Judge: Thomas D. Long, Case: 20STCV02956, Date: 2023-05-25 Tentative Ruling

Case Number: 20STCV02956    Hearing Date: September 21, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On May 30, 2023, Plaintiff Franklin R. Fraley, Jr. filed a second amended complaint (“SAC”) against Defendants Ford Serviss, LLP, Collins|Ford, LLP, William H. Ford III, Claudia J. Serviss, Michael D. Collins, Beitchman & Zekian, P.C., and David P. Beitchman.  The SAC alleges (1) conversion, (2) intentional interference with contractual relationship, (3) intentional interference with prospective economic advantage, and (4) aiding and abetting fraudulent transfers.

On June 30, 2023, Ford Serviss, LLP, Collins|Ford, LLP, William H. Ford III, Claudia J. Serviss, and Michael D. Collins (collectively, “Ford Defendants”) filed a demurrer.

On July 3, 2023, Beitchman & Zekian, P.C. and David P. Beitchman (collectively, “Beitchman Defendants”) filed a demurrer.

REQUEST FOR JUDICIAL NOTICE

The Ford Defendants’ and Beitchman Defendants’ requests for judicial notice of pleadings and documents in this case are denied as unnecessary because those documents are already part of this case’s record.

DISCUSSION

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)  When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true.  (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)  “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.”  (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 556.)

To sustain a demurrer on the statute of limitations, the running of the statute must appear clearly and affirmatively on the face of the complaint.  (Geneva Towers Ltd. Partnership v. City of San Francisco (2003) 29 Cal.4th 769, 781.)  “‘[I]t is not enough that the complaint might be time-barred.  [Citation.]’”  (Ibid.)

An action against an attorney for a wrongful act or omission arising from professional services must be brought within the earlier of (1) one year after the plaintiff discovers (or through the use of reasonable diligence should have discovered) the fact constituting the wrongful act or omission, or (2) four years after the date of the wrongful act or omission.  (Code Civ. Proc., § 340.6, subd. (a).)  The time shall not exceed four years, but it is tolled when the plaintiff has not sustained actual injury.  (Ibid.)  “The test for actual injury under section 340.6 . . . 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 Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 751.)  The plaintiff need not be a client of the attorney for this statute of limitations to apply.  (Vafi v. McCloskey (2011) 193 Cal.App.4th 874, 882-883.)

The statute “speaks of wrongful conduct ‘arising in the performance of professional services,’ not merely legal services.”  (Lee v. Hanley (2015) 61 Cal.4th 1225, 1237 (Lee).)  This “include[s] professional obligations that go beyond duties of competence associated with dispensing legal advice or advocating for clients in dispute resolution.  (See, e.g., Cal. Rules of Prof. Conduct, rule 4–100 [governing an attorney’s handling of a client’s property].)  In light of the Legislature’s intent that section 340.6(a) cover more than claims for legal malpractice, the term ‘professional services’ is best understood to include nonlegal services governed by an attorney’s professional obligations.”  (Ibid.)

As the Court stated in connection with the demurrers to the FAC, all of Plaintiff’s claims arise from the disbursement of settlement proceeds and failure to pay Plaintiff’s fees pursuant to his attorney’s liens.  (See SAC ¶¶ 31-32, 35-36, 64.)  The negotiation of the settlement and disbursement of the settlement proceeds are nonlegal services governed by an attorney’s professional obligations, constituting “professional services.”  (See Lee, supra, 61 Cal.4th at p. 1237.)  Plaintiff cannot prove his claims against Defendants “without demonstrating they breached professional duties owed to [him], or nonlegal services closely associated with the performance of their professional duties as lawyers.”  (Foxen v. Carpenter (2016) 6 Cal.App.5th 284, 292.)  Although actual fraud is excluded from the one-year limitations period, the fourth cause of action for “Aiding and Abetting Fraudulent Transfers” is not one for actual fraud.  The “actual fraud” exception to section 340.6, subdivision (a) does not apply to claims that allege that a defendant aided and abetted a breach of fiduciary duty, without alleging that they committed actual fraud.  (Graham-Sult v. Clainos (9th Cir. 2014) 756 F.3d 724, 747.)

The statute of limitations began to run with the July 9, 2018 entry of judgment on the arbitration fee award.  (See SAC ¶¶ 44-45.)  Plaintiff alleges no facts to support tolling after this date.  Because Plaintiff did not file this action until January 22, 2020—long after the July 2019 deadline—this action is facially time-barred.

CONCLUSION

The demurrers are SUSTAINED without leave to amend.  This action is DISMISSED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

         Dated this 21st day of September 2023