*1 Dist., Mаy Div. [No. 1992.] B054536. Second Seven. SIROTT,
STANLEY Plaintiff and Appellant, al., LEATRICE LYNNE LATTS et Defendants and Respondents. *3 Counsel Appellant.
Thielen & Burke Thielen for Plaintiff and Joseph and E. Bonesteel, Gunasekaran Haight, & G. Rita Roy Weatherup Brown Defendants Respondents.
Opinion Sirott, M.D., plaintiff, from LILLIE, appeals P. Stanley J.— Leat defendants legal his action for judgment dismissing malpractice to the first their demurrer general rice and & Herstead after Latts Latts the ground amend on the was sustained without leave to complaint amended action limitations.1 by is barred
Facts 31, The was January action commenced facts, contentions, and material without its deductions
Limited to and 584, (see (1971) 5 Cal.3d 591 conclusions of fact or law Serrano Priest 1241, 1187]), 41 first amended P.2d the Cal.Rptr. 487 A.L.R.3d In and decided to surgeon, 1986 complaint alleged: July physician plaintiff, In advice sought retire the of medicine. practice plaintiff from October coverage from defendants of “tail” insurance for regarding purchase carrier, Co through medical medical insurance malpractice malpractice (the insurer). Mutual Trust operative Physicians of American Protection $50,000 Defendаnts for tail coverage advised that the plaintiff premium demanded was an of by insurer unconstitutional and unenforceable form Thereafter, need age plaintiff premium. discrimination and that not pay 1Defendant John did not action Herstead demur to first amended presumably pending is still as to him. is appealable of dismissal nevertheless demurring because it left issues to be between and the defendants. plaintiff determined 815, 821, (Buckaloo 865].) Cal.Rptr. v. Johnson 14 Cal.3d fn. 537 P.2d 3 [122 treat appeal judgment, While the notice was filed before оf the we the notice rendition Court, (Cal. 2(c).) immediately entry as filed of the rule judgment. after Rules In advising pay was sued for medical not to malpractice. coverage, for tail defendants premium insurance rendered services Had legal plaintiff. plaintiff purchased substandard defendants, subject given insurance which was the of the advice legal have full coverage indemnity would had for defense and costs It was further without success to alleged: attempted Defendants reinstate tail plaintiff’s adjudication and obtain an that the insurer’s coverage require- ment of a was an form premium coverage age such unconstitutional discrimination. to retain Consequently, plaintiff required counsel defend the medical did action his own Such expense. expense not exceed the have pay would been premium plaintiff required had he not at a mandatory followed defendants’ advice. On action, settlement conference counsel plaintiff’s action; advised him to said settle sum plaintiff paid 1990. As a result defendants’ professional negligence plaintiff $230,000. sustained damages of
Defendants Leatrice & Latts Latts Herstead demurred generally to first amended complaint on ground barred Proc., limitations (Code 340.6). Civ. conjunction § with the demurrer defendants that the trial take requested judicial court *5 Code, 452, notice of (Evid. its records (d), 453) subd. §§ action against (Gallo v. plaintiff County) Sirott Ct. L.A. (Super. NEC-46422) No. and an arbitration insurer proceeding by plain- tiff (Cooperative of American Physicians, Inc. Sirott Ct. L.A. (Super. County) C-662326). No. Such records showed: In medical malpractice a action demurrer to the complaint was filed behalf on of Dr. Sirott his by 20, counsel 7, on In January the arbitration on proceeding, August 1987, an award was rendered which determined that Dr. Sirott was entitled to rescind his decision to be for his tail responsible coverage own and the insurer had obligation to defend or Dr. indemnify Sirott 1988, 7, action. On was entered confirming the award. argued
Defendants suffered plaintiff injury actual from defendants’ alleged negligence, within meaning of of Civil Code Procedure section 340.6, both by incurring legal fees defend the medical malpractice action by losing right to insurance Inasmuch as coverage. both events occurred more than one before the year instant action filed, that action is barred section 340.6.
The demurrer was sustained without leave to amend action dismissed as to demurring defendants. Plaintiff from the appeals judg- ment of dismissal.
928
Discussion
340.6,
one-year
section
of Civil Procedure
Under Code
when the
to run simply
not begin
does
limitations for
know,
knows,
the plaintiff
the attorney’s negligence;
or should
plaintiff
(1989)
(Goebel v. Lauderdale
harm.2
аctual and appreciable
also must sustain
1502,
Court
275].)
Supreme
As our
Cal.Rptr.
214
1507
Cal.App.3d
[263
849, 491 P.2d
(1971)
Cal.Rptr.
A when he as a result of damage compelled, client suffers error, Nixen, (Budd supra, incur v. 6 Cal.3d to or fees. attorney’s pay attorney whichever occurs first. In no event shall the time for four attorney of wrongful through for [5] 2Code of Civil professional (1) years except the use of reasonable act or plaintiff wrongful services shall be Procedure omission, that the has not sustained act or period section or four omission, diligence shall be commenced 340.6 years actual other than for actual tolled provides should have from the date of the injury; within one during in . pertinent the time that commencement . .” discovered, year fraud, after the part: wrongful any arising the facts “(a) of of the plaintiff An action in the act or constituting the following action exceed discovers, performance omission, exist: an
929 in 201-202.) defending incurred fees attorney Plaintiff pp. 20,1987, when counsel January medical action not later than his attorney demurrer his Plaintiff his for liability filed a on behalf. contends because, harm him in first alleged fees did not constitute actual to such premium amended fees did not exceed complaint, plaintiff have been had he not followed defendants’ advice. required would to Plaintiff cites that suffered injury for authority proposition in client form of of this manner—a offset—for negated purposes determining begins when the statute to of limitations event, We In reject run. novel and plaintiff’s argument. any unsuрported in damage shows on its face that suffered another form more than one before was year commenced. present
Defendants’ to tail attempt plaintiff’s reinstate insurance cov- 7, 1987, erage ended failure when an was August arbitration award rendered which determined that to be plaintiff could rescind decision responsible for his own tail insurer coverage and the was not obligated defend or him indemnify action. The award was 7, confirmed by entered that 1988. On date plaintiff suffered actual damage thе irretrievable loss of the medical right tail malpractice insurance for which coverage—the purpose very consulted defendants advice. subject negligent their allegedly (See 105, (1991) Johnson v. Simonelli 231 Cal.App.3d 110 Cal.Rptr. 340.6, 205].) For purposes section need not damage actual be defined 606, terms (Laird amount. monetary Blacker Cal.4th 614 [7 691].) 828 P.2d Cal.Rptr.2d used the term Legislature ‘actual’ “[T]he occurred, focus on the that damage and eliminated all qualifiers fact prevent confusion that would arise by courts to cоnsider the total requiring (Id., amount damages.” italics.) at p. original Plaintiff contends harm he sustained on account of alleged defendants’ did negligence not become irremediable until when he agreed to pay settle action. Before that date, plaintiff argues, his liability negligence speculative action, and he could have prevailed with result that he would not have been Blacker, harmed by defendants’ negligent advice. Laird v. supra, Cal.4th our Court Supreme rejected the requirement, judicially grafted 340.6, onto Code Civil Procedure section must be damage irremediable as well as *7 before actual the statute of limitations for legal malpractice begins to run.
Plaintiff sustained actual damage a result of defendants’ alleged negli- gence upon 7, entry judgment (Jan. confirming arbitration award 1988) because at point that it was determined judicially that plaintiff was 930 to he was compelled and insurance coverage, to tail
entitled of the regardless action the medical defending the expenses limitations for onе-year Accordingly, that action. outcome of 7, to run on commenced additional suffered fact that changed by This result is not when, he paid negligence from defendants’ damage “The cause to settle all, or sustains the client . . . before arises legal malpractice] [for negli attorney’s by occasioned damages even the greater part, attor from the flowing and actual harm Any gence. appreciable [Citations.] the client which of action upon establishes a cause conduct ney’s negligent Indeed, negligence attorney’s discovered his having sue. once [][] within his action the client must institute damage, suffered some having from barred will be in the statute of limitations time prescribed (Budd Nixen, 6 supra v. conduct.”3 attorney’s thereafter of his complaining 195, 201.) Cal.3d sus was properly the first amended
The demurrer to abused its trial court is whether the The only remaining question tained. Proc., 472c.) Civ. (See § amend. Code leave to denying discretion constitutes an to amend demurrer without leave An order sustaining defect can that the if reаsonable any possibility discretion there is abuse of Credit, Business (Careau Security & cured amendment. Co. Pacific No 387].) Cal.Rptr. Cal.App.3d Inc. here, notice show subject judicial exists for matters such possibility of the the bar cannot be amended to overcome the first amended complaint statute of limitations.
Disposition of dismissal is affirmed. J., (Fred), Woods concurred.
JOHNSON, J. dissent. respectfully I her Here a advice first saved
This is an unusual case factually. client roughly then later cost the premiums, client some insurance The majority fees. five times that amount settlement costs wake of our conclusion that “parade 3The dissent foresees a veritable of horribles” in the expressed in the plaintiff’s legal malpractice action is barred limitations. The concerns response. dissenting opinion speculation require are in the realm of and therefore *8 he I accrued when first and differ over whether the client’s cause of action lawsuit employ lawyer policy had to a to defend the insurance against $50,000 when covеred—at the premium—or only would have cost of the expense resolving lawsuit exceeded the amount. premium After in case the Court filed its argument oral this California Supreme in opinion Laird v. Blacker Cal.4th 828 P.2d Cal.Rptr.2d 606 case held the legal This limitations cases does period malpractice 691]. not commence “a an order until client suffers adverse dismissal the trial underlying court action on which [at level] (Id., is If 609.) action based.” that were followed p. principle in the majority this case would hold Dr. Sirott had filed his legаl malpractice For, case, in action within the the instant there was statutory period. in “adverse until judgment” action Jan- underlying $230,000 when uary Dr. Sirott was forced to to that settle pay later, filed action. Dr. Sirott his few legal action months well within the statute of limitations. however,
The majority opinion, the commencement of the limita- pushes tions much earlier in the period Rather underlying litigation. waiting until the underlying medical has terminated adversely action level, the client at trial court would have the statute of limitations on the bеgin running case when the client first hires a second work lawyer underlying action. There a very good reason cause concluding appellant’s of action had not accrued until 3,1990, $230,000 when found it necessary agree out order to settle did malpractice claim. Dr. Sirott not suffer any “actual until that injury” date.1 client, Sirott,
The defendant in the case advised Dr. present her not to pay $50,000 advice, for tail coverage insurance. But for defendant’s would have spent insurance premiums that he instead was able to that, retain in his advice, bank account. It is true of this same because Dr. Sirott was required to employ new counsel at his own when expense someone filed a medical malpractice claim Had the against him. doctor paid the tail coverage the insurance premium would have company presumably employed lawyer not, provide defense. Because he had doctor had to withdraw some of the from premium savings majority 1The appears proceeding to treat to determine whethеr Dr. had Sirott “tail coverage" the “underlying However, action” for purposes of Laird v. is apparent Blacker. it Dr. Sirott at most “contingent sustained a injury,” not injury,” an “actual when he lost in that proceeding. Unless and until contingency prosecution occurred—the successful of a medical malpractice injury him—the was not real and thus not “actual.” *9 This expense, to defend him. lawyer this second pay bank account to $50,000 however, would premium plaintiff insurance never exceeded original defendant lawyer’s hе not followed to had pay have been required instead, Sirott and, If the item Dr. only the tail coverage. purchased advice fees, his cash lawyer’s legal was the second had been to required pay if he had not received higher would have remained balance defendant’s advice. legal followed he claimed doctor could have date which the plaintiff
The earliest on the date of the advice was as a result of damages appellant’s suffered actual For, it was at this January cоnference on mandatory settlement him he would new counsel advised settlement that Dr. Sirott’s mandatory $230,000 first time for the point, the action. At this have to to settle pay he had pay have been required exceeded what he would costs plaintiff’s time, however, did Dr. Sirott Until that defendant’s advice. not followed at all to any money he be required pay know whether would he was any payment Nor did he know whether malpractice plaintiffs. $50,000 he had insurance premium exceed the to make would required Thus, until the defendant’s аdvice. by following avoided a result of incurred as conference the losses the doctor plaintiff settlement savings experi- advice did not exceed the defendant following lawyer’s enced as a result of that advice. Dr. Sirott was not until 3 settlement conference
Consequently, that actual legal malpractice: an essential element of position prove make a was required had occurred. Until the doctor damages of the medical malpractice settlement order to obtain a dismissal payment him, he would not have to out pay claim remained possibility if Even he had to lawyer. pay fees to his second anything beyond legal this pay- to the remained something possibility malpractice plaintiffs, less than the ment combined with the second fees would be defendant law- he had saved insurance premiums by following damages” advice. doctor did not suffer “actual yer’s Consequently, plaintiff until the date of the settlement conference when he was required more than to settle the medical substantiаlly Because cause of action did not accrue until appellant’s legal malpractice doctor suffered actual on the date of the settlement confer- injury ence—January 1990—the statue of limitations did not begin running the claim until that date. the limitations did not Consequently, period expire and, thus, until a later. The filed year well within that period the trial court should have rejected statute of limitations defense. For reasons, I these would the judgment reverse dismissing appellant’s malprac- tice claim.
I am concerned the fosters a wasteful notion. dangerous, followed, If this it seems there will one course logical precedent *10 clients file time their pursue—to every a lawsuit wait might makes a mistake which cause them later harm. can’t lawyer They whether loss at the court lawyer mitigate to see another can avoid or trial No, the level. moment have to someone to to cure they attempt Otherwise, had file counsel they better a should problem, loss, fail in the clients will find the is avoiding legal malpractice remedy foreclosed, too, because the ever since ticking statute limitations has been started to save the they trying situation.
Under rationale of the even majority clients can’t wait to see opinion if lawyer’s a will advice turn to have gain out conferred a net rather net loss. limitations period begins ticking moment they expend any So, money attempting prevent gain they from if becoming hope loss. claim, their to preserve clients often will be to file required the malpractice they lawsuit befоre even whether have they know succeeded in preserving (or loss) a net gain avoiding a net from their advice.
The majority may some like the defendant firm opinion provide lawyers, case, in this with a windfall. These fortunate be attorneys wiggle will able to out of the them brought lawsuits without confronting merits. A statute of limitations defense will rescue them because their clients made the mistake waiting around to find out if their lawyer’s might error balance, turn out to be irrelevant or even helpful, on So in filing before suit. run short the majority’s decisiоn is good bad clients but for lawyers. run, however, long there is reason the rule the expect majority opinion adopts will hurt lawyers and the judicial as well system, as clients. (The majority characterizes opinion what as a follows of horribles” “parade ante, based on speculation. [Maj. fn. I opn., p. consider Naturally, 3.] it instead to be a reasonable forecast based on rational factors and common deterrence, about human assumptions nature—the sort of very analysis incentives, rules, their etc. and probable effects which underlies many legal if not most. Other people—and possibly the future—will have to judge forecast.) soundness of the event,
In any unless we assume and the legal clients bar ignorant remain of the rule embodied in the majority opinion it seems reasonable to forecast this rule will only encourage clients and their advisers a “hair adopt trigger” to their approach lawyers’ possible malpractice. Don’t wait to see whether the can problem be cured or minimized at the trial level. Don’t even wait to if see what might viewed bad advice actually lawsuit and winner. File that malpractice have made a net you turns out to away will tick file it now. Otherwise of limitations clock minimize if and when efforts to your prevent be without recourse you’ll Thus, is to to clients open fail. rational course ultimately the harm regard errs and without file suit after the shortly lawyer the malpractice made turn out to have may or whether it whether the error be curable them net winners. fosters
I the “hair trigger” approach am concerned at a with two lawsuits bad for clients because it them to requires proceed *11 Worse, in these two positions it them to inconsistent requires urge time. to cure the where are they attempting In the lawsuit underlying suits. mistake, the what their to convince court the clients must lawyer’s attempt to enough (or error at least not erroneous did or advised was not lawyers in the Simultaneously, legal malpractice their legal rights). the clients deny case, did or lawyers what their these same clients must to attempt prove verdicts. There the of inconsistent advised indeed was error. possibility in the “winning” finding More clients end a likely, up their estoppel against position lawsuit which will constitute collateral vice versa.2 lawsuit—or underlying time, lawyers are bad for because
At the same these “hair lawsuits trigger” filed. It is reason- there will be more suits many malpractice probably file early will feel to compelled to clients and their advisers able anticipate whether can they they in their while learn rights and often order to preserve have caused or their lawyers’ malpractice may avoid any problems potential Thus, otherwise would be. they whether it left them better off than actually defend will find themselves forced to lawyers it seems rational to forecast if clients were only which have been filed cases would not against many if a net because of allowed to wait to see suffered loss they really mistake. lawyer’s “hair are to add a further
Finally, trigger” likely these suits judicial system burden to the as clutter the dockets with cases they many will later rather еventually during process—often Sometime disappear. experience a in 2Apparently I am not alone in this concern. Someone with fair amount of judicial system problem. impractical require the California has the same “It is a client noted (dis. appeal right.’’ opn. simultaneously pursue two lawsuits: a action and an Mosk, J., Here, Blacker, however, 627.) supra, “impractical in Laird v. 2 Cal.4th compelled is even case clients will be ity” greater. Under the in this on pursue simultaneously very Depending two inconsistеnt lawsuits in the same trial court. motion, draw, they judge—in law and “fast could even find themselves before the same track,” “only area—arguing a of their mouths judge or the in town” in rural out two sides consequences attorneys’ as the erroneousness and of their advice. did not will become apparent sooner—it loss, a one continu- cause the client net actually certainly worthy Yet remain these cases they the lawsuit.3 while on dockets ing pursue the usual will absorbing judicial they proceed through resources that, this motion and this conference steps—demurrer, litigation discovery, in client is to cure striving and that. when the which the Only parallel action will feel succeeds these clients lawyer’s apparent finally error mitigate in In meantime judicial safe their cases. dismissing will have limited time and resources lawsuits system its squandered were, sense, in which reasonable any premature. was,
Until Dr. Sirott’s case any sense, timely reasonable When it matured he moved fashion premature. to file my suit. should not be dismissal— opinion, punished—through manner, acted in having such rational one which is interests best clients, legal profession, judicial system, alike. J., Johnson, A rehearing for a denied June petition was of *12 that the opinion granted. should be petition 3Legal malpractice pose cases problems of limitations which are different in kind not, from other forms of malpractice general. or other litigation forms in More often or, least, lawyer’s malpractice litigation only affects case in is through at the curable Thus, litigation. any malpractice inevitably lawsuit almоst be filed same court must in the hearing hear litigation implicated which did or is lawyer’s alleged act initial malpractice. particular This is no problem underlying when the has lawsuit been terminated in But problems court. it does litigation create described above the underlying when is ongoing still the time the lawsuit is filed. problems These do litigation not arise in other underlying injury forms because the does illustrate, litigation not arise out of is through nor it “cured” litigation. To a medical consider malpractice case. If surgeon leaves a in sponge patient’s body during operation, an room, cure attempts mitigate or that malpractice operating occur not the courtroom. any So medical ongoing lawsuit which be filed not run an does afoul of piece litigation which hopes mitigate underlying victim or will cure problem surgeon’s created patient mistake. The not forced to take inconsis- positions tent in the same forum in the action as he or would in a she legal malpractice action filed while ongoing remedy efforts wеre still in the courts to a lawyer’s neutralize analogous mistakes. Consequently, telling they must clients file their underlying actions while the underway they lawsuit is still before even know whether allegedly their erroneous advice has made them net losers or net winners has far consequences different integrity those clients but for the of the legal system than would a requirement similar or other area areas substantive of the law. If the courts going are not to be sensitive to these problems, Legislature should. The present trend decisions—particularly extended instant leading case—is us in a direction I doubt the lawmakers would have had they intended term foreseen the “actual injury” would be construed as it has.