Judge: Thomas D. Long, Case: 22STCV22902, Date: 2023-05-23 Tentative Ruling

Case Number: 22STCV22902    Hearing Date: May 23, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On July 15, 2022, Plaintiff Christina Fulton filed this action against Defendant John Kelley Courtney and others for legal malpractice.

On September 27, 2022, Defendant filed a demurrer to the eighth, ninth, tenth, eleventh, and twelfth causes of action, the only causes of action brought against him.

Defendant’s request for judicial notice is granted.

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.)

A.        The Claims for Legal Malpractice are Facially Time-Barred (Eighth and Tenth Causes of Action).

The eighth cause of action alleges breach of fiduciary within the attorney-client relationship, and the tenth cause of action alleges legal malpractice.

Defendant demurs to these causes of action on the grounds that they are barred by the statute of limitations.  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.)

Plaintiff alleges that Defendant and the firm of Girardi Keese obtained a settlement of $924,300.00 for her in March 2019.  (Complaint ¶¶ 9-10.)  Between April 2019 and September 2020, Plaintiff received a total of $190,000.00.  (Complaint ¶ 17.)  After crediting the $5,000.00 that was advanced to Plaintiff, $744,300.00 remained outstanding.  (Complaint ¶ 17.)  The settlement funds were disbursed to Thomas Girardi via three checks in April 2019.  (Complaint ¶ 18.)  In April 2021, Plaintiff filed Fulton v. Girardi, Adv. 2:21-ap-01072-BR, seeking to have her claim against Girardi declared non-dischargeable in Girardi’s individual bankruptcy case.  (Complaint ¶ 22.)  On November 16, 2021, the Bankruptcy Court entered a non-dischargeable judgment against Girardi and his conservator in the amount of $744,650, including $350 in costs.  (Complaint ¶ 23 & Ex. B.)

Plaintiff alleges that Defendant breached his fiduciary duties by “failing to enforce the Settlement Agreement and monitor that Plaintiff received her Settlement Funds” and being “careless in handling Plaintiff’s file and misrepresent[ing] facts as to the whereabouts of the Settlement Funds.”  (Complaint ¶ 64; see Complaint ¶ 76.)

Defendant argues that Plaintiff was on inquiry notice at least by April 2019 when she received only a portion of the settlement funds entitled to her under the settlement agreement, and Plaintiff was also on notice of wrongdoing by April 20, 2021, when she filed her complaint in Thomas Girardi’s bankruptcy proceedings.  (Demurrer at p. 5.)  Plaintiff alleges that she discovered that the settlement funds were gone on July 14, 2022, the day before she filed this action.  (Complaint ¶ 18.)  Plaintiff argues that her injury occurred “when records were provided and it became clear to [Plaintiff].”  (Opposition at p. 7.)

Plaintiff’s April 20, 2021 complaint in the bankruptcy proceedings alleged that Girardi failed to pay Plaintiff the $729,000.00 unpaid balance of the settlement payment and converted it to his own use.  (RJN, Ex. A, ¶¶ 17, 20, 24.)  That is the same injury alleged here.  Plaintiff suffered her injury when she was not paid the full settlement amount at the end of her case, and she was aware of the wrongdoing no later than April 20, 2021.  Accordingly, Plaintiff’s legal malpractice claims, filed on July 15, 2022, are time-barred.

The demurrer to the eighth and tenth causes of action is sustained.

B.        Plaintiff Does Not Allege a Contract with Defendant (Ninth and Twelfth Causes of Action).

The ninth cause of action alleges that Defendant breached the retainer agreement with Plaintiff, and the twelfth cause of action alleges that Defendant breached the settlement agreement.

Defendant argues that he is not a principal of the contracts and did not prepare or sign the contracts.  (Demurrer at p. 6.)  An agent is not ordinarily liable on written contract that he executes on behalf of a disclosed principal.  (Area 51 Productions, Inc. v. City of Alameda (2018) 20 Cal.App.5th 581, 603, fn. 13.)

Plaintiff alleges that she retained Girardi Keese and Thomas Girardi to represent her for legal services.  (Complaint ¶ 69.)  Defendant was an employee of the firm, “Plaintiff’s point of contact,” and the senior attorney.  (Complaint ¶ 69.)  Because Defendant was not a party to the retainer agreement, the demurrer to the ninth cause of action is sustained.

Plaintiff also alleges that Attorney Samantha Gold signed the settlement agreement above “Acknowledgment of Confidentiality and Non-Disparagement and Consent to be bound by the same.”  (Complaint at p. 17, ¶ 4.)  Defendant “was the senior attorney working the file.  He was included in the emails relating to Plaintiff’s case and settlement.”  (Complaint at p. 17, ¶ 4.)  Because Defendant was not a party to the settlement agreement, the demurrer to the twelfth cause of action is sustained.

C.        Plaintiff Does Not Allege Fraud with Specificity (Eleventh Cause of Action).

The eleventh cause of action alleges that Defendant failed to disclose all facts related to Plaintiff’s case and did not correct Gold’s misrepresentations that the settlement funds had not yet been disbursed.

“The essential elements of a count for intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage.”  (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231.)  Fraud must be pleaded with specificity.  (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)  “This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’”  (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

Defendant argues that there are no allegations about what Defendant said, how Plaintiff was misled, or that Defendant knew any representation was false.  (Demurrer at p. 7.)

Plaintiff alleges that Gold mispresented that the settlement funds had not yet been disbursed, and Defendant was included on these communications but did not correct the misrepresentation, despite knowing that it was false.  (Complaint ¶ 81.)  Plaintiff “actually and justifiably relied on Defendants’ relationship and representations.  If Plaintiff had been aware, she would have taken steps to protect her Settlement Funds and to protect against Defendant’s wrongful conduct.”  (Complaint ¶ 83.)  On July 14, 2022, she discovered that all of the settlement funds had dissipated and that Defendant “had lied to her.”  (Complaint ¶ 13.)

These allegations do not plead with specificity any misrepresentation by Defendant.  Even if construed as fraud by concealment/omission, Plaintiff still does not specifically plead reliance or damages.  If the settlement funds had already been dissipated at the time of Gold’s statement, then it is unclear how Plaintiff could have relied on a representation that they had not yet been disbursed and how Plaintiff could have taken other steps.

The demurrer to the eleventh cause of action is sustained.

D.        Conclusion

The demurrer is SUSTAINED.  Plaintiff did not show how she can amend the Complaint to remedy the deficiencies, so no leave to amend is granted.

The Court orders Defendant John Kelley Courtney DISMISSED from the Complaint with prejudice.

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.  Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

         Dated this 23rd day of May 2023