Case Number: BC503447    Hearing Date: July 09, 2014    Dept: 32

CASE NAME: Leonard J. Anebere v. John R. Setlich, et al.
CASE NO.: BC503447
HEARING DATE: 07/09/14
DEPARTMENT: 32
CALENDAR NO.: 3
SUBJECT: Demurrer to the Second Amended Complaint
MOVING PARTY: Defendants John R. Setlich and Law Offices of John R. Setlich
RESP. PARTY: Plaintiff Leonard I. Anebere, in pro per

COURT’S TENTATIVE RULING

Demurrer to the Second Amended Complaint(“SAC”)

First Cause of Action (Constructive Fraud on Misrepresenting Proper Representation of Plaintiff’s Case) OVERRULED.

Second Cause of Action (Constructive Fraud on Misrepresenting Merits of Case) OVERRULED.

Demurrer for Uncertainty OVERRULED.

ANALYSIS

Defendants demur to the first and second causes of action in the SAC for failure to state a claim. The SAC was filed on December 30, 2013 following the court’s ruling (per Judge Mary H. Strobel) on the demurrers to the first amended complaint (“FAC”) on December 9, 2013.

Statute of Limitations – CCP § 340.6

This case arise from the defendants’ services as an attorney for the plaintiff in litigation in Los Angeles Superior Court. As such, Defendants contend that this action is barred by the statute of limitations (“SOL”) for legal malpractice, Code of Civil Procedure § 340.6. The court rejected this argument in ruling on Defendants’ demurrer to the first amended complaint (“FAC”). Defendants have not explained why the court should reconsider that prior ruling, and, in fact, Defendants continue to refer to the FAC in their demurrer with respect to the SOL argument. (Dem. 5-7.) As Defendants have not asserted any new reasons the SOL would apply, the court incorporates the following analysis from its ruling dated December 9, 2013:

“To sustain a demurrer based on a SOL, it must appear clearly and affirmatively from the complaint that that the SOL has run. It is not enough that the complaint might be barred. (Childs v. State of California (1983) 144 Cal.App.3d 155, 161.)”

“An action against an attorney for wrongful act or omission, other than for actual fraud, arising in the performance of professional services must be brought 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 comes first. (CCP § 340.6.) “Where the injury is suffered by reason of an attorney’s professional negligence, the gravamen of the claim is legal malpractice, regardless of whether it is pled in tort or contract.” (Kracht v. Perrin, Gartland & Doyle (1990) 219 Cal.App.3d 1019, 1022-23 [gravamen of cause of action for constructive fraud held to be professional negligence].) In opposition, Plaintiff does not seriously dispute that CCP § 340.6 would apply to his causes of action for constructive fraud. (Oppo. 7-9.)”

“Defendants have not shown that the FAC is barred by the SOL stated in § 340.6. Defendants contend that Plaintiff suffered actual injury when Defendant Setlich filed a declaration stating why he would not be filing trial documents per the court’s order (March 12, 2012) and when he failed to appear at the FSC and MSC (March 19, 2012). (See FAC ¶¶ 12-16.) “Actual injury occurs when the client suffers any loss or injury legally cognizable as damages in a legal malpractice action based on the asserted errors or omissions.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 743-44.)”

“Here, it is not clear from the FAC that Plaintiff would have suffered injury when Defendants indicated that they would not file trial documents or when Setlich failed to appear for an FSC and MSC. “Determining actual injury is predominantly a factual inquiry.” (Jordache, supra at 743.) After the acts alleged, the court later rescheduled the FSC and MSC, sanctioned Defendants, ordered Defendants to re-file certain trial documents, and ordered Defendants to appear for trial on April 2, 2012. (FAC ¶ 16.)”

“As discussed in opposition, the FAC can be read to allege that the injury occurred sometime between March 23, 2012 (dismissal of the action), and April 2, 2012, when Plaintiff appeared for trial and learned that Defendants had dismissed the case without Plaintiff’s authorization. (See FAC ¶¶ 16-18.) It is unclear whether the dismissal would have caused Plaintiff to lose a cause of action (due to the statute of limitations or other reasons), but, at the least, he would have lost the attorney’s fees expended on the case up to that time. Because the instant action was filed within one year of April 2, 2012, when Plaintiff allegedly learned of the dismissal, it does not appear from the face of the FAC that the action is time barred.”

The above analysis would apply to the allegations in the SAC as well. Based on the foregoing, Defendants have not shown that the SAC is barred by the SOL.

First and Second Causes of Action – Constructive Fraud

Defendants contend that Plaintiff has not alleged the elements of constructive fraud with sufficient specificity. To state a cause of action for constructive fraud, Plaintiff must allege the following elements: (1) Fiduciary, confidential or special relationship; (2) breach (e.g., nondisclosure); (3) intent to deceive; (4) reliance; (5) causation; and (6) damages. (Younan v. Equifax Inc. (1980) 111 Cal. App. 3d 498, 516, 517 n. 14.)

Defendants contend that Plaintiff has not alleged the elements of fraud with sufficient specificity. Fraud actions are subject to strict requirements of particularity in pleading. A plaintiff must allege what was said, by whom, in what manner (i.e. oral or in writing), when, and, in the case of a corporate defendant, under what authority to bind the corporation. (See Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782.; Tarmann v. State Farm Mutual Auto Ins. Co. (1991) 2 Cal. App.4th 153, 157.)

In the SAC, Plaintiff alleges the following: “Plaintiff communicated to Defendants, that Plaintiff’s goals in litigation of the “The Foreman Case” included recovery of all damages including, attorney’s fees and all the money’s he paid over the years to make necessary correction to the property to comply with the City of Inglewood Building Code. Defendant represented to Plaintiff that he “Plaintiff” had a strong case and that Defendants will pursue Plaintiff’s case
vigorously. Defendant further told Plaintiff the he practices Real Estate Law and had represented numerous clients in cases involving Real Estate Fraud and Failure to disclose, that he will use all his skill and experience in representing Plaintiff’s case. Defendants represented themselves to Plaintiff as qualified on issues involved in Plaintiffs case. That Plaintiff’s case was an extremely strong case supported by documentation and therefore merited litigation.” (SAC ¶ 25.)

The demurrer is unpersuasive because Defendants discuss allegations in the FAC, and not the SAC. (See Dem. 8.) Defendants have not addressed the allegations of paragraph 25, which allege the nature of the communications between Plaintiff and Defendants, including Defendants alleged false statements. Moreover, the SAC appears to be based on more than these misrepresentations. Plaintiff also alleges breaches of duty associated with Defendant’s handling of the underlying case, including a failure to appear for trial and hearings, dismissing Plaintiff’s case without authorization, and similar conduct. (SAC ¶¶ 14-21.) Defendants have not addressed such allegations in the demurrer or shown they cannot support a constructive fraud claim.

Defendants contend that Plaintiff has not alleged a fiduciary relationship since Defendants purportedly misrepresented their expertise and the strength of Plaintiff’s case before they became Plaintiff’s attorney. This argument is unpersuasive as Defendants cite no authorities suggesting that they would not owe Plaintiff a fiduciary duty during this initial stage of the representation. It stands to reason that an attorney that makes representations to a prospective client to obtain employment could owe a fiduciary duty to the prospective client. (Wolf v. Sup. Ct. (2003) 130 Cal.Rptr.2d 860, 863 [generally, a fiduciary duty arises where a confidence is reposed in another’s integrity to take no advantage in relation to the interest of the other party absent knowledge or consent].) Moreover, one could infer from the SAC that Defendants could have corrected the misrepresentations once the attorney-client relationship was formed.

Defendants contend that Plaintiff has failed to allege facts establishing Defendants’ breach. As discussed above, Plaintiff has alleged sufficient facts regarding misrepresentations made by Defendants, as well as Defendants’ mishandling of the underlying case.

Defendants contend that Plaintiff has not alleged facts showing that Defendants gained an advantage as a result of the fraud or that Plaintiff suffered damages. However, Plaintiff alleges that he paid $28,000 in attorney’s fees to Defendants because of the misrepresentations. Thus, Plaintiff has alleged that Defendants obtained an advantage by the fraud and that Plaintiff suffered damages of at least $28,000. (SAC ¶ 29.)

Based on the foregoing, the demurrer to the first and second causes of action is OVERRULED.

Demurrer for Uncertainty

Demurrers for uncertainty are strictly construed, because discovery can be used for clarification, and apply where defendants cannot reasonably determine what issues or claims are stated. (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Defendants fail to show that the SAC is so uncertain that they cannot determine what issues are stated. The demurrer for uncertainty is OVERRULED.