Judge Elaine W. Mandel, Case Number: 24SMCV01109, Date: 2024-06-25 Tentative Ruling

Judge: Elaine W. Mandel, Case: 24SMCV01109, Date: 2024-06-25 Tentative Ruling

Case Number: 24SMCV01109 Hearing Date: June 25, 2024 Dept: P

Tentative Ruling

Amin v. Law Offices of Ramin Azadegan, APC, et al., Case No. 24SMCV01109

Hearing date June 25, 2024

Defendant Fischer, Zisblatt & Kiss, LLP’s Demurrer

Defendant Law Offices of Ramin Azadegan, APC’s Demurrer

In this legal malpractice case, plaintiff sued his former lawyers defendants Law Offices of Ramin Azadegan (Azadegan) and Fischer Zisblatt & Kiss (Fischer), who represented plaintiff in a breach of guaranty suit against plaintiff and his former business partner Emein (Underlying Action).

In plaintiff’s cross-complaint for indemnity against Emein in the Underlying Action, Azadegan failed to allege a specific sum of damages, though Code of Civil Procedure section 425.10(a)(2) requires in a cross-complaint “the amount demanded shall be stated.” Plaintiff substituted in Fischer as counsel; Fisher did not amend the cross-complaint to allege a specific sum. Nevertheless, on September 15, 2009 the trial court entered default judgment in plaintiff’s favor for $2,624,084 against Emein. From 2009-22, plaintiff sought unsuccessfully to enforce this default judgment.

On May 4, 2022 Emein moved unsuccessfully in the trial court to vacate the default judgment, arguing the cross-complaint failed to plead a specific amount of damages. Emein’s appeal was successful, and on December 5, 2023 the court reversed, finding the “cross-complaint did not include a specific request for damages, so the trial court was without jurisdiction to enter the default judgment in favor of Amin.” Bucknell Decl. Exh. 4.

Plaintiff alleges damages as a result of defendants’ failure to allege a specific sum in the cross-complaint in the Underlying Action. Azadegan and Fischer each demur, both arguing the claim is time barred per Code Civ. Proc. §340.6(a). As defendant law firm file substantially similar demurrers, they are addressed collectively.

Request for Judicial Notice

Defendants Azadegan and Fisher request judicial notice of various court records (Bucknell Decl., Exhs. 1-5; Fisher, Exhs. A-I). GRANTED per Evid. Code §§452-453. The court takes judicial notice only as to the existence and authenticity of such documents; it does not take judicial notice of the truth of factual matters asserted. Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.

Demurrer

In reviewing the legal sufficiency of a complaint on demurrer, a court will treat the demurrer as admitting all material facts properly pleaded. Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank); C & H Foods Co. v. Hartford Ins. Co. (1984) 163 Cal.App.3d 1055, 1062. A “demurrer lies only for defects appearing on the face of the complaint[.]” Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601. For purposes of ruling on a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958.

A demurrer based on statute of limitations will not lie where the action may be, but is not necessarily, barred. Lee v. Hanley (2015) 61 Cal.4th 1225, 1232. For the bar to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows the action may be barred. Id. A statute of limitations does not begin to run until a cause of action accrues.

A cause of action for legal malpractice accrues when plaintiff knows, or should know, all material facts essential to show the elements of that cause of action. Lee, supra, at 1233, citing Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 190. Per Code of Civil Procedure sec. 340.6(a), the statute of limitations for legal malpractice is “one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission…”

The one-year period of section 340.6(a) “is triggered when the client discovers, or should have discovered, the facts constituting the wrongful act or omission and ‘not by his discovery that such facts constitute professional negligence . . . It is irrelevant that the plaintiff is ignorant of his legal remedy or the legal theories underlying his cause of action.’” Truong v. Glasser (2009) 181 Cal.App.4th 102, 110 [quoting Worton v. Worton (1991) 234 Cal.App.3d 1638, 1650].

Plaintiff and law firm defendants dispute when injury occurred. The demurrers argue (1) plaintiff learned of the facts constituting the alleged wrongdoing no later than when Emein’s motion to vacate was filed in the trial court on May 4, 2022, and (2) Amin’s actual injury occurred when default was entered on September 15, 2009, not when the appellate court ruled it defective on December 5, 2023.

Plaintiff argues whether he should have discovered the law firms’ negligence in drafting the cross-complaint is a question of fact, not law. "[I]n legal malpractice actions statute of limitations issues, including injury, are at base factual inquiries." Adams v. Paul (1995) 11 Cal. 4th 583, 588. Plaintiff asserts all he knew was that Emein challenged the legitimacy of the default. Plaintiff argues the trial court’s denial of the motion is further evidence he should not have been on notice of Azadegan and Fischer’s alleged negligence. Plaintiff also argues he did not sustain injury (i.e. his damages did not accrue) until the appellate court reversal on December 5, 2023.

“The question of when there has been a belated discovery of the cause of action, especially in malpractice cases, is ordinarily a question of fact. It is only where reasonable minds can draw but one conclusion from the evidence, that it becomes a matter of law.” Johnson v. Haberman & Kassoy (1988) 201 Cal.App.3d 1468, 1476; see also Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 751 [“determining when actual injury occurred is predominantly a factual inquiry”].

Whether plaintiff should have known the cross-complaint was defective as of the date of Emein’s motion is a question of fact. Emein’s filing of a motion to vacate does not establish that a wrongdoing occurred. Without actual loss or damage, there is no tort. Jackson v. Johnson (1992) 5 Cal. App. 4th 1350, 1355 (quoting Budd v. Nixen (1971) 6 Cal. 3d 195, 200)). Plaintiff’s alleged damage did not occur until the appellate court reversed the trial court’s entry of default judgment. As of date Emein’s motion to vacate was filed, May 4, 2022, the default judgment was still valid; it remained valid until the appellate court ruling on December 5, 2023.

Second, when the actual injury occurred is disputed. Defendants rely on Worton, supra, Sharon v. Porter (2019) 41 Cal.App.5th 1, and Jordache, supra, to support the argument that “actual injury” occurred upon entry of the defective default judgment on September 15, 2009.

Neel, supra, at 190 held a cause of action for attorney negligence does not accrue until the client discovers, or should have discovered, facts essential to a malpractice claim. In Budd, supra, the court held a cause of action for legal malpractice does not accrue until the client suffers damage, and determination of that date raises an issue of fact. Id. at 198. A cause of action does not accrue until the client both sustains damage and discovers (or should discover) the cause of action. Id. at 203. “The test for actual injury under section 340.6, therefore, is whether the plaintiff has sustained any damages compensable in an action, other than one for actual fraud, against an attorney for a wrongful act or omission arising in the performance of professional services.” Jordache, supra, at 751.

Because the question of when and whether injury occurred is a question of fact, all plaintiff’s allegations must be accepted as true on demurrer. For the court to resolve the statute of limitations question on demurrer, it is required to accept plaintiff’s factual allegations. That is, plaintiff discovered the alleged malpractice on December 5, 2023.

Defendants argue plaintiff suffered injury in 2009 when default judgment was entered, but admit plaintiff was unaware the default judgment was defective at that time. The parties dispute whether plaintiff knew (or should have known) of defendants’ alleged negligence when the appellate decision voided the default judgment on December 5, 2023, or when Emein filed the motion to vacate on May 4, 2022.

Plaintiff arguably suffered actual injury when the default judgment was found void by the appellate court on December 5, 2023. Based on plaintiff’s allegations, he did not know of defendants’ allegedly wrongful acts regarding the cross-complaint in the Underlying Action until the appellate court reversal.

The factual issues regarding running of the statute cannot be resolved on demurrer, where the court must accept as true all factual allegations of the complaint. OVERRULED. Defendants to answer within 10 court days.