Judge: Frank M. Tavelman, Case: 23BBCV01287, Date: 2023-12-29 Tentative Ruling

Case Number: 23BBCV01287    Hearing Date: December 29, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

DEMURRER

MP:     Dennis P. Block, Esq. and Dennis P. Block & Associates (Defendants)

RP:     Tarik Adlai and Tracey Adlai (Plaintiffs)

NOTICE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS:

Tarik Adlai (“Tarik”), individually and as Administrator of the Estate of Richard Adlai, and Tracey Adlai (“Tracey”) (collectively “Plaintiffs”) brings this action against Dennis P. Block, Esq. and Dennis P. Block &Associates (collectively “Defendants”). Plaintiffs allege that Defendants were negligent in providing legal services in connection with an unlawful detainer matter, resulting in prolonged legal action and exorbitant legal fees. Plaintiffs allege they retained defendants to file an unlawful detainer agreement against Sabdah Adlai (“Sabdah”) from the apartment owned by Tracey’s father, Richard Adlai. Plaintiffs Complaint contains causes of action for (1) breach of fiduciary duty and (2) professional negligence (negligent handling of legal matter).

Defendants now demur to each cause of action on various grounds. Defendants argue that the entire Complaint is barred by the statute of limitations and that Tracey has no standing to bring either cause of action. Plaintiffs oppose the demurrer and Defendants reply.

ANALYSIS:

I.                    LEGAL STANDARDS

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (C.C.P. § 430.30(a); Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The only issue involved in a demurrer hearing is whether the complaint states a cause of action. (Id.)

A demurrer assumes the truth of all factual, material allegations properly pled in the challenged pleading. (Blank v. Kirwan, supra, 39 Cal. 3d at p. 318.) No matter how unlikely or improbable, the plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.  App. 3d 593, 604.) But this does not include contentions; deductions; conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.  (Blank, supra, 39 Cal. 3d at 318.)

Pursuant to Code of Civil Procedure (“C.C.P.”) §§ 430.10(e) and (f), the party against whom a complaint has been filed may demur to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action, or that the pleading is uncertain, ambiguous and/or unintelligible. It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1082.)

II.                 MEET & CONFER

C.C.P. §§ 430.41(a) and 435.5(a) requires that the moving party meet and confer with the party who filed the pleading that is subject to the demurrer and/or motion to strike. Upon review the Court finds the meet and confer requirements were met. (Starre Decl.)

III.              MERITS

Relevant Allegations

Plaintiffs’ legal malpractice claim primarily concerns the alleged failure of Defendants to communicate a settlement offer dated January 26, 2021, attached as Exhibit C to the Complaint. This letter relayed that Sabah was willing to voluntarily vacate the premises in exchange for $21,200. (Compl. Exh. C.) Plaintiffs allege that this settlement offer was never relayed to them. (Compl. ¶ 14.) Plaintiffs allege they did not learn of this settlement offer until “nearly a year later” after new counsel received Defendants’ case files. (Id.) Plaintiffs state Sabah thereafter enlisted new counsel who began a prolonged litigation campaign which increased Plaintiffs’ costs in the matter significantly. (Compl. ¶ 17.)

Statute of Limitations

Defendants argue that entirety of Plaintiffs complaint is barred as untimely by the statute of limitations (“SOL”).

The SOL on an action for legal malpractice is generally within a year after 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 wrongful act or omission, whichever occurs first. (C.C.P. § 340.6(a).) However, the SOL may be tolled if the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred. (C.C.P. § 340.6(a)(2).)

Defendants argue that because the Complaint states Plaintiffs learned of the settlement offer “nearly a year later” in January of 2022, the SOL began running at that point. Defendants argue that Plaintiff’s filing of this complaint on June 8, 2023 would thus be untimely.

Plaintiffs argue that the SOL did not begin to run on the matter until June 14, 2022, as Tarik remained represented by Defendants until June 14, 2022. (Compl. ¶ 21.) Plaintiffs argue their June 8, 2023 filing of this action would therefore be timely.

The Court agrees that the SOL in this case would be tolled until Defendants representation of Plaintiffs ceased. Regardless of Plaintiffs discovering the undisclosed settlement offer, it is clear Plaintiffs remained a client of Defendants past that discovery and thus triggers C.C.P. § 340.6(a)(2).

Defendants further argue that even if the SOL was tolled until their representation ceased, the Complaint remained untimely. Defendants state in their demurrer that the Substitution of Attorney filed with the court in the unlawful detainer case was signed on June 8, 2022 by the Plaintiff and the attorneys, both old and new. Defendants argue that because C.C.P. § 340.6 requires the action to be filed “within one year” of tolling, the last day for timely filing would have been June 7, 2023. 

Defendants encourage the Court to take judicial notice of the Substitution of Attorney, however they do not attach the substitution of Attorney to their demurrer and have filed no request for judicial notice. As such, the Court denies Defendants’ request.

The Court finds Defendants arguments unpersuasive. A demurrer based on SOL will not lie where the action may be, but is not necessarily, barred. (Boy Scouts of America Nat. Foundation v. Superior Court (2012) 206 Cal.App.4th 428, 438). “In order for the bar to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint.” (Id. at 438-439).

An attorney's representation of a client ordinarily ends, and would terminate tolling of the legal malpractice statute of limitations under the continuous representation exception, when the client discharges the attorney or consents to a withdrawal, the court consents to the attorney's withdrawal, or upon completion of the tasks for which the client retained the attorney. (GoTek Energy, Inc. v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1246.)

Here, a defect in SOL is not present on the face of Plaintiffs’ Complaint. The Complaint states that Tarik remained a client of Defendants until June 8, 2023 and the action was filed within one year after. The Complaint does not attest to what date Plaintiffs signed the substitution of the attorney or any other instance where Plaintiffs indicated to Defendants, they wished to discontinue representation.  Defendants’ allusion to the date of their signature on the Substitution of Attorney, June 8, 2022, is irrelevant to determining this demurrer. It may be that Plaintiffs’ action is barred by the statute of limitations, but such a determination requires consideration of evidence more appropriate on a motion for summary judgment than on demurrer.

Tracey Adlai

Defendants demurrer to each cause of action brought by Tracey Adlai, arguing that Tracey was never a party to the agreement for legal services (“Retainer Agreement”). Defendants argue that Tracey Adlai’s signature is not present on the Retainer Agreement attached to the Complaint at Exhibit 2. Defendants maintain that the Retainer Agreement was with Tarik and not Tracey. As such, Defendants argue Tracey was not in privity of contract with Defendants and cannot maintain either cause of action.

A review of the Retainer Agreement, attached as Exhibit 2, reveals that it is only signed by Tarik. However, Exhibit 2 also contains correspondence from Defendants to both Plaintiffs regarding the unlawful detainer action. This correspondence is addressed as follows:

Tarik Adlai, Administrator Of The Estate Of Richard Adlai

Tracey Adlai

P.O. Box 2029

Toluca Lake, CA 91610

Additionally, the Complaint states that Plaintiffs were never provided with a fully executed copy of the retainer agreement and are not aware if it was countersigned. (Compl. ¶ 9.)

“Where a complaint is based on a written contract which it sets out in full, a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible.” (Aragon–Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239.) “[W]here an ambiguous contract is the basis of an action, it is proper, if not essential, for a plaintiff to allege its own construction of the agreement. So long as the pleading does not place a clearly erroneous construction upon the provisions of the contract, in passing upon the sufficiency of the complaint, we must accept as correct plaintiff's allegations as to the meaning of the agreement.” (Id. [internal quotation marks omitted].)

Here, Plaintiffs allege that the Retainer Agreement was intended to be between Tracey, Tarik, and Defendants. The Complaint states “Plaintiffs retained Defendants to represent [Tarik] in prosecuting an unlawful detainer action against Sabdah.” (Compl. ¶ 9.) This statement is unclear as to who exactly was party to the contract. Plaintiffs’ allegation seems to indicate they both understood they were contracting for legal services, while in the same breadth alleging that Tarik would be the Plaintiff in the unlawful detainer action. The Retainer Agreement is similarly unclear. The Retainer Agreement is signed by Tarik only, but it was clearly addressed to both Tarik and Tracey.

Plaintiffs argue that even if Tracey was not in privity of contract, Defendants still owed a duty of care to Tracey. Plaintiffs state that because the purpose of the unlawful detainer litigation was to benefit Tracey, Defendants owed a duty to her regardless of her status as a client.

“A lawyer can sometimes owe a duty to third parties who are the intended beneficiaries of the lawyer's legal work for the client, such as when the lawyer is retained by the client to draft a will, a testamentary trust, or an inter vivos trust or gift.” (Gordon v. Ervin Cohen & Jessup LLP (2023) 88 Cal.App.5th 543, 555.) “The California courts have uniformly settled upon the following rule: A lawyer has a duty to a third party nonclient only if the client's intent is to benefit that third party (in the way the third party asserts in their malpractice claim) is “clear,” “certain” and “undisputed.” (Id. at 556.) “In other words, courts will recognize a duty to a nonclient plaintiff—and thereby allow that plaintiff to sue the lawyer for legal malpractice—only when the plaintiff, as a threshold matter, establishes that the client, in a clear, certain and undisputed manner, told the lawyer, ‘Do X’” (Id.)

Defendants’ demurrer states “Tracey Adlai acted as the conduit between attorney Block and the client Ta[r]ik Adlai, only Ta[r]ik Adlai signed the retainer agreement.” (Dem. p. 8.) Defendant states that Tracey may have been a beneficiary of the estate, but she had no relationship to Block. (Id.)

The Court finds that Tracey’s claims are sufficient to survive demurrer. Defendants claim that Tracey was not an intended client does not appear on the face of the pleading. The FAC alleges that Tracey was a client of Defendants. While the Retainer Agreement shows only the signature of Talik, it is clear that Defendants were addressing correspondence to Tracey directly and are at least alleged to have been aware that the unlawful detainer action was to her benefit. A definitive determination of whether Tracey was a client of Defendant necessarily involves the consideration of evidence and interpretation of contract, neither of which is appropriate on demurrer. The same can be said about whether Tracey was an intended beneficiary of the legal services regardless of her status as a client.

Failure to Relay the Settlement

Defendants lastly argue that the failure to relay the settlement offer does not legally constitute a cause of action for legal malpractice.

The elements of a cause of action for legal malpractice are (1) the attorney-client relationship or other basis for duty; (2) a negligent act or omission; (3) causation; and (4) damages. (Nichols v. Keller (1993) 15 Cal. App. 4th 1672, 1682.)

Defendants argue that the January 26, 2021 letter was not a settlement offer as it only indicates Sabdah would be open to a settlement. Defendants cite to no authority that this letter does not constitute a settlement offer. The letter specifically indicated that Sabdah would be willing to settle the matter for the concrete terms of payment of $21,200. Defendants also cite to no authority that the failure to relay a settlement offer does not constitute a “negligent act or omission” for purposes of a legal malpractice claim.

In reply, Defendants change their argument and claim for the first time that the January 26^th letter was relayed to Tracey. Defendants argue that the letter attached as Exhibit 2 to the FAC shows that the Block office was in contact with Tracey, and that if the January 26^th letter was not relayed to Tarik, it was the fault of Tracey. The Court finds Defendants’ argument unpersuasive and internally inconsistent with Defendants’ initial argument. Defendants nowhere allege the January 26^th letter was sent to Tracey, nor do they attach any communication which would show that it was. Defendants provide no explanation how Tracey was supposed to relay the settlement offer to Tarik without Defendants informing her of it in the first place. Further, even if Defendants had sufficient evidence they informed Tracey of the settlement offer, such evidence would be inappropriate to consider on demurrer.

Conclusion

The Court overrules Defendants’ demurrer on grounds of statute of limitations. While the cause of action may ultimately be barred by the SOL, such a determination requires the consideration of evidence inappropriate on demurrer. The same can be said of Defendants’ demurrer on grounds that Tracey was not a client of Defendants. Further, Plaintiffs have alleged Defendants failed to relay a settlement offer to them which resulted in protracted and expensive litigation that could have otherwise been avoided. The Court finds these claims sufficient to survive Defendants’ demurrer. Accordingly, the demurer to each cause of action is OVERRULED.

RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Dennis P. Block, Esq. and Dennis P. Block & Associates’ Demurrer came on regularly for hearing on December 29, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

DEFENDANTS’ DEMURRER TO EACH CAUSE OF ACTION IS OVERRULED.

RESPONSIVE PLEADINGS ARE DUE WITHIN 20 CALENDAR DAYS.

CASE MANAGEMENT CONFERENCE IS CONTINUED TO MARCH 28, 2024 AT 9:00 A.M.

UNLESS ALL PARTIES WAIVE NOTICE, PLAINTIFFS TO GIVE NOTICE.

IT IS SO ORDERED.

DATE:  December 29, 2023

_______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles