Judge Daniel M. Crowley, Case Number: 23STCV20031, Date: 2025-01-09 Tentative Ruling

Defendants HG Law, APC’s and Hyka A. Karapetian’s demurrer to Plaintiffs Lilit Keshishyan’s and Levon Ehtibaryan’s third amended complaint is sustained without leave to amend in the 1st, 2nd, 3rd, 4th, and 5th causes of action.

Defendants HG Law, APC’s and Hyka A. Karapetian’s motion to strike is denied as moot.

Defendants HG Law, APC (“HG Law”) and Hyka H. Karapetian (“Karapetian”) (collectively, “Defendants”) demur to Plaintiffs Lilit Keshishyan’s (“Keshishyan”) and Levon Ehtibaryan’s (“Ehtibaryan”) (collectively, “Plaintiffs”) third amended complaint (“TAC”). (Notice of Demurrer, pg. 2; C.C.P. §§430.10 et seq.) Defendants also move to strike portions of the TAC. (Notice of MTS, pgs. 1-2; C.C.P. §§435, 436.)

Plaintiffs filed their initial Complaint on August 22, 2023. On November 17, 2023, Plaintiffs filed their first amended complaint (“FAC”) against Defendants. On March 19, 2024, this Court sustained Defendants’ demurrer to each cause of action in the FAC with 20 days leave to amend. (3/19/24 Minute Order.)

Plaintiffs filed their second amended complaint (“SAC”) against Defendants on April 11, 2024. This Court sustained Defendants’ demurrer to each cause of action in the SAC with 20 days leave to amend. (9/17/24 Minute Order.)

Plaintiffs filed the operative TAC on October 7, 2024, alleging five causes of action: (1) legal malpractice; (2) breach of fiduciary duty; (3) fraud and deceit; (4) breach of contract; and (5) violation of Penal Code §496.

This action arises out of Plaintiffs retaining HG Law on June 28, 2017, to represent them regarding a June 27, 2017, auto collision that occurred in Glendale, California, for a personal injury action against Commercial Waste Services Inc. and its driver, Ramon Alcantara. (TAC ¶¶19-20.)

Plaintiffs allege they each executed separate Client Services Agreements for the retention of Defendants in the personal injury action. (TAC ¶21.) Plaintiffs allege the Client Services Agreements for Plaintiffs were contingency fee agreements and provided that the attorney’s fees for Defendants were as follows: 33 1/3% if a recovery was made before filing suit, 40% if any recovery was made after suit, 50% in the event of an appeal, and 0% if no recovery was obtained. (TAC ¶21.) Plaintiffs allege the scope of the Client Services Agreements executed by Plaintiffs are specifically limited to the personal injury action. (TAC ¶21.)

Plaintiffs allege that in or about 2016, Defendants represented Plaintiff Ehtibaryan in a criminal case filed in Los Angeles Superior Court, Case Number 6MN08323. (TAC ¶18.) Plaintiffs allege Defendants failed to enter in a written fee agreement for their services with Ehtibaryan, and instead orally agreed that Ehtibaryan would pay a total sum of $8,000 for their services, which included full representation including through trial. (TAC ¶18.) Plaintiffs allege Ehtibaryan paid Defendants $3,000 as a retainer for their services, with a balance due of $5,000. (TAC ¶18.) Plaintiffs allege Defendants never attempted to collect the $5,000 balance from Ehtibaryan within the statute of limitations period. (TAC ¶18.) Plaintiffs allege the oral fee agreement for $8,000 is voidable by Ehtibaryan as a result of Defendants’ failure to comply with Business and Professions Code §6148, et seq., which requires fee agreements to be in writing for fees over $1,000. (TAC ¶18.)

Plaintiffs allege Ehtibaryan’s Client Services Agreement with Defendants for the personal injury action did not provide that the $5,000 balance due from his separate criminal case would be taken out of his recovery in the personal injury action. (TAC ¶22.)

Plaintiffs allege Defendants did not disclose or advise Plaintiffs of any potential conflict(s) of interest with respect to the firm’s representation of multiple parties in the same action, and Defendants did not present or obtain Plaintiffs’ informed written consent to joint representation despite the potential for conflict(s) of interest arising from such joint representation. (TAC ¶23.)

On November 8, 2024, Defendants filed the notice of the instant demurrer. On December 12, 2024, Defendants filed the instant demurrer and motion to strike.[1] On December 26, 2024, Plaintiffs filed their oppositions.[2] Defendants filed their combined reply on January 2, 2025.

Defendants demur to Plaintiffs’ 1st, 2nd, 3rd, 4th, and 5th causes of action. Defendants demur on the basis that all of Plaintiffs’ causes of action are barred by the applicable statute of limitations. (Demurrer, pgs. 2-4; C.C.P. §430.10(e).) Defendants demur on the basis that all of Plaintiffs’ causes of action fail to state facts sufficient to constitute a cause of action against Defendants. (Demurrer, pgs. 2-4; C.C.P. §430.10(e).) Defendants demur on the basis all of Plaintiffs’ causes of action are uncertain. (Demurrer, pgs. 2-4; C.C.P. §430.10(f).) Finally, Defendants demur on the basis the 2nd, 3rd, 4th, and 5th causes of action are duplicative. (Demurrer, pgs. 2-4; Kracht v. Perrin, Gartland & Doyle (1990) 219 Cal.App.3d 1019, 1022-1023; Loube v. Loube (1998) 64 Cal.App.4th 421, 429-431; Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1135.)[3]

Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. (C.C.P. §430.41(a), emphasis added.) A declaration must be filed with a demurrer regarding the results of the meet and confer process. (C.C.P. §430.41(a)(3).)

Defendants’ counsel declares that on December 5, 2024, she called Plaintiffs’ counsel and left a voicemail, which went ignored. (Decl. of Koshkaryan ¶8.) Defendants’ counsel’s declaration is sufficient under C.C.P. §430.41(a). Accordingly, the Court will consider the instant demurrer.

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

A demurrer for uncertainty will be sustained only where the complaint is so bad that defendant cannot reasonably respond—i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

If the complaint contains enough facts to apprise defendant of the issues it is being asked to meet, failure to label each cause of action is not ground for demurrer: “Although inconvenient, annoying and inconsiderate, the lack of labels . . . does not substantially impair [defendant’s] ability to understand the complaint.” (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 n.2.)

C.C.P. §340.6 provides in part, “[a]n 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, whichever occurs first.” (C.C.P. §340.6(a), emphasis added.)

Plaintiffs allege that on June 28, 2017, they retained Defendants to represent them regarding the auto collision in a personal injury action against Commercial Waste Services Inc. and its driver, Ramon Alcantara. (TAC ¶20.) Plaintiffs allege on or about June 26, 2019, Defendants, on behalf of Plaintiffs, filed a personal injury action in Los Angeles Superior Court, which was assigned Case Number 19STCV22401, Lilit Keshishyan, et al. v. Ramon Alcantara, et al. (“Personal Injury Action”). (TAC ¶24.)

Plaintiffs allege on August 15, 2022, Plaintiff Keshishyan saw that the Court’s Register of Actions reflected a Request for Dismissal had been filed in June 2022. (TAC ¶33.) Plaintiffs allege Plaintiff Keshishyan did not understand what it meant that a Request for Dismissal had been filed in the case, and immediately texted Defendant Karapetian and referenced the dismissal and asked for an update on the case. (TAC ¶33.) Plaintiffs allege Defendant Karapetian replied, indicating disbursement is not finalized, that she had arrived back in the country on August 9, 2022, that she had caught Covid, and explained she would call Plaintiffs “as soon as everything is finalized,” although Defendant Karapetian did not explain the status or what she meant by “everything” or what was actually being “finalized.” (TAC ¶33.) Plaintiffs allege she also did not explain what it meant that a Request for Dismissal had been filed. (TAC ¶33.)

Plaintiffs allege during the meeting at Defendants’ office on August 23, 2022, Defendant Karapetian finally disclosed that she had settled Plaintiffs’ personal injury action for $80,000.00 on or around June 15, 2022. (TAC ¶36.) Plaintiffs allege she also informed Plaintiffs that she had signed the written release agreement memorializing the terms of the settlement on behalf of Plaintiffs and confirmed that the Request for Dismissal filed in June 2022 had been filed “with prejudice” and therefore had fully and completely disposed of the Personal Injury Action. (TAC ¶36.)

The one-year limitations period for professional negligence, at a minimum, was triggered on August 15, 2022, by Plaintiffs’ discovery of the facts constituting the alleged act or omission, i.e., the filing of the request for dismissal without their knowledge or consent. The one-year limitations period is triggered by Plaintiffs’ discovery of the facts constituting the alleged act or omission, not “by his discovery that such facts constitute professional negligence, i.e. by discovery that a particular legal theory is applicable based on the known facts.” (Peregrine Funding, Inc. v. Sheppard Mullin (2005) 133 Cal.App.4th 658, 684; see Laird v. Blacker (1992) 2 Cal.4th 606, 609 [holding C.C.P. §340.6(a)’s one-year-from-discovery limitation period commences when he or she suffers an adverse judgment or dismissal in the underlying action].) Defendants filed their original complaint on August 22, 2023, after the one-year statute had expired on August 15, 2023.

Plaintiffs’ 1st, 2nd, 3rd, and 4th causes of action are also subject to a one-year statute of limitations. (Stoll v. Superior Court (1992) 9 Cal.App.4th 1362, 1363 [“…we hold that the statute of limitations within which a client must commence an action against an attorney on a claim for legal malpractice or breach of a fiduciary duty is identical”]; Austin v. Medicis (2018) 21 Cal.App.5th 577, 587 [stating breach of contract and constructive fraud claims are governed by statute of limitations for attorney malpractice]; Foxen v. Carpenter (2016) 6 Cal.App.5th 284.)

The Court views the SAC as alleging at least two distinct wrongful acts by Defendants: (1) causing Plaintiffs’ suit against Commercial Waste Services Inc. and its driver, Ramon Alcantara, to be dismissed without Plaintiffs’ consent; and (2) not dispersing the settlement pursuant to the settlement terms.

The Court agrees that the one-year statute of limitations as to the first act ran on August 15, 2023, when Plaintiffs discovered that the matter had been dismissed. As to the second act, however, the Court finds that the statute for that did not run until August 23, 2023, such that Plaintiffs’ present action would be timely filed.

The Court finds that the SAC does not adequately distinguish between these two acts, rendering it uncertain. The defect identified in the instant demurrer is the same as presented in the last demurrer to the SAC. However, “a general demurrer does not lie to only part of a cause of action. If there are sufficient allegations to entitle plaintiff to relief, other allegations cannot be challenged by general demurrer.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167, disapproved on other grounds by Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 948 n.12).) It is not necessary that the cause of action be the one intended by plaintiff. The test is whether the complaint states any valid claim entitling plaintiff to relief. Thus, plaintiff may be mistaken as to the nature of the case, or the legal theory on which plaintiff can prevail. But if the essential facts of some valid cause of action are alleged, the complaint is good against a general demurrer. (Quelimane Co., Inc. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38-39; New Livable California v. Association of Bay Area Governments (2020) 59 Cal.App.5th 709, 714-715; Adelman v. Associated International Insurance Co. (2001) 90 Cal.App.4th 352, 359; see Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 998 [stating general demurrer may be upheld “only if the complaint fails to state a cause of action under any possible legal theory” (emphasis added)].)

Because Plaintiff alleges sufficient causes of action pertaining to Defendants not dispersing the settlement pursuant to the settlement terms, a demurrer is not the proper mechanism to attack the pleadings; rather, a motion to strike is more appropriate.

“The elements of a cause of action in tort for professional negligence are (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional’s negligence.” (Budd v. Nixen (1971) 6 Cal.3d 195, 200.)

“In addressing breach of duty, ‘the crucial inquiry is whether [the attorney’s] advice was so legally deficient when it was given that he [or she] may be found to have failed to use “such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake.”’” (Blanks v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336, 357, internal citations omitted.)

The plaintiff must prove that but for the attorney’s negligent acts or omissions, the plaintiff would have obtained a more favorable result. (Viner v. Sweet (2003) 30 Cal.4th 1232, 1244.)

“‘[T]he requirement that the plaintiff prove causation should not be confused with the method or means of doing so. Phrases such as “trial within a trial,” “case within a case,” . . . and “better deal” scenario describe methods of proving causation, not the causation requirement itself or the test for determining whether causation has been established.’” (Knutson v. Foster (2018) 25 Cal.App.5th 1075, 1091, internal citations omitted.)

legal malpractice ‘is the difference between what was recovered and what would have been recovered, but for the attorney’s wrongful act or omission.’” (Mosier v. Southern California Physicians Insurance Exchange (1998) 63 Cal.App.4th 1022, 1049-1050.)

Plaintiffs allege that on June 28, 2017, Plaintiffs, and each of them, retained Defendants as their attorney and legal counsel in connection with the preserving and prosecuting of Plaintiffs’ claims for money damages and other relief in a personal injury action which was ultimately filed on June 26, 2019. (TAC ¶47.)

Plaintiffs allege Defendants owed Plaintiffs a duty of care including the duty to employ at least such skill, prudence, and diligence that attorneys of ordinary skill and capacity need, commonly possess, and exercise in the performance of the tasks which they undertake, and to represent and protect their client’s interests in the conduct of such representation. (TAC ¶48.)

Plaintiffs allege Defendants breached their applicable standards of care and failed to exercise ordinary and reasonable skill, prudence, zeal, care and diligence in undertaking to perform such legal services for Plaintiffs, and negligently and carelessly breached their duties which Defendants owed to Plaintiffs by, inter-alia: (a) Engaging in self-dealing and charging illegal and/or unconscionable fees; (b) Breaching the ethical duties of good faith, loyalty and fidelity; (c) Misappropriation of Plaintiff’s settlement funds; (d) Acquiring a pecuniary interest adverse to Plaintiffs without satisfying the requirements of Cal. R. Prof. Conduct 1.8.1; (e) Failing to communicate including but not limited to failure to communicate all (or any) settlement offers to Plaintiffs, and each of them; (f) Failing to obtain Plaintiffs’ agreement to settlement amounts and terms negotiated on behalf of Plaintiffs, and each of them; (g) Signing the settlement agreement(s) and release on behalf of, and without authorization of Plaintiffs, and each of them; (h) Wrongfully withholding settlement funds that should have been distributed to Plaintiffs, all as further pled hereafter; and (i) Forging a promissory note. (TAC ¶51.)

Plaintiffs allege as a proximate result of Defendants’ acts and omissions and malpractice, as aforesaid, Plaintiffs suffered injuries and damages in amount(s) subject to proof at trial, for inter-alia being compelled to enter into an unauthorized settlement of the underlying personal injury action and unauthorized manner of, commingling of, and disbursement of settlement funds. (TAC ¶52.)

Plaintiffs allege their economic damages in amount(s) subject to proof at trial, are calculated as follows: (1) For Plaintiff Keshishyan, her total recovery was $45,000, from which attorney’s fees of 40% were $18,000, litigation costs and associated liens were resolved with a balance due of $2,000; therefore, Plaintiff Keshishyan should have received $25,000. After the payment $15,000 and Plaintiff Keshishyan’s request that the remaining disputed amounts be held in trust, she is currently owed a total of $10,000 by Defendants for the settlement in her personal injury case; (2) for Plaintiff Ehtibaryan, his total recovery was $35,000, from which attorney’s fees of 40% were $14,000, litigation costs and associated liens were resolved with a balance due of $1,600; therefore, Plaintiff Ehtibaryan should have received $19,400. Plaintiff Ehtibaryan was paid $0 from the settlement proceeds, so Defendants owe him a total of $19,400 for the settlement of his personal injury case. (TAC ¶53.)

Plaintiffs fail to sufficiently allege a cause of action for legal malpractice arising from Defendants’ failure to disburse settlement funds. Plaintiffs fail to allege a proximate causal connection between the negligent conduct and the resulting injury. (See Viner v. Sweet (2003) 30 Cal.4th pg. 1244 [“The plaintiff must prove that but for the attorney’s negligent acts or omissions, the plaintiff would have obtained a more favorable result.”], emphasis added.)

Accordingly, Defendants’ demurrer to the 1st cause of action is sustained without leave to amend.

Breach of Fiduciary Duty, Fraud and Deceit, Breach of Contract, & Violation of Penal Code 496 (2nd, 3rd, 4th, & 5th COAs)

Any attempt to clone a legal malpractice claim in order to multiply remedies is rejected. Rather, such a claim sets forth a single cause of action for professional malpractice. (Kracht v. Perrin, Gartland & Doyle (1990) 219 Cal.App.3d 1019, 1022-1023; Loube v. Loube (1998) 64 Cal.App.4th 421, 429-431; Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1135.)

In Loube v. Loube, the legal malpractice claim was stated in four purportedly separate causes of action for “professional negligence, constructive fraud, breach of fiduciary duty and breach of contract.” (Loube, 64 Cal.App.4th at pg. 425.) Despite the multiple causes of action alleged, the Loube Court held that there existed a single cause of action sounding in professional malpractice. (Id. at pg. 430 [“Here, although the parties had a contractual relationship, and appellant’s claim for legal negligence arose from the relationship between them, which relationship was founded on a contract, the cause of action sounded in tort and was no more ‘on the contract’ than a claim for breach of fiduciary duty or for fraud involving a contract.”].)

Here, Plaintiffs’ causes of action for breach of fiduciary duty, fraud and deceit, breach of contract, and violation of Penal Code §496 are duplicative of the cause of action for legal malpractice. (Award Metals, Inc., 228 Cal.App.3d at pg. 1135.) Therefore, Defendants’ demurrer to the 2nd, 3rd, 4th, and 5th causes of action are sustained without leave to amend.

Defendants’ demurrer to Plaintiffs’ TAC is sustained without leave to amend in the 2nd, 3rd, 4th, and 5th causes of action.

In light of the Court’s ruling on the demurrer, Defendants’ motion to strike is denied as moot.

[1] The Court notes Defendants filed two demurrers on December 12, 2024: the first at 4:24 PM and the second at 4:33 PM. The Court notes Defendants did not file a notice of errata concerning the duplicative filings.

[2] The Court notes Plaintiff’s oppositions are labeled on the docket as “Memorandum of Points & Authorities” rather than indicating they are oppositions to the demurrer and motion to strike, respectively. In the future, both parties must properly identify the nature of the filings on the docket to avoid wasting this Court’s judicial resources.

[3] The Court notes Defendants’ demurrer includes multiple citation errors, such as leaving out the partial name of a case or omitting a portion of the reporter issue. (See, e.g., Demurrer, pg. 9 at line 15; page 15 at line 8.) Defendants’ counsel is strongly encouraged to proofread their papers before filing with this Court.