JOSEPH CONNELLY, Plaintiff and Appellant, v. DANIEL BORNSTEIN, et al., Defendants and Respondents.
A152375
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE
Filed 3/28/19
CERTIFIED FOR PUBLICATION; (San Francisco County Super. Ct. No. CGC-14-541666)
BACKGROUND2
In July 2012, Elizabeth Maguire brought an unlawful detainer action against appellant Joseph Connelly. Maguire was represented by attorney Daniel Bornstein, a partner at the law firm Bornstein & Bornstein (collectively, Bornstein). On September 18, 2012, Maguire voluntarily dismissed the unlawful detainer action.
DISCUSSION
Appellant contends
I. Legal Background
A. Court of Appeal Cases
“California has never prescribed by statute a specific period of limitation for malicious prosecution.” (Stavropoulos v. Superior Court (2006) 141 Cal.App.4th 190, 193 (Stavropoulos).) Instead, courts have long held the tort was encompassed by statutes governing claims for ” ‘injury to’ ” a person ” ‘caused by the wrongful act or neglect of another.’ ” (Id. at pp. 194–195 & n.3, 197.) Currently, this statute is
In 2011, Vafi, supra, 193 Cal.App.4th 874 held, as a matter of first impression, that malicious prosecution actions against attorneys were instead governed by
Vafi was followed by Yee v. Cheung (2013) 220 Cal.App.4th 184 (Yee). Yee agreed with Vafi‘s conclusion, noting that, in the case before it, “the gravamen” of the plaintiff‘s malicious prosecution claim against the attorney defendant “is the allegation that [the attorney] engaged in wrongful acts in his performance of professional legal services in his representation of the nonattorney defendants. This claim clearly falls within the plain language of the statute.” (Id. at p. 195.) Like Vafi, Yee concluded the more specific provision of
Roger Cleveland Golf Co., Inc. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660 (Roger Cleveland) disagreed with Vafi and Yee. Roger Cleveland involved an issue not present in the prior cases: “the tolling of the statute of limitations during the pendency of an appeal” in the underlying action. (Roger Cleveland, at p. 676.) Roger Cleveland discussed the judicially-created rule that “the statute of limitations on a malicious prosecution cause of action commences to run upon entry of judgment in the prior action and continues to run to the date of filing the notice of appeal. [Citation.] The filing of an appeal renders the malicious prosecution action premature. The statute of limitations is tolled and recommences to run when the appellate process has been exhausted.” (Id. at p. 674.) Roger Cleveland noted that the Supreme Court, construing
B. Lee v. Hanley
In 2015—after the Vafi, Yee, and Roger Cleveland decisions—the Supreme Court issued an opinion discussing the scope of
However, Lee noted, while the original proposed bill applied to ” ‘any action for damages against an attorney based upon the attorney‘s alleged professional negligence,’ ” subsequent amendments replaced this language with that of the enacted statute, ” ’ [a]n action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services . . . .’ ” (Lee, supra, 61 Cal.4th at p. 1234.) Lee explained, “the amended language can be traced to a proposal in a State Bar Journal article” advocating “a single statute of limitations applicable to legal malpractice claims. The author suggested using the phrase ‘[a]n action against an attorney for a wrongful act or omission’ rather than ‘malpractice’ because ’ “malpractice” is not in itself a word of precise definition. Legal malpractice is best stated in terms of the actual wrong: a wrongful act or omission occurring in the rendition of professional services.’ ” (Id. at pp. 1234–1235.) As a result of this amendment, Lee reasoned, “the
Lee rejected an argument that the statute should be construed “to apply to all forms of attorney misconduct, except actual fraud, that occur during the attorney-client relationship or entail the violation of a professional obligation.” (Lee, supra, 61 Cal.4th at p. 1238.) Lee reasoned: “Misconduct does not ‘aris[e] in’ the performance of professional services for purposes of section 340.6(a) merely because it occurs during the period of legal representation or because the representation brought the parties together and thus provided the attorney the opportunity to engage in the misconduct. To hold otherwise would imply that section 340.6(a) bars claims unrelated to the Legislature‘s purposes in enacting section 340.6(a)—for example, claims that an attorney stole from or sexually battered his client while the attorney was providing legal advice. Nor does section 340.6(a) necessarily apply whenever a plaintiff‘s allegations, if true, would entail a violation of an attorney‘s professional obligations. The obligations that an attorney has by virtue of being an attorney are varied and often overlap with obligations that all persons subject to California‘s laws have. For example, everyone has an obligation not to sexually batter others (see
Lee then applied this construction to the case before it. The plaintiff, Nancy Lee, retained the defendant, attorney William Hanley, to represent her in civil litigation, and advanced him funds to be used for attorney fees. (Lee, supra, 61 Cal.4th at p. 1230.) After the matter settled, Hanley indicated that the advanced funds exceeded the legal services rendered, but did not return the unearned fees despite Lee‘s demand. (Ibid.) Reviewing the trial court‘s order sustaining Hanley‘s demurrer, Lee reasoned: “Lee‘s complaint may be construed to allege that Hanley is liable for conversion for simply refusing to return an identifiable sum of Lee‘s money. Thus, at least one of Lee‘s claims does not necessarily depend on proof that Hanley violated a professional obligation in the course of providing professional services. Of course, Lee‘s allegations, if true, may also establish that Hanley has violated certain professional obligations, such as the duty to refund unearned fees at the termination of the representation (Cal. Rules of Prof. Conduct, rule 3-700(D)(2)), just as an allegation of garden-variety theft, if true, may also establish a violation of an attorney‘s duty to act with loyalty and good faith toward a client. But because Lee‘s claim of conversion does not necessarily depend on proof that Hanley violated a professional obligation, her suit is not barred by section 340.6(a).” (Id. at p. 1240.)
Lee did not expressly consider the application of the statute to malicious prosecution claims against attorneys. It disapproved Roger Cleveland “to the extent [it is] inconsistent with this opinion,” but in so doing Lee highlighted Roger Cleveland‘s characterization of
II. Section 340.6(a) Applies to Malicious Prosecution Claims Against Attorneys
We now turn to whether
Lee held
As we will explain, malicious prosecution, in certain pertinent respects, closely resembles legal malpractice. Legal malpractice is not a clearly defined term; the Legislature‘s choice of language for
In addition, malicious prosecution lawsuits against attorneys contribute to the cost of malpractice insurance, a key concern of the Legislature in enacting
Unlike its relationship to legal malpractice, a malicious prosecution claim stands in sharp contrast to claims Lee identified as falling outside of the statute‘s scope: an attorney‘s “garden-variety theft” or “sexual[] batter[y],” even when the conduct takes place during the legal representation. (Lee, at pp. 1237–1238.) While
However, appellant points to Lee‘s statement that, to fall within
First, Lee‘s requirement that an attorney‘s professional obligations not “overlap with obligations that all persons subject to California‘s laws have” arose in its rejection of the argument that
Second, even if the test did apply to claims like malicious prosecution, there is a material difference in the respective obligations of attorneys and litigants to not engage in malicious prosecution. We start with the probable cause element of malicious prosecution. “[T]he existence of probable cause is a question of law to be determined as an objective matter. [Citation.] ‘[T]he probable cause element calls on the trial court to make an objective determination of the “reasonableness” of the defendant‘s conduct, i.e., to determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable,’ as opposed to whether the litigant subjectively believed the claim was tenable. [Citation.] A claim is unsupported by probable cause only if ’ ” ‘any reasonable attorney would agree [that it is] totally and completely without merit.’ ” ’ ” (Parrish, supra, 3 Cal.5th at p. 776.)
However, even where a claim lacked probable cause, ” ’ “[p]robable cause may be established by the defendants in a malicious institution proceeding when they prove that they have in good faith consulted a lawyer, have stated all the facts to him, have been advised by the lawyer that they have a good cause of action and have honestly acted upon the advice of the lawyer.” ’ ” (Palmer v. Zaklama (2003) 109 Cal.App.4th 1367, 1383.) The reasoning underlying this advice-of-counsel defense—that litigants are entitled to rely in good faith on their lawyers’ assessment of a claim‘s legal tenability—does not extend to attorneys. Indeed, such an attempt was rejected in Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095, where an attorney of record in a shareholder action tried to defend against a subsequent malicious prosecution action on the ground that he “relied on [an associated attorney‘s] assessment of probable cause . . . since [the associated attorney] was the expert securities litigator.” (Id. at p. 1116.) The Court of Appeal rejected the argument, noting the attorney defendant owed “a duty of
That the advice-of-counsel defense is available for litigants but not for lawyers is material for our purposes. Clients are entitled to rely in good faith on their attorneys’ assessment of the legal tenability of a claim. But attorneys are professionally obligated to competently perform legal services by personally assessing the tenability of a claim before asserting it. This obligation—which cannot be avoided by a claim of good faith reliance on the advice of another attorney—is therefore “a professional obligation as opposed to some generally applicable nonprofessional obligation.” (Lee, supra, 61 Cal.4th at p. 1238.)
We recognize that finding
In sum, consistent with Lee,
DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.
SIMONS, J.
We concur.
JONES, P.J.
BURNS, J.
(A152375)
Law Offices of Zelner & Karpel, Donald E. Karpel; Williams S. Yee for Plaintiff and Appellant.
Peretz & Associates, Yosef Peretz for Defendant and Respondent Daniel Bornstein.
Bornstein and Bornstein, Daniel Bornstein, Dylan Tong -for Defendant and Respondent Bornstein and Bornstein.
