Judge: Douglas W. Stern, Case: 22STCV23696, Date: 2023-09-21 Tentative Ruling
Case Number: 22STCV23696 Hearing Date: January 12, 2024 Dept: 68
Law Offices of L.A. Law
Inc., vs. Shahrzad Shahili, 22STCV23696
MOVING PARTIES: Plaintiff/Cross-Defendants
L.A. Law Inc. and F. Bari Nejadpour (Cross-Defendants)
RESPONDING PARTY: Defendant/Cross-Complainant
Shahrzad Shahili
Demurrer to Third Amended Cross-Complaint
I.
BACKGROUND
Cross-Defendant L.A. Law filed its complaint on July
21, 2022, alleging five causes of action against 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 Cross-Defendant’s law offices for
failure and refusal to pay outstanding legal services fees and costs.
The current iteration of Shahili’s
is Cross-Complaint is her Third Amended Cross-Complaint (TACC), filed on November
20, 2023. In the TACC, Shahili alleges four causes of action against
Cross-Defendants L.A. Law and F. Bari Nejadpour for (1) professional negligence
legal malpractice; (2) breach of fiduciary duty; (3) fraud and deceit, practice
& without license; and (4) breach of contract. These causes of action all
arise out of the attorney-client relationship that Shahili had with
Cross-Defendants. (TACC, ¶ 8.) Shahili alleges in her TACC that Nejadpour made
a number of misrepresentations to her at the beginning of their attorney-client
relationship, including what the cost of the litigation would be, what
Nejadpour could get for her in the case, and who would be representing her
during the pendency of the case. She also pleads that she was unhappy with the
settlement that Cross-Defendants obtained for her and had to retain other
counsel.
Cross-Defendants filed this demurrer
on December 13, 2023. Shahili opposes.
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. Entire
Complaint
Cross-Defendants demurrer to the
entire complaint on the basis that the one-year statute of limitations has
passed for an action against an attorney for a wrongful act or omission.
The one year statute of limitations for
a legal malpractice action commences once “reasonable diligence should have
discovered, the facts constituting a wrongful act or omission.” (Village
Nurseries v. Greenbaum (2002) 101 Cal.App.4th 26, 40.)
CCP § 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.
… 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 argue that Shahili should have
known of their alleged wrongdoing, at the latest, when she hired a new
attorney, Alex Khaefi, who filed a substitution of attorney in the underlying
case on August 6, 2020. (RJN, ¶ 5; Silverstein Decl., Ex. B.) Shahili hired
Khaefi to “dispute Nejadpour’s false claim,” and he “disputed distribution of
the funds to Nejadpour.” (TACC, ¶ 26.) If Shahili hired Khaefi in 2020 to
dispute distribution of billing funds to Nejadpour, then she was on notice of
at least some form of wrongdoing as early as 2020, or, through the use of
reasonable diligence, should have discovered the wrongful act or omission in
2020. Plaintiff’s Complaint was not filed until 2022. This was well outside of
the one-year statute of limitations. Shahili’s complaint alleges that she did
not discover any of the wrongdoing constituting her causes of action until
after Cross-Defendants filed their complaint. (TACC, ¶ 26.) However, this conflicts
with her allegations about hiring Khaefi to dispute the distribution of funds
to Nejadpour.
Also, Shahili claims that she was told that she
would get at least $1 million, but claims that Cross Defendants forced her
(while they were representing her) to agree to substantially less as a
settlement. No amount of artful pleading
explains away the fact that Shahili knew at that point in time that she was not
getting $1 million.
The amendments that Shahili made to her
cross-complaint did not address these discrepancies in her allegations. 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 Cross-Complainant’s causes of
action, except for the third cause of action for fraud, because the other
causes of action are derivative of her cause of action for professional
negligence legal malpractice.
The demurrer is sustained without leave to amend for
Plaintiff’s First, Second, and Fourth Causes of Action because they are
time-barred.
2. Third
Cause of Action for Fraud and Deceit, Practice & Without License
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 Court previously overruled
Cross-Defendants’ demurrer to this cause of action. The Court reaffirms that
ruling.
III. ORDER
1.
Cross-Defendants’ Demurrer to Shahili’s First,
Second, and Fourth Causes of action on the statute of limitations grounds is
sustained without leave to amend.
2.
Cross-Defendants’ Demurrer to Shahili’s Third
Cause of Action for Fraud and Deceit is overruled.