Judge: Douglas W. Stern, Case: 22STCV23696, Date: 2023-01-30 Tentative Ruling
Case Number: 22STCV23696 Hearing Date: January 30, 2023 Dept: 68
Law
Offices of L.A. Law Inc. v. Shahrzad Shahili, Case No 22STCV23696
MOTION: Demurrer to Cross-Complaint
I. BACKGROUND
Plaintiff L.A. Law
filed its complaint on July 21, 2022, alleging five causes of action against Defendant
Shahili for (1) breach of contract, (2) quantum meruit for services rendered,
(3) account stated, (4) book account, and (5) fraud. These causes of action
arise out of Shahili’s alleged breach of a retainer agreement with Plaintiff’s
law offices for failure and refusal to pay outstanding legal services fees and
costs. (Comp., at p. 2.)
On October 18, 2022, Defendant/Cross-Complainant Shahili filed
a Cross-Complaint against Plaintiff and the attorneys who represented her in
the underlying divorce proceeding. In the Cross-Complaint, Shahili alleged six
causes of action against Cross-Defendants L.A. Law, F. Bari Nejadpour and Susan
Winchester for (1) professional negligence legal malpractice; (2) breach of
fiduciary duty; (3) fraud and deceit; (4) breach of contract; (5) intentional
infliction of emotional distress; and (6) negligent infliction of emotional
distress. These causes of action all arise out of the attorney-client relationship
that Shahili had with Cross-Defendants. (Cross-Comp., at p. 2.)
Cross-Defendants filed this Demurrer to the
Cross-Complaint on December 30, 2022. Cross-Complainant filed her opposition on
January 10, 2023. Cross-Defendants filed their reply on January 17, 2023.
Request for Judicial Notice: Cross-Defendants have
requested that the Court take judicial notice of Shahili’s Substitution of
Attorney form that was filed in BD654597, which was the case in which
Cross-Defendants represented Shahili, and the docket for that case. The Court
takes judicial notice of this document and the docket. This Court record
reveals that Shahili substituted in new legal counsel in her divorce case on
July 14, 2020.
II. ANALYSIS
A. The Demurrer
As a general matter, in a demurrer
proceeding, the defects must be apparent on the face of the pleading or via
proper judicial notice. (Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer
tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As
such, the court assumes the truth of the complaint’s properly pleaded or
implied factual allegations. (Id.)
The only issue a demurrer is concerned with is whether the complaint, as it
stands, states a cause of action. (Hahn
v. Mirda (2007) 147 Cal.App.4th 740,
747.)
Where a demurrer is sustained, leave to amend
must be allowed where there is a reasonable possibility of successful
amendment. (Goodman v. Kennedy (1976)
18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a
pleading can be amended successfully. (Id.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
1. First, Second, Fourth, Fifth, and Sixth Causes of Action
Cross-Defendants demurrer to the entire complaint on the
basis that the one-year statute of limitations set forth in C.C.P. § 340.6 has passed for an action against an attorney
for a wrongful act or omission.
C.C.P. § 340.6(a) states that:
“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.” (Bold added.)
… the time for
commencement of legal action shall not 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 wrongful act or omission occurred.
(3) The attorney
willfully conceals the facts constituting the wrongful act or omission when
those facts are known to the attorney, except that this subdivision shall toll
only the four-year limitation.”
Pursuant to Lee v. Hanley (2015) 61 Cal.4th 1225,
1229, the limitations period of “section 340.6(a) applies to a claim when the
merits of the claim will necessarily depend on proof that an attorney violated
a professional obligation – that is, an obligation the attorney has by virtue
of being an attorney – in the course of providing professional services.” (Lee,
61 Cal.4th at 1229.)
The Lee Court
went on to hold:
“[S]ection
340.6(a)’s time bar applies to claims whose merits necessarily depend on proof
that an attorney violated a professional obligation in the course of providing
professional services. In this context, a ‘professional obligation’ is an
obligation that an attorney has by virtue of being an attorney, such as
fiduciary obligations, the obligation to perform competently, the obligation to
perform the services contemplated in a legal services contract into which an
attorney has entered, and the obligations embodied in the Rules of Professional
Conduct.
(Id. at
1236-37.)
Essentially, this
means that any claims stemming from the same events as a legal malpractice
claim, except for fraud, which is excluded by CCP § 340.6(a), would also be
time barred by the one-year statute of limitations, unless the tolling
provision applies.
Cross-Defendants represented Shahili until July 14, 2020,
when Shahili discharged Cross-Defendants via a substitution of counsel form.
(Demurrer at p. 7; RJN.) Cross-Defendants argue that July 14, 2020, is the date
when the statute of limitations began running, as that is when their
representation of Shahili ended and when Shahili discovered, or with reasonable
diligence should have discovered, the facts constituting the wrongful act or
omission.
Based on the allegations of the Cross-Complaint that set
forth the alleged wrongful acts, they clearly would have been known by Shahili
no later than the time that Cross-Defendants ceased their representation of Shahili.
(Cross-Complaint ¶ 12, 13.) Since those facts were known to Shahili by the
time she ceased being represented by Plaintiff, the one year period has
run. Shahili would have needed to file
an action for the attorney’s wrongful act or omission by July 14, 2021, which Shahili
did not do. Therefore, the claims
(except fraud) are time barred based on the present pleading.
However, given the rather vague allegations of the
Cross-Complaint, it is not possible based solely on the pleading to know if Shahili
had suffered delayed damages so that the limitations period is tolled. The Court does not assume that a basis for
tolling exists. It must be pleaded
factually, not with conclusory allegations.
There are no meaningful allegations regarding the alleged damages or
when they were suffered, other than a conclusory statement that Shahili
suffered various unspecified damages. Because of this ambiguity, the Court cannot
conclude that the damages she is claiming might not have arisen within the
limitation period. But these vague allegations
of unspecified damages shall not permit an otherwise time barred claim to
continue, since it is Cross-Complainants obligation to allege a basis for
tolling. The vagueness might be remedied
by Cross-Complainant filing a First Amended Cross-Complaint.
Additionally, based on the Lee Court decision and
the text of CCP § 340.6(a), the one-year statute of limitations would apply to
all of Shahili’s causes of action except for the third cause of action for
fraud and deceit.
Accordingly, because Shahili’s First, Second, Fourth,
Fifth, and Sixth Causes of Action defective, as they fail to plead facts that
would give rise to a tolling of the one-year limitation period, Cross-Defendants’
Demurrer as to those causes of action is sustained with leave to amend. Cross-Complainant is granted 20 days leave to
amend.
Because the Court is sustaining the demurrer on the basis
of C.C.P. § 340.6, it is not at this time addressing the other
claimed deficiencies in the Cross-Complaint.
However, they appear largely meritorious. For example, Shahili alleges the existence of
a written agreement, but does not attach it (contrary to the allegation in
paragraph 5) an does not plead the material provisions of the contract.
2. Third Cause of
Action for Fraud and Deceit
Because Shahili’s Third Cause of Action for Fraud and
Deceit is not time barred by the one-year statute of limitations, it is
necessary to address it separately. Cross-Defendants demur to this cause of
action on the basis that it does not plead facts sufficient to constitute a
cause of action for fraud and deceit.
The elements of fraud are: (1) misrepresentation, (2)
knowledge of its falsity, (3) intent to defraud, (4) justifiable reliance, and
(5) resulting damage. (See Gil v. Bank of America, Nat. Ass’n (2006) 138
Cal.App.4th 1371, 1381; Barbara A. v. John G. (1983) 145 Cal.3d 369,
376.) A fraud cause of action requires all elements of the cause of action be
pleaded with particularity. “This particularity requirement necessitates
pleading facts which show how, when, where, to whom, and by what means the
representations were tendered.” (See Lazar v. Superior Court (1996) 12
Cal.4th 631, 645 (citations omitted).)
Shahili’s Cross-Complaint is lacking in that she has not
pled the requisite intent element as to each Cross-Defendant. She has also failed
to plead with specificity the how, where, and by what means the representations
were tendered to her. (Cross-Comp. at p. 2.)
Fraud must be pleaded with specificity. Cross-Complainant should be mindful of the
fact that the alleged fraudulent conduct must be causally related to the
claimed harm. As an example, it is most
unclear how Shahili would have suffered $1,000,000 damages should she prove
that there was a “misrepresentation” that she was to receive monthly billing
statements.
Cross-Defendants demur as to Shahili’s Third Cause of
Action is sustained with 30 days leave to amend.