Judge Lee W. Tsao, Case Number: 22NWCV00985, Date: 2023-08-24 Tentative Ruling

This action arises from alleged legal malpractice. On October 12, 2022, Plaintiff Maria Esther Flores Prieto (“Plaintiff”) filed a complaint against Defendants BLK Legal Support Firm, Bruce Loren Karey (“Karey”), Alexander Cotton, and Does 1 through 10, alleging causes of action for: (1) Professional Negligence (Legal Malpractice); (2) Fraud; (3) Intentional Infliction of Emotional Distress; (4) Breach of Contract; (5) Breach of Fiduciary Duties; and (6) Negligent Supervision.

Plaintiff alleges that “around January 2020, due to Defendants undue delay in preparing Plaintiff’s paperwork for her small claim, one of her vehicles was sold in an auction by the bank without her notice. Plaintiff called Defendant Cotton and informed him of the sale of her vehicle. Plaintiff was upset and confused since she didn’t understand why her vehicle was sold since she was under the impression that the small claim would have stopped the bank from taking any further action without the court’s authority. Defendant Cotton informed Plaintiff that he had not worked on her small claim and that he was unable to prepare it at the moment because her vehicle was already sold.” (Complaint, ¶ 17.)

Plaintiff further alleges that “Defendants provided Plaintiff with an altered/fraudulent document in order to silence her about her case updates and to put up a farce that they were actively working on her case when in reality they were unduly delaying it, substantially reducing her chances of winning on the merits. Moreover, Defendants did not file a small claims resulting in her losing her vehicles valued at an estimate of $22,590.00. Moreover, when the American First Credit Union Case was finally filed with the Court on April 14, 2022, Defendants failed to file a Notice of Entry of Default against American First Credit Union when sufficient time passed from the allocated time to respond.” (Id., ¶ 29.)

on the demurrer because an action was pending in Orange County “pertaining to the filing of Plaintiff’s action against America First Credit Union.” (08/24/23 Minute Order.) The Court found that Plaintiff’s claims in the instant action were partially based on “Defendants’ purported malpractice pertaining to the filing of Plaintiff’s action against America First Credit Union.” (Id.)

On December 14, 2023, Plaintiff’s counsel represented that the Orange County case has settled, the terms of the settlement agreement (which are confidential) have been satisfied, and the case has been dismissed. According to Moving Defendants’ Second Request for Judicial Notice, on November 9, 2023, a Notice of Settlement of Entire Case was filed in Plaintiff’s action against America First Credit Union in the Superior Court of California, County of Orange. (Request for Judicial Notice, Exhibit A.) A conditional settlement has been entered and a request for dismissal will be filed no later than January 9, 2024. (Id.) The notice of settlement provides that “[t]he settlement agreement conditions dismissal of this matter on the satisfactory completion of specified terms that are not to be performed within 45 days of the date of the settlement.” (Id.) The trial date in the action against America First Credit Union has been vacated and an OSC re: Dismissal in the Orange County action is scheduled for March 11, 2024 in the action against America First Credit Union. (Id., Exhibit B.) The Court ordered terms of settlement to be completed on or before January 9, 2024. (Id.)

This Orange County action has not been deemed related to this case, and based on the pleadings filed in this action, this Court is not certain of the Orange County Action’s relatedness, if any, to this subject action. Accordingly, this Court will now issue a ruling on this Demurrer on the merits.

Defendants argue that Plaintiff’s causes of action are fatally uncertain. This argument lacks merit because “[a] special demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145-146.) Moreover, demurrers for uncertainty are disfavored and will only be sustained where the pleading is so bad that the 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 Calif. Inc. (1993) 14 Cal.App.4th 612, 616.) A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Ibid.) Here, it is clear from Defendants’ other arguments that they understand what Plaintiff is at least attempting to allege, and there is no true uncertainty. The demurrer is not sustained on the basis of uncertainty.

The elements of a claim for legal malpractice are as follows: (1) the duty of a professional to use such skill, prudence, and diligence as other members of their profession commonly possess and exercise; (2) 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. (Osornio v. Weingarten (2004) 124 Cal.App.4th 304, 319.) “[A]n attorney is subject to liability for malpractice when his or her negligent investigation, advice, or conduct of the client’s affairs results in loss of a meritorious claim.” (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1092.) “While other elements of a legal malpractice claim are generally factual and thus cannot be challenged on demurrer, the existence of the attorney’s duty of care owing to the plaintiff is generally a question of law that may be addressed by demurrer.” (Id.) “Where there is no legal duty, the issue of professional negligence cannot be pled because with the absence of a breach of duty, an essential element of the cause of action for professional negligence is missing.” (Major Clients Agency v. Diemer (1998) 67 Cal.App.4th 1116, 1132.)

“The elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) its breach , and (3) damage proximately caused by that breach. [Citations Omitted.]” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1405.)

As Plaintiff’s counsel of record, Defendants owed Plaintiff a duty to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise. Plaintiff adequately alleges that Defendants breached their professional duty owed to Plaintiff by failing to advance a Notice of Default; failing to serve defendants in the underlying action within a reasonable time the complaint was filed; falsifying legal documents; and unnecessarily delaying the filing of necessary paperwork. Thus, Plaintiff alleges that she lost the opportunity to obtain a default judgment and had to “forfeit her two vehicles”. (See Complaint ¶34.)

The remaining elements of legal malpractice claims, such as breach of duty, causation, and damages are factual in nature and not the proper subject of a demurrer. Plaintiff has sufficiently alleged that Defendants breached their professional duty causing damages, but only in so far as Plaintiff’s two vehicles were repossessed and Plaintiff was deprived of the ability to obtain a default judgment. The court determines that no other damages have been adequately plead in the Complaint.

The elements of a cause of action for intentional fraud are 1) misrepresentation (false representation, concealment, or nondisclosure); 2) knowledge of falsity (scienter); 3) intent to defraud or induce reliance; 4) justifiable reliance; and 5) damages. (See Cal. Civ. Code §1709.)

Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said, or wrote, and when the representation was made. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Plaintiff’s Complaint does not meet the standard for specificity in pleading a claim for fraud. Plaintiff alleges that Defendants misrepresented that they were acting in the best interest of Plaintiff in the underlying action, when they were actually intentionally delaying Plaintiff’s underlying action and substantially reducing her chances of winning on the merits. (Complaint ¶39.) Plaintiff must specifically allege Defendants’ purported misrepresentations, with specificity. The demurrer to the second cause of action is SUSTAINED with 30 days leave to amend.

A cause of action for intentional infliction of emotional distress consists of three elements: (1) extreme and outrageous conduct by the Defendant with the intention of causing, or reckless disregard for the possibility of causing, emotional distress; (2) Plaintiff suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by Defendant’s outrageous conduct. (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050.) Outrageous conduct is defined as conduct that is “so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Id. at p. 1050-1051.)

Whether it is written, oral, or implied, the elements of a cause of action for breach of contract are as follows: (1) the existence of a contract; (2) Plaintiff’s performance or excused non-performance; (3) Defendants’ breach; and (4) resulting damage to Plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) “If an action is based on a breach of written contract, the terms must be set forth verbatim in the body of the complaint or a copy of the contract must be attached and incorporated by reference.” (Id. at 459.) Alternatively, if the claim is based on a written contract, then “a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co., (2002) 29 Cal.4th 189, 198-199.)

Here, Plaintiff alleges that the parties entered into a written agreement for legal services. (See Complaint, Ex. C.) Plaintiff has adequately alleged that Defendants breached the professional services agreement by failing to provide legal services under the contract causing damages, but only in so far as Plaintiff’s two vehicles were repossessed and Plaintiff was deprived of the ability to obtain a default judgment. The court determines that no other damages have been adequately plead in the Complaint.

The Court notes that Plaintiff’s allegations do not suggest that a separate claim for breach of oral contract is being asserted against Defendant Cotton. (See Complaint ¶55.) Therefore, the statute of limitations arguments pertaining to the breach of an oral agreement are rendered moot.

The elements of negligent supervision are (1) employer's supervising an employee; (2) who is incompetent or unfit; (3) employer had reason to believe undue risk of harm would exist because of the employment; and (4) the harm occurs. (Federico v. Superior Court (1997) 59 Cal.App.4th 1207, 1213-14.)

Defendants argue that this claim is time-barred. A cause of action based on negligence is subject to a two-year statute of limitations. (CCP §339(1).) However, nothing within the four walls of the Complaint establishes that Plaintiff’s claim is time-barred, or that this cause of action is solely based on the actions of Defendant Cotton in 2019.