motion
is submitted.

Defendant’s Request for Judicial Notice is GRANTED.

Plaintiff Christina J. Gonzalez’s Corrected Second Amended Complaint, sets forth
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eight causes of action: the 1 for negligence, 2 for breach of contract , 3 for
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constructive fraud, 4 for conversion, 5 for breach of fiduciary duty, 6 [misnumbered
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as 5 ] for fraud by concealment, 7 for civil conspiracy and 8 for intentional infliction
of emotional distress. All causes of action are alleged against defendant Nancy Reed.

Nancy Reed moves for summary judgment on the grounds that all causes of action,
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except the 6 for fraud by concealment, are barred by the applicable statutes of
limitation as set forth in C.C.P., secs. 340.6(a), 335.1 and 338(d).

Christina Gonzalez has sued attorney Nancy Reed for alleged wrongful acts or
omissions arising out of Nancy Reed’s representation of the Administrator of
Christina’s mother’s probate estate. Moving party contends that Christina Gonzalez
and her attorney, Robert Schaldach discovered the facts which they contend constitute
the alleged wrongful actions or omissions of Nancy Reed no later than March 21,
2008.

Moving party has shown by admissible evidence that plaintiff and her attorney knew
the facts underlying the claims against Nancy Reed by no later than March of 2008,
yet chose not to file suit against Nancy until July 15, 2011 – more than three years after
plaintiff and her attorney became aware of the facts underlying all of the causes of
action against Nancy Reed.

Statutes of Limitations

C.C.P., sec. 340.6

Code of Civil Procedure, 340.6, subs. (a), provides in relevant part: “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.”

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
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claim and constructive fraud claims]; 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.
Therefore, each cause of action of the SAC, other than fraud by concealment, alleged
against attorney Nancy Reed falls under the limitations period of C.C.P., sec. 340.6. Here, moving party contends that plaintiff or her counsel, discovered or should have
discovered the facts constituting the wrongful act or omission by attorney Nancy Reed
by March 21, 2008, or not later than the end of July 2008. (UMF 2, 5.) The acts and
omissions alleged against Nancy Reed arise out of the provision of legal services.
(UMF 3) Plaintiff filed her original complaint in this action on July 15, 2011. (UMF 7.)

The Court finds that the one year statute of limitations period of C.C.P., sec. 340.6 is
applicable here as plaintiff and her counsel were aware of sufficient material facts to
know that the insurance proceeds were no longer in the CUTMA account and that
Nancy Reed and Todd Johnson were involved in setting up that account, no later than
early 2008. Plaintiff suffered actual injury not later than Nov. 2007. The complaint was
not filed within the one year limitations period.

The Court finds that moving party has met her initial burden of proof on summary
adjudication that all causes of action except the cause of action for fraudulent
concealment are barred by the one year statute of limitations.

Although in opposition, plaintiff purports to dispute some of the material facts, no
relevant, admissible evidence to dispute any material fact is provided.

Plaintiff’s contention that the last overt act of the conspiracy occurred in Sept. 2009
when BYA induced plaintiff to agree to a dismissal without prejudice. Assuming that to
be correct, Sept. 2009 is still one year and 10 months before the filing of this suit on
July 15, 2011.

Plaintiff’s contention that Nancy Reed “conceded” the statute of limitations issue on
demurrer is not well taken. The legal standards for demurrer and summary judgment
are very different. Further, Reed’s demurrer to the SAC did not even address the bar
of the limitations period set forth in C.C.P., sec. 340.6. Collateral estoppel is
inapplicable.

Nancy Reed’s failure to disclose that she was married to Michael Reed does not affect
any of these causes of action. As Plaintiff suffered actual injury not later than Nov.
2007, when she discovered that her CUTMA account had been emptied by Johnson,
the later discovery of the relationship between Nancy Reed, Johnson’s attorney, and
Michael Reed, securities broker for BYA does not create a new and different injury. At
best it is a fact in support of the fraud cause of action.

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Summary adjudication as to the 1 for negligence,2nd for breach of contract,3rd for
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constructive fraud, 4 for conversion, 5 for breach of fiduciary duty,7 for civil
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conspiracy and 8 for intentional infliction of emotional distress are GRANTED.

C.C.P., sec. 338(d)

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Summary adjudication of the 6 [misnumbered as 5 ] for fraud by concealment is
DENIED.

C.C.P., sec. 338 (d) provides for a three year statute of limitations for: “An action for
relief on the ground of fraud or mistake. The cause of action in that case is not deemed
to have accrued until the discovery, by the aggrieved party, of the facts constituting the
fraud or mistake.” Plaintiff’s SAC complaint alleges, inter alia, that Defendants concealed that she was a
beneficiary of her mother’s life insurance proceeds under Decedent’s will. Defendants
and each of them further concealed from plaintiff that they had diverted said funds,
amounting to $320,000 or more, to an account that they controlled. Defendants further
concealed from plaintiff the fact that they converted such funds for their own purposes
despite owing a fiduciary duty and a duty under a constructive trust theory to disburse
such funds to her upon her reaching the age of majority. (SAC, 132-140.)

Plaintiff alleges she first discovered Todd Johnson’s application for a CUTMA account
with BYA on or after July 18, 2008. (SAC, para. 166.) Additionally, plaintiff did not
discover the marriage between Nancy Reed, Johnson’s attorney, and Michael Reed,
securities broker for BYA, until August 30, 2010. (Gonzalez Dec., paras. 7, 8, 13.)

Plaintiff’s belated discovery of these facts underlying the Fraud by Concealment cause
of action occurred within three years of plaintiff filing the Complaint on July 15, 2011.

The Court finds that the moving party has failed to meet its initial burden of proof on
summary adjudication of the fraud cause of action. The motion is therefore denied.

As summary adjudication of all causes of action is not granted, Nancy Reed’s motion
for summary judgment is denied.

The prevailing party shall prepare a formal order for the Court’s signature pursuant to
C.R.C. 3.1312.