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Jocer Enterprises, Inc. v. Price

April 5, 2010

JOCER ENTERPRISES, INC., ET AL., PLAINTIFFS AND APPELLANTS,
v.
ERNEST PRICE, ROPERS MAJESKI KOHN & BENTLEY, DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, Mary Ann Murphy, Judge. Affirmed in part, reversed in part and remanded with directions. (Los Angeles County Super Ct. No. BC396060).

The opinion of the court was delivered by: Manella, J.

CERTIFIED FOR PUBLICATION

In the underlying action, appellants Jocer Enterprises, Inc. (Jocer), Spencer Graffam, and Jodi Graffam sued respondents Ernest Price and Ropers, Majeski, Kohn & Bentley (Ropers) for legal malpractice and indemnity. The trial court sustained respondents' demurrer to the second amended complaint without leave to amend on the ground that appellants' claims were time-barred under Code of Civil Procedure section 340.6.*fn1 We affirm in part and reverse in part.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND*fn2

Spencer and Jodi Graffam (Graffams) control Jocer, which employed Laura Attig as a sales representative. In November 2002, after Jocer discharged Attig, Jocer filed an action against Attig for misappropriation of trade secrets and sought injunctive relief (trade secrets action). Jocer was represented by attorney Price, who is employed by Ropers. Following the presentation of evidence at trial, the trial court granted non-suit on Jocer's claims, found that Jocer had applied for an injunction in bad faith, and awarded Attig $95,600 in attorney fees as a sanction against Jocer. In August 2004, judgment was entered in Attig's favor. The judgment and fee award were affirmed on appeal, and became final in January 2006.

In March 2006, Attig initiated an action for malicious prosecution against appellants, who were initially represented by Price.*fn3 In April 2006, on behalf of appellants, Price filed a motion under section 425.16 -- the law designed to curtail the filing of strategic lawsuits against public participation, often called the "anti-SLAPP law." On May 31, 2006, the trial court denied the anti-SLAPP motion.

On June 19, 2006, Attig requested an award of attorney fees and costs under the anti-SLAPP law (§ 425.16, subd. (c)(1)), which authorizes awards pursuant to section 128.5 when an anti-SLAPP motion "is frivolous or is solely intended to cause unnecessary delay." On July 3, 2006, while the motion was pending, respondents were substituted out of the action as appellants' counsel, and appellants' new counsel filed an opposition to Attig's request. On July 17, 2006, the trial court directed appellants to pay an award of $7,645 to Attig.

Appellants noticed an appeal from the ruling on the anti-SLAPP motion and the award. In June 2007, the Fourth Appellate District affirmed the denial of the motion, but reversed the award for want of an adequate explanation for imposing it. (Attig v. Graffam (June 21, 2007, E041019) [nonpub. opn.].) The appellate court remanded the matter to permit the trial court to explain its reasons for the award.

On July 9, 2007, appellants filed their original complaint in the underlying action against respondents for legal malpractice and indemnity. Later, on December 20, 2007, the trial court in Attig's malicious prosecution action issued an award of $7,645.00 in fees and costs to Attig, accompanied by an explanation for the award.

On February 9, 2009, appellants filed their second amended complaint in the underlying action. The complaint asserted a claim for legal malpractice against Price arising out of his services in the trade secrets action and malicious prosecution action; a claim for indemnity from respondents regarding the fee award in the malicious prosecution action; and a claim for indemnity from respondents regarding any judgment in the then-pending malicious prosecution action. Respondents demurred to the second amended complaint on the grounds that its claims were untimely under the statute of limitations for legal malpractice causes of action (§ 340.6, subd. (a)). On June 9, 2009, the trial court sustained the demurrer without leave to amend and ordered the action dismissed.*fn4

DISCUSSION

Appellants contend that the trial court incorrectly sustained the demurrer to the second amended complaint without leave to amend. They challenge the ruling solely with respect to the legal malpractice claim and the indemnity claim concerning the fee award in the malicious prosecution action; according to appellants, their other indemnity claim is "moot" because "the malicious prosecution action resulted in a defense judgment." As appellants have forfeited any contention of error regarding the latter claim (Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4), we exclude it from our review. Regarding the legal malpractice claim against Price, we affirm the sustaining of the demurrer -- albeit on a ground other than the statute of limitations relied upon by the trial court -- but conclude that appellants should be granted leave to amend the claim (see pts. C.3 & C.4., post). Regarding the remaining claim, we conclude that the trial court properly sustained the demurrer and denied leave to amend, as the complaint asserts no tenable claim for indemnity against Price and no tenable claim of any sort against Ropers (see pts. D.3. & D.4, post).

A. Standard of Review

"Because a demurrer both tests the legal sufficiency of the complaint and involves the trial court's discretion, an appellate court employs two separate standards of review on appeal. [Citation.] . . . Appellate courts first review the complaint de novo to determine whether or not the [] complaint alleges facts sufficient to state a cause of action under any legal theory, [citation], or in other words, to determine whether or not the trial court erroneously sustained the demurrer as a matter of law. [Citation.]" (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879, fn. omitted.) Moreover, "[i]f another proper ground for sustaining the demurrer exists, this court will still affirm the demurrer[] even if the trial court relied on an improper ground . . . ." (Id. at p. 880, fn. 10.)

"When [so] reviewing a demurrer on appeal, appellate courts generally assume that all facts pleaded in the complaint are true. [Citation.]" (Cantu v. Resolution Trust Corp., supra, 4 Cal.App.4th at p. 877, fn. omitted.) However, "[t]he complaint should be read as containing the judicially noticeable facts, `even when the pleading contains an express allegation to the contrary[]'" (ibid., quoting Chavez v. Times-Mirror Co. (1921) 185 Cal. 20, 23), and an appellate court may take judicial notice of facts not subject to judicial notice by the trial court (Taliaferro v. County of Contra Costa (1960) 182 Cal.App.2d 587, 592)."Second, if a trial court sustains a demurrer without leave to amend, appellate courts determine whether or not the plaintiff could amend the complaint to state a cause of action. [Citation.]" (Cantu v. Resolution Trust Corp., supra, 4 Cal.App.4th at p. 879, fn. 9.)

B. Section 340.6

The principal issues before us concern the application of section 340.6, which constitutes the statute of limitations for legal malpractice claims. (Laird v. Blacker (1992) 2 Cal.4th 606, 611 (Laird).) Subdivision (a) of section 340.6 states in pertinent part: "An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first." Thus, "section 340.6 states `two distinct and alternative limitation periods: one year after actual or constructive discovery, or four years after occurrence (the date of the wrongful act or omission), whichever occurs first.'" (Samuels v. Mix (1999) 22 Cal.4th 1, 7, quoting Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 946, 966.)

Subdivision (a) of section 340.6 also incorporates tolling provisions, stating: "[I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist: [¶] (1) The plaintiff has not sustained actual injury. [¶] (2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred. [¶] (3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this subdivision shall toll only the four-year limitation. [¶] (4) The plaintiff is under a legal or physical disability which restricts the plaintiff's ability to commence legal action." With the exception of subdivision ...


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