Case Number: EC060530 Hearing Date: May 02, 2014 Dept: NCD

TENTATIVE RULING(5-2-14)
#3
EC 060530
PREVOST HEALTHCARE ENTERPRISES v. KIRKPATRICK

Motion of Defendants Alezander W. Kirkpatrick and Alexander W. Kirkpatrick, a Professional Corporation for Summary Judgment or in the Alternative Summary Adjudication of Issues

TENTATIVE:
Plaintiff’s Evidentiary Objections: Objection to Exhibit F is SUSTAINED. Objection to Kirkpatrick Declaration, para. 14 is SUSTAINED. Objection to Kirkpatrick Declaration, para. 16, is OVERRULED. These rulings on the subject objections are without prejudice to renewal of such objections or related objections at trial, if the case gets that far.

Motion for summary judgment is DENIED, as set forth below.

Motion for summary adjudication is DENIED.

ISSUE ONE: As a matter of law, the First Amended Complaint and every cause of action contained therein is barred by the statute of limitations
Motion is DENIED. Defendants have failed to offer legal analysis under which the court may assess undisputed facts and determine that the only reasonable inference is that actual injury was suffered outside the time-frame of the one year statute of limitations. A competing reasonable inference from the facts raised is that actual, palpable injury, for which plaintiff could recover damages against defendants based on their malpractice, was not suffered until the DHCS sought repayment of the Medi-Cal payments improperly claimed by and made to plaintiff. Even if the court were to find that the undisputed facts give rise to a conclusion that actual injury was suffered at some earlier time, plaintiff has raised triable issues of fact supporting a reasonable inference that defendants, by their conduct, are estopped under principles of equitable estoppel, or promissory estoppel, from asserting the statute of limitations. Specifically, the facts presented by both parties support a reasonable inference that Kirkpatrick advised Watts that there was no injury and would be none until DHCS pursued repayment of its funds, and that Kirkpatrick had promised plaintiff, and informed DHCS, that he would be responsible for any damages, and that Watts relied on this advice and promise, and reasonably refrained from action until DHCS took measures to recoup, and it became clear that Kirkpatrick would not be honoring his alleged promise to pay the DHCS himself. [See Ex. E to Kirkland Decl.; Prevost Decl., paras. 8-13, 15-19].

ISSUE TWO: As a matter of law, Defendants are entitled to judgment on the First Amended Complaint because the element of causation cannot be established.

Motion is DENIED. The issue of causation in connection with a malpractice claim is ordinarily a question of fact, and the facts here clearly support a reasonable inference that had defendants not breached their duty of duty care, and had informed Watts of the outcome and partial denial of the subject appeal, Watts would have stopped dispensing acetaminophen with codeine during the prohibited period, and not made claims for reimbursement which it has since been required to remit refunds.

ISSUE THREE: Defendants are not estopped to assert the bar of the statute of limitations.
ISSUE FOUR: Promissory estoppel does not protect Plaintiff’s claims from the bar of the statute of limitations.

Motion is DENIED. These issues do not dispose of any cause of action or affirmative defense. In addition, as noted above, triable issues of material fact have been raised with respect to the application of estoppel principles. The motion as to these issues is denied.

ISSUE FIVE: The Department of Health Care Services’s acts in negligently continuing to reimburse Plaintiff for acetaminophen with codeine notwithstanding it had imposed Procedure Code Limitations for that drug for an 18-month period of time was an independent intervening cause that cuts off Defendants’ liability for negligence

Motion is DENIED. This argument is not addressed in the memorandum. In addition, as discussed above, the causation issue is generally one of fact, and it has not been established here that the legal malpractice was not at least a partial cause of plaintiff’s alleged damages.

ISSUE SIX: Defendants are entitled to an order summarily adjudicating the Sixth Affirmative Defense to the First Amended Complaint, in their favor, that Plaintiff’s claims for recovery under equitable estoppel principles are barred by Civil Code section 3517.

Motion is DENIED. The facts suggest that plaintiff’s would not have violated the PLC, or continued in any prohibited practices, had their attorney advised them that the appeal had been denied so the PLC was in effect.

ISSUE SEVEN: Defendants are entitled to an order summarily adjudicating the Ninth Affirmative Defense to the First Amended Complaint in their favor, that any recovery by Plaintiff in this matter would be contrary to public policy in that the California Department of Health Care Services has adjudicated that Plaintiff filled prescriptions for certain controlled substance drugs without complying with specified statutory and regulatory requirements. To the extent damages sought by Plaintiff relate to the matters adjudicated by the Department of Health Care Services adversely to Plaintiff, such recovery would compensate Plaintiff for dispensing drugs not in compliance with law, and so would violate public policy.

Motion is DENIED. Defendants have failed to meet their initial burden of establishing this affirmative defense, and have specifically failed to cite any legal authority under which it is held it would violate public policy to compensate a party for liabilities it incurred for violating a prohibition to dispense drugs of which prohibition that party was unaware due to the negligence of its counsel in neglecting to advise it of the prohibition. The conduct of plaintiff at issue does not involve any conduct pre-dating the resolution of the appeal. In all events, these are factually-intensive issues.

Causes of Action from First Amended Complaint
1) Legal Malpractice
2) Legal Malpractice
3) Breach of Written Obligation
4) Legal Malpractice with estoppel by fraud

SUMMARY OF COMPLAINT:
Plaintiff Prevost Healthcare alleges that it does a retail pharmacy business under the name of Watts Professional Pharmacy. Plaintiff alleges that it retained defendant Alexander W. Kirkpatrick and his professional corporation to represent Watts in connection with the issuance by the California Department of Healthcare Services (“DHCS”) of a notice of proposed Procedure Code Limitation to preclude Watts from being paid for dispensing two drug products in the Medi-Cal program for a period of eighteen months.

Kirkpatrick filed an appeal to DHCS on behalf of Watts. On July 14, 2010, the DHCS issued its ruling on the appeal, sustaining the appeal with respect to one of the drug products, but denying it as to the other. The notice was sent to Kirkpatrick’s office but Kirkpatrick did not notify Watts of the ruling. Watts accordingly continued to dispense both drugs until the pharmacy was visited by a DHCS auditor on another matter, on September 26, 2011, and Watts by that means learned that the appeal on one of the drugs had been denied. Watts contacted Kirkpatrick, who admitted that he had not notified Watts of the ruling, told Watts that it had not yet suffered any damages, and allegedly promised that he would be responsible for any financial losses resulting from his error. Kirkpatrick also sent a letter to Watts indicating he had contacted DHCS and taken responsibility for any overpayments DHCS might claim. In November of 2012, DHCS called Watts to inform it that DHCS intended to take back the money paid for the drug which was the subject of the unsuccessful appeal, and on December 10, 2012, delivered a written statement for repayment of $31,242.33. Plaintiff alleges that its damages in this regard were caused by the legal malpractice of defendants.

GROUNDS FOR SJ:
Plaintiff’s claims are barred by the one year statute of limitations set forth in CCP § 340.6 governing legal malpractice claims. An action must 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.” The cause of action is said to accrue when the breach is discovered and the client suffers appreciable harm as a consequence of the attorney’s negligence.

Here, the facts establish that Watts had actual knowledge of Kirkpatrick’s negligence not later than September 26, 2011, when the pharmacy was visited by a DHCS auditor who told the pharmacy’s owner, Walter Prevost, that the PCL appeal had been denied fourteen months earlier. That day, in the presence of the auditor, Prevost telephoned defendant Kirkpatrick who admitted in the call he had not notified Watts of the DHCS ruling. While plaintiff alleges that in the same call, Kirkpatrick informed Prevost that Watts had not yet suffered damage because DHCS had not asked for any money back, the statement is not a promissory estoppel and did not prevent the statute from commencing to run, so long as plaintiff had sustained any appreciable damage as a result of the attorney’s omission.

Moreover, at that point, plaintiff’s own records, consisting of Explanation of Benefits or Remittance Advice Detail reports sent to pharmaceutical providers twice a month, showed the amount improperly paid for the improperly dispensed medicine.

Plaintiff’s claim that the statute of limitations did not begin to run because Kirkpatrick represented he would be responsible for any financial losses resulting from his error did not stay commencement of the limitations period. The statute therefore began to run on that date in September 2011, or, at the latest on October 24, 2011, when defendant sent a letter to plaintiff admitting his malpractice and stating he would be responsible for any harm from the error. The complaint, filed on April 26, 2013, more than one year from either of these dates, is untimely.

Defendants are not equitably estopped to assert the statute of limitations, as in response to the October, 2011 letter plaintiff did not permit Kirkpatrick to negotiate with DHCS to try to mitigate the overpayment asserted, but demanded the return of the case file, which Kirkpatrick returned.

Plaintiff’s damages were not caused by the attorney’s malpractice, but by plaintiff’s own billing practices and inadequate documentation of which plaintiff was aware as of July 2009. Plaintiff violated DHCS regulations, yet plaintiff failed to modify its own patterns and ignored the first warning letter in 2009. Plaintiff cannot recover from defendants for its own deliberate violations of DHCS regulations, which was the proximate cause of the overpayment.

Plaintiff refused to permit Kirkpatrick the opportunity to negotiate with the DHCS for reduction of overpayment which could have been significantly reduced or eliminated in its entirety. Defendant should not be held responsible for plaintiff’s refusal to mitigate damages.

OPPOSITION:
The statute of limitations presents triable issues of material fact, as any knowledge of malpractice is irrelevant if “actual injury” has not been sustained. Here, Watts did not suffer any injury until December 10, 2012, when DHCS started collecting overpayments. The auditor in September 2011 was unaware of the amount of overpayments or of DCHS’s plans for resolving the issue, and Kirkpatrick himself advised Watts that there was no damage until DCHS took its money back.

In addition, an attorney may be equitably estopped to assert the statute where the attorney’s advice was responsible for the client’s tardy filing of the action. Kirkpatrick advised Watts that there was no injury and would be none until DHCS took back the money, and Kirkpatrick promised he would be responsible for any damages. Watts relied on this advice, and reasonably refrained from action until DHCS did decide to recoup.

The proximate cause of the damages claimed was not Watts’ own billing practices, but the failure of Kirkpatrick to notify Watts of the PCL appeal denial, as had Watts been informed, it would not have dispensed the drug during the PCL period. With respect to Watts’ purported failure to allow Kirkpatrick to mitigate, Watts had no duty to continue to employ an attorney who had committed malpractice, and it is speculation that any mitigation could have been obtained. No substantial evidence is presented supporting any argument that public policy would preclude recovery.

Under CCP § 437c(p)(2) a defendant “has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action. Once the defendant… has met that burden, the burden shifts to the plaintiff… to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.”

CCP § 437c(f) provides that “a motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”

As an initial matter, the motion seeks summary adjudication of issues, but several of the issues as indicated herein would not completely dispose of a cause of action or establish an affirmative defense. In addition, the separate statement does not set forth each of the issues set forth in the notice and state the corresponding undisputed facts supporting that particular issue. Under CRC Rule 3.1350(b), if summary adjudication is sought, “the specific cause of action, affirmative defense, claims for damages or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed facts.” See also CRC Rule 3.1350(h), governing the format for separate statements, applying this requirement.

Moreover, many of the issues are not discussed in the memorandum of points and authorities.

ISSUE ONE: As a matter of law, the First Amended Complaint and every cause of action contained therein is barred by the statute of limitations

Defendants seek summary judgment of the four causes of action stated in the FAC on the ground they are each barred by the statute of limitations set forth in CCP § 340.6.

Under CCP section 340.6:
“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. If the plaintiff is required to establish his or her factual innocence for an underlying criminal charge as an element of his or her claim, the action shall be commenced within two years after the plaintiff achieved postconviction exoneration in the form of a final judicial disposition of the criminal case. 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 act or omission occurred…”

Defendants do not argue how this statute of limitations, rather than the two year statute for breach of oral contract set forth in CCP § 339, is applicable to the breach of contract cause of action, which is arguably at its core not a claim for a “wrongful act or omission,” but is perhaps rather a claim for breach of Kirkpatrick’s oral agreement made on September 26, 2011 to be responsible for any financial losses resulting from his error in not sending the DHCS appeal ruling to Watts.

With respect to discovery of the facts constituting the wrongful act or omission, it is held that operation of the statute is triggered by knowledge of certain facts, to wit; (a) that the prospective plaintiff has been damaged, and (b) that the damage was caused by the negligence of the lawyer. McGee v. Weinberg (1979) 97 Cal.App.3d 798, 804.

The action here was filed on April 26, 2013.

It is undisputed here that on August 26, 2009, Watts was issued by the DHCS a notice of proposed Procedure Code Limitations as to two drugs, 1) promethazine and codeine syrup and
2) acetaminophen with codeine, for a period of 18 months, meaning that the provider cannot be paid for the item of services of supply for a period of 18 months. [UMF No. 2, and evidence cited, Undisputed. ]. It is also undisputed that the order was to become effective unless a timely appeal was filed, that a timely appeal was filed, and that nine months later, on July 14, 2010, the appeal was granted as to promethazine with codeine, but denied as to acetaminophen with codeine. [UMF Nos. 3-5, and evidence cited]. There is also no dispute that Kirkpatrick failed to notify plaintiff of the adverse decision with respect to acetaminophen with codeine. [UMF No. 5, and evidence cited]. Accordingly, plaintiff, unaware of the DHCS appeal ruling, continued to dispense acetaminophen with codeine until plaintiff learned on September 26, 2011, when the pharmacy was visited by a DHCS auditor on another matter, that the Watts appeal of the Procedure Code Limitations order on that medication had been denied, and the auditors informed Watts that it had been erroneously dispensing the medication and billing Medi-Cal for it. [UMF No. 6, and evidence cited, Response to UMF No. 6, correcting dates]. That same date, September 26, 2011, Watts’ owner, Walter Prevost, telephoned Kirkpatrick while the auditor was still in plaintiff’s office, and Kirkpatrick admitted in the call that he had negligently not notified Watts of the July 14, 2010 DHCS appeal ruling. [UMF No. 7, Response to UMF No. 7]. Kirkpatrick also claims that during this meeting the auditor told Watts that the DCHS overpayment was estimated at $35,000, but Kirkpatrick has no personal knowledge of this, an objection has been made on this ground, and Prevost denies that this happened, or that he advised Kirkpatrick that the auditor had estimated an amount of overpayment. [See Response to UMF No. 7, and evidence cited]. This “disputed” fact will therefore not be considered in the analysis.

It is also undisputed that Watts discharged Kirkpatrick effective October 11, 2011. [UMF No. 10, and evidence cited, Response to UMF No. 10, and evidence cited]. On October 24, 2011, Kirkpatrick sent an e-mail to Watts in which he stated:
“Since I accepted responsibility for the error in not sending you the July 14, 2010 letter notifying you of the denial of the appeal, and told you that I would be responsible for any financial losses resulting therefrom, and because I had initiated discussions with both Jacqueline, the auditor, and Luzviminda Pareja, the section chief, to lay the foundation for a negotiated, and hopefully, significantly mitigated if not entirely eliminated adverse result from this situation, your suddenly cutting off my legal ability to do so absolutely will prevent me from obtaining a more favorable financial outcome for you as owners of Watts Professional Pharmacy.”
[See UMF No. 9, and evidence cited, Kirkpatrick Decl., Ex. E, p. 3].

The e-mail also expressed that if Watts filed a lawsuit against Kirkpatrick, “I very much doubt you would be able to prove any actual damages resulting from this inadvertent oversight…” [Ex. E. pp 3-4].

It is therefore undisputed that Watts discovered “the facts constituting the wrongful act or omission,” by September 26, 2011. The issue presented is whether plaintiff sustained actual injury from the malpractice at that time, in September or October of 2011, or whether no actual injury was sustained until November of 2012, when DHCS specifically informed Watts in a telephone call that DHCS was going to withhold the proceeds from all of Watts’ claims until DHCS’s claim for dispensing acetaminophen with codeine contrary to the PCL was satisfied, or December of 2012, when the DHCS began recouping the claimed PCL overpayments. [See Prevost Decl., para. 15].

Defendants quote Budd v. Nixen (1971) 6 Cal.3d 195, 203-204, decided prior to the enactment of section 340.6, in which the California Supreme Court noted, “The mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm—not yet realized—does not suffice to create a cause of action for negligence.”

[*203] In the present case, the factual issue as to accrual of damage was not resolved. Indeed, defendant’s motion for summary judgment rested solely on the proposition that the statute of limitations ran from the date of the negligent act. Plaintiff countered that the statute did not commence until damage occurred, and that such damage did not occur until entry of final judgment in the trial court on November 4, 1965. Neither party presented factual declarations relating to whether plaintiff had suffered damage prior to September 11, 1965, two years before plaintiff filed suit. Instead, the parties presented and argued the motion for summary judgment as a question of law; accordingly the trial court ruled upon the matter as a question of law, determining that the cause of action accrued on the occurrence of the negligent act.
Budd, at 202-203.

Defendants also rely on Adams v. Paul (1995) 11 Cal.4th 583, 592 and Apple Valley Unified School District v. Vavrinek, Trine, Day & Co., LLP (2002) 98 Cal.App.4th 934,

The Adams Court overall concluded that an actual injury determination cannot be made as a matter of law except on a factual showing based on undisputed facts, noting,
“If the parties agree on the sequence of events and any other material matters, the court may then determine on summary judgment point at which the fact of damage became palpable and definite even if the amount remained uncertain, taking into account all relevant circumstances.”
Adams, at 593.

In Apple Valley Unified School District, the court of appeal interpreted the two year statute of limitations for accountant malpractice, not the statute for attorney malpractice. The court of appeal affirmed the trial court’s sustaining of a demurrer without leave to amend based on the statute of limitations. The accountant malpractice statute, like the legal malpractice statute, is held not to begin to run until “the aggrieved party has suffered actual injury as a result of the negligent conduct.” Apple Valley, at 942. In addressing the actual injury inquiry, the court of appeal considered a Supreme Court case analyzing the accounting malpractice statute of limitations in which the Court found, in a case involving an accountant’s negligent filing of tax returns, that “actual harm occurs on the date the tax deficiency is assessed” by the Internal Revenue Service.” Apple Valley, at 944-945, quoting International Engine Parts, Inc. v. Feddersen & Company (1995) 9 Cal.4th 606, 609

One way in which Apple Valley may be distinguished from this case is that it is cast in the alternative, that is, it indicates that even if there was no actual injury suffered when the subject charter school funds were paid, there was such injury suffered when out of pocket costs were incurred to investigate. Here, no such out of pocket costs are at issue, because Watts did not make any payments to anyone after December 2012, during a time within the statute of limitations.

Plaintiff relies on Jordache Enterprises v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, in which it was stated, that 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,” and that “[n]ominal damages, speculative harm and the mere threat of future harm do not constitute ‘actual injury.’” Jordache, at 743, 749-750.

Estoppel
This case presents a situation where principles of estoppel raise triable issues of fact.

Plaintiff also argues that regardless of any bar of the statute of limitations, there remain triable issues of material fact with respect to whether Kirkpatrick should be equitably estopped from asserting the statute of limitations under the circumstances.

The argument is that Kirkpatrick advised Watts that there was no injury and would be none until DHCS took back the money, and that Kirkpatrick had promised he would be responsible for any damages. Watts argues that it relied on this advice, and reasonably refrained from action until DHCS decided to recoup, and it became clear that Kirkpatrick would not be honoring his promise to pay the DHCS himself.

The opposition relies on the October 24, 2011 e-mail from Kirkpatrick (Exhibit E to Kirkland Declaration), and the declaration of Prevost, in which Prevost states, in pertinent part:
“At that time, I called Kirkpatrick and asked if he had received a denial from DHCS. He admitted that he had not sent it to me, apologized and faxed me a copy of the final appeal determination. Kirkpatrick said that I suffered no damages because DHCS did not ask for any money back and if they would, he had insurance to cover it, and if the insurance would not cover it, he would. He did not put any conditions on this promise. We did not discuss a specific amount with him because we simply did not know it. Also in this conversation, Kirkpatrick did not offer to negotiate with DHCS to reduce any future amount owing by my pharmacy to Medi-Cal.
9. At the time of the initial conversation with the auditor regarding the appeal notice, I did not know how much the payback would be, or even if DHCS intended to ask for the money back. The auditor stated that she did not know what DHCS intended to do, and that she was there for a different purpose.

***
11. Several days later, I called Kirkpatrick and thanked him for taking responsibility for his error and assuming financial responsibility, if any arises in the future.

12. On October 23, 2011, I terminated the relationship with Kirkpatrick and asked for the return of the balance on the retainer.

13. On October 24, 2011, Kirkpatrick sent me a letter informing me, among other things, that:
-“ …I accepted responsibility for the errors in not sending you the July 14, 2010 letter notifying you of the denial of the appeal, and told you that I would be responsible for any financial losses resulting therefrom.” (Ex. D, Page Three, first paragraph).
– “I spoke with the auditor on that matter, and she informed me a decision has yet to be made as to whether any action will be taken with respect to your having billed for HICL 1717 [Acetaminophen with Codeine…]” (Exhibit D, Page Two, second paragraph).
– he telephoned both the DHCS auditor and the auditor’s supervisor and “it was my sense of things in speaking” with them that “they are aware the seeming violation of PCL…was not your fault and that they would deal with me to resolve the problem…” (Exhibit D, Page Two, third paragraph).
– “I informed the Department I would be responsible for any overpayments it might claim (although, as stated…there are no damages anyway); and I informed you I would take care of the problem.” (Exhibit D, Page Four, first paragraph).

Prevost also states that he did not receive any claim from DHCS until a call in November of 2012, in which an agent told him he would receive an Erroneous Payments Statement, and that the same day “I called Kirkpatrick and told him what DHCS auditor told me. Kirkpatrick did not deny liability and asked me to contact him later when I knew more information.” [Prevost Decl., paras. 15, 16]. Prevost states that he received a financial summary of the claim on December 10, 2012, and that when he received it he called Kirkpatrick on several occasions and left messages, “but he never replied and have not spoken to me since.” [Para. 17]. He states that Watts has paid the amounts requested by the DHCS, and that “I relied on attorney-Kirkpatrick’s advice and statements that I was not damaged until DHCS tries to collect the money back. And that he will take financial responsibility for any losses that I will suffer. However, when he failed to perform his promise I was forced to file this suit.” [Paras. 18, 19].

To the extent there were representations that there were no damages yet suffered, and that the DHCS may not take action at all to recoup, it appears that a trier of fact could reasonably find that Kirkland is equitably estopped to now argue that damages had already accrued and the action is therefore barred.

To the extent Kirkpatrick represented he had promised to pay anything the DHCS should request from plaintiff, and also informed the Department of that fact, the showing also appears to support a claim for equitable estoppel. In addition, although not argued by plaintiff, but alluded to by defendants in the Notice of Motion, the express promise by Kirklander could support a finding of promissory estoppel.

The Second District has set forth the elements of promissory estoppel as follows:
“The elements of a promissory estoppel claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” …’ ” (Advanced Choices, Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th 1661, 1672 [107 Cal. Rptr. 3d 470].)”
Aceves v. U.S. Bank, N.A. (2011) 192 Cal.App.4th 218, 225.

A trier of fact could reasonably find that the October 24, 2011 letter satisfies each of these elements.

Defendants argue that any promise to pay was contingent on Kirkland continuing on as counsel and being able to negotiate with the DHCS, and that such promise logically did not extend into perpetuity, beyond Kirkland being discharged as counsel for plaintiff.

This is not entirely clear from the letter itself, and the argument, at best, raises competing inferences from the evidence, and triable issues of fact with respect to the intent of the parties and the reasonableness of plaintiff’s reliance.

Accordingly, triable issues of fact remain with respect to whether defendants are estopped to assert the statute of limitations as a defense to this action, and the motion is therefore denied.

ISSUE TWO: As a matter of law, Defendants are entitled to judgment on the First Amended Complaint because the element of causation cannot be established.

The elements of such a cause of action, other than the element of the existence of an attorney’s duty of care, are generally factual to be determined by a trier of fact. Goodman v. Kennedy (1976) 18 Cal.3d 335, 342. Accordingly, the issue of causation here can only be determined on summary judgment if the facts support only one reasonable inference.

Defendants argue that plaintiff’s damages here were not caused by Kirkpatrick’s error, but by its own billing practices and inadequate documentation which lead to issuance of the PCL, and were not thereafter changed. [UMF No. 16]. The argument is that it is pure speculation that Watts would have changed its practices had it been informed of the denial of the appeal in July of 2010. These are not issues suitable for summary adjudication.

ISSUE THREE: Defendants are not estopped to assert the bar of the statute of limitations.
ISSUE FOUR: Promissory estoppel does not protect Plaintiff’s claims from the bar of the statute of limitations.

As noted above, these issues do not dispose of any cause of action or affirmative defense, and triable issues of material fact have been raised with respect to the application of estoppel principles. The motion as to these issues is denied.

ISSUE FIVE: The Department of Health Care Services’s acts in negligently continuing to reimburse Plaintiff for acetaminophen with codeine notwithstanding it had imposed Procedure Code Limitations for that drug for an 18-month period of time was an independent intervening cause that cuts off Defendants’ liability for negligence

This argument is not addressed in the memorandum. In addition, as discussed above, the causation issue is generally one of fact, and it has not been established here that the legal malpractice was not at least a partial cause of plaintiff’s alleged damages. The motion as to this issue is denied.

ISSUE SIX: Defendants are entitled to an order summarily adjudicating the Sixth Affirmative Defense to the First Amended Complaint, in their favor, that Plaintiff’s claims for recovery under equitable estoppel principles are barred by Civil Code section 3517.

This issue is also not addressed in the memorandum. The Sixth Affirmative Defense is that all of plaintiff’s claims are barred by Civil Code § 3517, which provides, “No one can take advantage of his own wrong.”

Again, to the extent the argument is that plaintiff’s own billing practices brought on the PLC, the facts suggest that plaintiff would not have violated the PLC, or continued in any prohibited practices, had counsel advised plaintiff that the appeal had been denied so the PLC was in effect. In all events, these are not issues suitable for summary adjudication. The motion is denied.

ISSUE SEVEN: Defendants are entitled to an order summarily adjudicating the Ninth Affirmative Defense to the First Amended Complaint in their favor, that any recovery by Plaintiff in this matter would be contrary to public policy in that the California Department of Health Care Services has adjudicated that Plaintiff filled prescriptions for certain controlled substance drugs without complying with specified statutory and regulatory requirements. To the extent damages sought by Plaintiff relate to the matters adjudicated by the Department of Health Care Services adversely to Plaintiff, such recovery would compensate Plaintiff for dispensing drugs not in compliance with law, and so would violate public policy.

This issue is not addressed in the memorandum. The Ninth Affirmative Defense is recited in the Issue Seven. There is no legal authority cited under which it would violate public policy to compensate a party for violating a prohibition to dispense drugs of which prohibition it was unaware due to the negligence of its counsel in neglecting to advise it of the prohibition.
Conclusion
While no case is ever “quite that simple”, one inquiry that apparently arises is whether the roughly $35,000 initially at issue here justifies transaction costs that probably have well eclipsed that amount already, or are fast approaching this. If this case proceeds to a 5-7 day jury trial or a 7-10 day jury trial, transaction costs are likely to eclipse $35,000 four-fold or five-fold, at least. Is a further MSC in order now?