Bar Slip Doesn't Sink Ship

Brawerman v. Loeb & Loeb LLP, No. B305802 (Aug. 3, 2022).

Confirmation of an arbitration award in a legal malpractice case. Attorneys at Firm were alleged to have screwed up in papering a VC’s investment in Client’s company. The arbitrator found that Firm was negligent, but that its negligence was not the cause of Client’s injury. But it came out during the arbitration that one associate on the team was not licensed to practice in California. (He was licensed in New York and New Jersey.) The arbitrator ruled that the fees billed by the associate needed to be disgorged, but otherwise denied relief.  

Client moved to vacate the award, on the theory that the retainer agreement was illegal because Firm was engaged in the unlicensed practice of law, and thus that there was no legit basis to compel arbitration. But that doesn’t render the entire agreement void to the extent that it implicates the validity of the arbitration clause. The case law is pretty clear that when out-of-state lawyers practice in California without a license, their fees are disgorgable, but only to the extent that unlicensed work was performed here. In this case, much of the work was done by the California-barred partner. That means that the whole retainer agreement is not facially illegal. So the agreement to arbitrate can be severed from whatever unlawful practice occurred.

Affirmed.

A Malpractice Hall of Mirrors

Gotek Energy Corp. v. SoCal IP Law Grp., No. B266684 (D2d6 Oct. 12, 2016)

Client hires “Law Firm #2” to bring a malpractice case against Law Firm #1—its prior patent counsel—for blowing a deadline for some patent applications. But Firm #2’s own complaint was filed after the one-year statute in Code of Civil Procedure § 340.6 had run. But that limit is tolled during the time an attorney-client relationship exists between the client/plaintiff and the attorney/defendant. So the issue in this case is when the relationship between Client and Firm #1 ended. Firm #1 claims the relationship ended when—a year and a week before this case was filed—it sent an email to Client informing Client that it needed to withdraw. The next day, Client replied by email to Firm #1, sting that it was terminating the relationship and demanding that Firm #1 immediately transfer the client file to new counsel. Client claims the date extended until the date its files were actually received by new counsel—364 days before the complaint in this case was filed.

The trial court sided with Firm #1, finding that the relationship ended when client said so. The fact that some ministerial work was done to transfer the files after Firm #1 was told it was terminated did not extend a confidential attorney client relationship until that work was complete. The trial court also awarded Firm #1 its fees under a fee provision in Client’s retainer agreement.

The Court of Appeal affirms. Tolling under § 340.6 stops when a client ceases to have any reasonable expectation that legal work will be performed. Given the unequivocal termination, the mere fact of the post-termination transfer of the client’s file did not provide a reasonable basis to believe that there was any kind of ongoing attorney-client relationship. The Court of Appeal further finds Client’s arguments against the fee award to be makeweight.

So the world inevitably await the malpractice case against the attorneys who blew the SOL on a malpractice case against some attorneys who blew the SOL on a patent filing. These guys really need to hire some counsel with a decent calendaring system.

Affirmed.

The Gravamen of Litigation Malpractice

Sprengel v. Zbylut, No. B256761 (D2d7 Oct. 13, 2015)

The anti-SLAPP statute can be tricky when it comes to cases involving litigation malpractice. To the extent that the claims touch on stuff an attorney does in court they at least superficially can seem to satisfy the first, “arising from” element of the two-pronged test. But on a less literal level, that doesn’t make any sense. A malpractice claim that a client brings against his own attorney has essentially nothing to with chilling anyone’s First Amendment rights, even if the attorney’s in-court or litigation related statements are somehow implicated in the malpractice.

Legal Malpriactice Is Not Subject to SLAPP

Loanvest I, LLC v. Utrecht, No. A141564 (D1d3 Mar. 26, 2015)

Superficially, claims of litigation malpractice seem like they arise from protected petitioning activity under the first prong of the anti-SLAPP analysis. After all, litigation is quintessential petitioning activity. But when you scratch the surface, the gist of the claims isn’t really the petitioning itself; it is that the petitioning was incompetent. So while claims against attorneys by third parties and claims against attorneys for petitioning on behalf of other clients generally come within the ambit of Code of Civil Procedure § 425.16(e), claims by a client based on petitioning on behalf of that client do not. A pretty long line of cases bears this out.  

Reversed.

Leave No Stent Behind ...

Maher v. County of Alameda, No A135792 (D1d1 Feb. 18, 2014).
 
This is a med-mal case where hospital defendant implanted a biliary stent as part of treating plaintiff for gunshot wounds back in 1996. Plaintiff claimed to be unaware of the stent and only learned of it when he was hospitalized for liver complications in 2010. Plaintiff's doctors told him that the stent was only designed to be temporary and should have been removed within three to six months of installation. In the meantime, the stent had begun to disintegrate and migrate away from where it had been placed, which played some role in his complications. Plaintiff sued the hospital, which demurred on statute of limitations grounds. The trial court granted the demurrer but the court of appeal reverses. The med-mal statute of limitations is Code of Civil Procedure § 340.5. It limits tolling to three years except in certain exceptional circumstances. But one of those circumstances permits tolling when there is “the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person.” The court here finds that a temporary stent that has been left in place for more than a decade after it served any medical purpose meets that requirement, so the plaintiff was entitled to tolling until he found out about the implanted stent in 2010.

Reversed and remanded.

Celotex:Aguilar::Twombly:Prakashpalan?

Prakashpalan v. Engstrom, Lipscomb & Lack, No. B244236 (D2d1, as modified Feb. 26, 2014)

The court of appeal affirms in part and reverses in part a trial court’s order sustaining a law firm’s demurrer to a bunch of claims brought by a former client. It holds that certain of plaintiff’s claims are subject to a statute of limitations that applies to fiduciaries, and accordingly, that those claims are not barred due to the statute’s generous tolling rule. But as to plaintiffs’ claims for failure to disclose a conflict of interest and failure to maintain confidentiality, the court affirms dismissal because the complaint did not explain how these failures resulted in the harm allegedly suffered by the plaintiffs