Judge: Alison Mackenzie, Case: 23STCV28830, Date: 2024-04-26 Tentative Ruling
Case Number: 23STCV28830 Hearing Date: April 26, 2024 Dept: 55
NATURE OF PROCEEDINGS:
Demurrer of Defendant Doniger / Burroughs as to Plaintiff’s First, Second,
Third, and Fourth Causes of Action.
BACKGROUND
WILLIAM WESTWOOD (“Plaintiff”) filed a Complaint against
SCOTT BURROUGHS and DONIGER BURROUGHS (“Defendants”), alleging that they, as
Plaintiff’s attorneys, failed to act with reasonable diligence in pursuing
Plaintiff’s claims of copyright infringement, before the statute of limitations
expired. The causes of action are (1) Breach of Contract, (2) Breach of Implied
Covenant of Good Faith, (3) Professional Negligence, and (4) Breach of
Fiduciary Duty- Constructive Fraud.
Defendant DONIGER / BURROUGHS (“Defendant”) demurs to each
of the claims in the Complaint. Plaintiff opposes the demurrer.
REQUEST FOR JUDICIAL NOTICE
Defendant seeks judicial notice of two email strings between
the parties, two filings from a federal court case, and the parties’ engagement
agreement. “‘[J]udicial notice of matters upon demurrer will be dispositive
only in those instances where there is not or cannot be a factual dispute
concerning that which is sought to be judicially noticed.’” Unruh-Haxton v.
Regents of Univ. of Cal. (2008) 162 Cal.App.4th 343, 365. A trial court errs in taking judicial notice
of facts in documents, where they are in dispute. Herrera v. Deutsche Bank Nat. Trust Co.
(2011) 196 Cal.App.4th 1366, 1375. “The declaration of an adverse party is not
a proper subject for judicial notice.” Big Valley Band of Pomo Indians v. Superior
Court (2005) 133 Cal. App. 4th 1185, 1192 (declaration was reasonably
subject to dispute, because parties could question accuracy of records and
searches). Letters are not properly the subject of judicial
notice, where the contents do not fall within the lists in Evidence Code
sections 451 and 452. Tenet Healthsystem Desert, Inc. v. Blue Cross of Cal.
(2016) 245 Cal.App.4th 821, 836. Defendant seeks judicial notice of the emails
to establish certain facts as true for purposes of the demurrer, which is
impermissible. The Court denies the request for judicial notice of the emails.
Defendant seeks judicial notice of the engagement
agreement. But generally, judicial notice of contracts is improper. Freemont Indem. Co. v. Fremont General
Corp. (2007) 148 Cal.App.4th 97, 114-15. The Court denies Defendant’s request.
With respect to the court filings, while courts can
take judicial notice of the existence of such documents, courts cannot take
judicial notice of hearsay statements asserted in court filings. Johnson
& Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 768. The
existence of the federal court filings is of no consequence to deciding this
demurrer and thus the Cour exercises its discretion to deny judicial notice of
the filings. E.g., Barratt Amer., Inc. v. City of San Diego (2004) 117
Cal. App. 4th 809, 812, fn. 2 (court denied judicial notice as being irrelevant
to demurrer).
LEGAL STANDARD
When considering demurrers, courts read the
allegations liberally, reasonably and in context. MKB Management, Inc. v. Melikian
(2010) 184 Cal.App.4th 796, 802. “[D]emurrers for uncertainty are disfavored,
and are granted only if the pleading is so incomprehensible that a defendant
cannot reasonably respond.” A.J. Fistes Corp. v. GDL Best Contractors, Inc.
(2019) 38 Cal.App.5th 677, 695 (internal quotation omitted).
ANALYSIS
1. Statute
of Limitations – All Causes of Action
Defendant contends that each of the claims in the
Complaint are time-barred. “A demurrer on the ground of the bar of the statute
of limitations will not lie where the action may be, but is not necessarily
barred.... It must appear clearly and affirmatively that, upon the face of the
complaint, the right of action is necessarily barred.... This will not be the
case unless the complaint alleges every fact which the defendant would be
required to prove if he were to plead the bar of the applicable statute of
limitation as an affirmative defense.” Lockley v. Law Office of Cantrell,
Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881 (internal
quotation omitted). “[T]o prevail on a demurrer based on the statute of
limitations, a defendant must establish the entire cause of action is
untimely.” Pointe San Diego Residential Community, L.P. v. Procopio, Cory,
Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 274.
Code of Civil Procedure Section 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. As to each cause of action where the
gravamen is legal malpractice, the statute of limitations of Code Civ. Proc., section
340.6 is applicable. Leasequip, Inc. v. Dapeer (2002) 103 Cal.App.4th 394,
401. In legal malpractice cases, tolling of Code of Civil Procedure Section
340.6 occurs where, under an objective standard, conduct showed an ongoing
attorney-client relationship. Nielsen v. Beck (2007) 157 Cal.App.4th
1041, 1049-1052
Defendant contends that Plaintiff knew the facts for his
claims no later than 3/17/22, when the alleged injury occurred, but he filed
the Complaint untimely on 11/27/23. Defendant contends that accrual of the
statute of limitations is admitted at paragraphs 12 and 18 of the Complaint as
well as the date of obtaining new counsel. E.g., Demurrer, 5:12-27. The Court
disagrees. The Complaint does not reveal when the statute of limitations on
legal malpractice claims accrued. To the contrary, the Complaint alleges: “Unbeknown
to Plaintiff, his claim of copyright infringement had to be filed not later
than March 16, 2022 or it was subject to forfeiture by time bar. Plaintiff did
not know this; and Burroughs did not disclose it.” See Complaint, ¶¶ 12 and 18.
Additionally, the Complaint alleges a variety of types of legal malpractice,
beyond just an allegedly blown statute of limitations on the copyright
infringement claims, without indicating the times of Plaintiff’s knowledge of
accrual. See Complaint, ¶ 20. Further, the Complaint, at paragraph 18, does not
specify when Defendant ceased to be in the attorney-client relationship, but
merely states that, on 4/29/22, “Plaintiff sought other counsel…” The
declaration and exhibits filed with the demurrer, which mirror the exhibits in
the request for judicial notice, are not authorized for consideration. Even
considering exhibit 5, its content does not admit when Defendant’s work for
Plaintiff completely ended the attorney-client relationship that could have
tolled the statute of limitations.
Thus, the statute of limitations is not revealed as to
any entire cause of action. Because it is not revealed, the Court need not
reach the question of Plaintiff’s request for leave to amend, partly based upon
delayed discovery in first learning in May 2023 of the
expired statute of limitations as to an action. See Plaintiff’s Decl., ¶ 5.
Therefore, the Court rejects the demurrer’s reliance
on the statute of limitations.
2. Sufficiency
of Allegations- Professional Negligence, Breach of Contract, and Breach of Implied Covenant of Good Faith and
Fair Dealing
Defendant argues that Plaintiff’s professional negligence
claim fails because Plaintiff provided Defendant with misrepresentations about the
date Plaintiff discovered the alleged copyright infringement, and such false
information cannot support a negligence claim. Demurrer, pp 7-8. Similarly, Defendant argues that the same
facts contractually insulate Defendant from liability on the breach of contract
and breach of implied covenant of good faith and fair dealing claims. Demurrer,
pp 9-11.
“[D]efendants cannot set forth allegations of fact in
their demurrers which, if true, would defeat plaintiff’s complaint.” Gould
v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1144.
An opinion summarizes claims of negligence and
fiduciary duty as to legal malpractice, as follows:
“ ‘Actionable legal
malpractice is compounded of the same basic elements as other kinds of
actionable negligence: duty, breach of duty, causation, and damage. The
elements of a cause of action for professional negligence are: (1) the duty of
the professional to use such skill, prudence and diligence as other members of
the profession commonly possess and exercise; (2) breach of that duty; (3) a
causal connection between the negligent conduct and the resulting injury; and
(4) actual loss or damage resulting from the professional negligence.’
[Citation.]” ( Loube v. Loube (1998) 64 Cal.App.4th 421, 429, 74 Cal.Rptr.2d
906.) “To establish a cause of action for breach of fiduciary duty, a plaintiff
must demonstrate the existence of a fiduciary relationship, breach of that duty
and damages.”
Shopoff & Cavallo LLP v. Hyon
(2008) 167 Cal.App.4th 1489, 1508-1509.
Here, the Complaint says nothing about Plaintiff
misrepresenting the date of discovery, and the demurrer is not permitted to
exceed the allegations or matters that are subject to judicial notice. Additionally, Plaintiff counters
Defendant’s exhibit 5 for judicial notice, by saying he had provided documents
indicating that he learned of just one of the infringements in 2019. Opposition,
1:11-12.
Further, the Complaint alleges damages caused by loss
of a meritorious copyright claim, notwithstanding the demurrer statements of
facts indicating no damages. Demurrer, ¶ 24. In that regard, Plaintiff argues
that the underlying case settlement did not negate the claim of lost damages,
since it was only one of the cases and Plaintiff still lost tens of thousands of
dollars in damages. Opposition, 6:26-27.
The Court rejects the demurrer ground as to the claims
for professional negligence, breach of contract, and breach of the implied
covenant.
3. Sufficiency
of Allegations- Fiduciary Duty and Constructive Fraud
Defendant asserts that there are no allegations about
intent to breach a fiduciary duty or to deceive or to cause reliance or
causation. Demurrer, 11:27-27. “[A]ttorneys have a fiduciary obligation to
disclose material facts to their clients, an obligation that includes
disclosure of acts of malpractice....” Beal Bank, SSB v. Arter & Hadden,
LLP (2007) 42 Cal.4th 503, 514.
Here, the Complaint incorporates by reference all
prior factual allegations. Complaint, ¶ 32. Thus, it sufficiently alleges that Plaintiff
relied upon Defendant’s nondisclosure of the date of expiration of the statute
of limitations and that Defendant intended to coverup its misconduct. Complaint,
¶¶ 12, 18, 19 and 34.
Therefore, the Court overrules the demurrer as to
fiduciary duty and constructive fraud.
CONCLUSION
The Court overrules the demurrer. Twenty days to
answer.