Kachlon v. Spielfogel
Filed 12/31/12
Kachlon v. Spielfogel CA2/1
OFFICIAL REPORTS
California Rules of Court, rule
8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
MORDECHAI KACHLON et al.,
Plaintiffs
and Appellants,
v.
DANIEL J. SPIELFOGEL,
Defendant
and Respondent.
No. B238406
(Los Angeles County
Super. Ct. No.
BC339973)
APPEAL
from an order of the Superior Court of
County.
Kevin Clement Brazile, Judge. Reversed.
Law
Offices of Stewart Levin and Stewart J. Levin, for Plaintiffs and Appellants.
Nemecek
& Cole, Jonathan B. Cole and Susan S. Baker for Defendant and
Respondent.
___________________________________
Beginning in 2002, three attorneys
in succession handled legal matters for plaintiffs that in 2005 resulted in a
substantial judgment being entered against them. Plaintiffs filed this legal malpractice
action against the attorneys in 2005, alleging the attorneys breached their
professional duties. The first attorney,
whose representation of plaintiffs had ended in 2003, moved for summary
judgment, arguing the action was time barred as to him. The trial court granted the motion,
concluding the action was time barred because no triable issue existed as to
whether (1) plaintiffs knew or should have known of the attorney’s negligence
or (2) suffered injury more than one year before they filed their
negligence could not have proximately caused plaintiffs’ damages because the
negligence of the second and third attorneys constituted an intervening,
superseding cause of plaintiffs’ damages.
We conclude no
evidence indicates when plaintiffs sustained actual injury, and no evidence
indicates the intervening conduct of the second and third attorneys superseded
that of the first attorney. Defendant is
therefore not entitled to summary judgment.
BACKGROUND
We glean the
facts from plaintiffs’ complaint and evidence submitted in connection with
defendant’s summary judgment motion, strictly construing the moving parties’ papers
and liberally construing those of the opposing party. (Howell
v. State Farm Fire & Casualty Co. (1990) 218 Cal.App.3d 1446, 1448.)
Plaintiffs
Mordechai and Monica Kachlon were owed $53,000 by Debra and Donny Markowitz,
the debt represented by a promissory note
and secured by a deed of trust. The
Markowitzes also owed Mordechai for contractor services he had performed at
their home and for a personal loan he had made.
unsecured.
In July 2002,
Mordechai signed a writing acknowledging that the promissory note had been
canceled and the deed of trust reconveyed in exchange for $12,000.
In November
2002, plaintiffs retained defendant Daniel Spielfogel, an attorney, to
represent them with respect to both the secured and unsecured debts. On March 12, 2003
Spielfogel filed a complaint on behalf of Mordechai against the Markowitzes,
seeking recovery for Mordechai’s construction services and the unsecured
personal loan. (Kachlon v. Markowitz (Super. Ct. Los Angeles County, 2003, No.
BC291979); the Kachlon action) The complaint did not mention the secured
debt.
Concerning the
secured debt, Mordechai advised Spielfogel that he had canceled the $53,000
promissory note and reconveyed the security to the Markowitzes in exchange for
$12,000, but felt they still owed the remaining balance on the
note—$41,000—pursuant to an oral agreement.
Mordechai also informed Spielfogel that Debra was a lawyer and that the
Markowitzes would contest this claim.
Spielfogel drafted a second complaint concerning the secured debt, but
it was never filed.
In March, May
and June 2003, plaintiffs pursued nonjudicial foreclosure on the deed of trust
that had secured the $53,000 debt. These
efforts were unsuccessful.
In August 2003,
the Markowitzes sued plaintiffs for damages arising from the foreclosure
proceedings, alleging plaintiffs recorded three notices of default after
acknowledging that the underlying debt had been paid and the promissory note
and deed of trust delivered to escrow for cancellation. (Markowitz
v. Kachlon (Super. Ct. L.A. County, 2003, No. BC310492); the
represented the amount due on the note, and falsely claimed the Markowitzes had
defaulted, in an effort to obtain the Markowitzes’ property by fraud. As a result, title to the property was
clouded and its value diminished, and the Markowitzes were forced to incur
attorney fees to clear title. The
Markowitzes sought general damages, punitive damages, and attorney fees.
The
In mid-2003,
plaintiffs terminated their relationship with Spielfogel and retained a second
attorney, Salvador LaVina. They also
retained a third attorney, Robert Gilchrest, to litigate the consolidated
lawsuits.
In June 2005,
plaintiffs suffered an adverse judgment in the litigation, the court ordering
them to pay approximately $500,000 in damages and attorney fees.
Plaintiffs filed
the instant malpractice lawsuit against their attorneys on September 16, 2005. Plaintiffs alleged
Spielfogel failed to advise them it would be “extremely ill advised†to
foreclose on the subject note and trust deed, as doing so would expose them to
“liability for slander of title, legal fees of the defendants and other
parties, and causes of action by Markowitz against Kachlon for fraudulent and
wrongful foreclosure†and punitive damages.
Spielfogel “should have strongly and specifically advised Kachlon not to
pursue . . . the Trust Deed and Note foreclosure against Marko[w]itz
because plaintiffs would be liable for punitive damages and attorneys fees, and
other damages, if they lost the case, which was a very likely result. Particularly because Debra Markowitz,
herself, was an attorney, and Kachlon was wrong to file for foreclosure of a
Note already paid by Markowitz, getting sued for wrongful foreclosure was an
extremely foreseeable and adverse event, and Kachlon should have been advised
against it.†But Spielfogel advised
plaintiffs to pursue foreclosure aggressively, and otherwise “actively
participated in the pursuit of this ill conceived claim.†As a result, plaintiffs pursued nonjudicial
foreclosure against the Markowitzes, which course ultimately resulted in
liability for substantial damages.
Plaintiffs’ pursuit of nonjudicial foreclosure also compromised and
“pollut[ed]†the Kachlon action,
causing it to fail.
Plaintiffs
alleged that after they terminated their relationship with Spielfogel and
retained LaVina, LaVina negligently advised them to continue with the lawsuit
against the Markowitzes “because he had a ‘slam dunk’ case, with ‘nothing to
lose.’†He also advised plaintiffs to go
forward with foreclosure proceedings and negligently referred them to
Gilchrest. Gilchrest told plaintiffs
they “had nothing to worry about,†but then bungled the litigation and failed
to relay to them the Markowitzes’ posttrial, walk-away settlement offer.
Spielfogel moved
for summary judgment. He argued the
complaint was time barred because plaintiffs were put on notice of facts giving
rise to their legal malpractice claim more than one year before they filed the
malpractice lawsuit. They also suffered
actual injury more than one year before filing suit, when they retained
LaVina. Spielfogel further argued his
allegedly negligent representation of plaintiffs was not the proximate cause of
their damages because after his representation ended, both LaVina and Gilchrest
encouraged plaintiffs to continue nonjudicial foreclosure against the
Markowitzes.
In support of
the motion Spielfogel filed a separate statement setting forth 18 facts that
tracked plaintiffs’ complaint. The
evidence supporting the separate statement consisted solely of references to
the complaint and other court documents and Spielfogel’s declaration. Of note is fact No. 6, the only fact
plaintiffs disputed: “The Kachlons
incurred attorney fees and costs to defend the lawsuit filed by the Markowitzes
beginning in August of 2003.†The
evidence purporting to support the fact was paragraph 20 of plaintiffs’
complaint. There, plaintiffs alleged
LaVina took over the Kachlon action
in 2003 and advised them to continue to prosecute it, “thereby furthering the
involvement of the Kachlons in their case against Markowitz, . . .
creating even more legal fees incurred by the other parties to that case, all
of which [Mordechai] became responsible to pay due to an adverse judgment and
verdict against [him] in the underlying case, and thereby causing [Mordechai]
to suffer other damages and liabilities, as well, when [he] lost the trial on
this issue by suffering an unfavorable jury verdict at trial with Markowitz
. . . on all issues, proximately causing Kachlon approximately
$500,000 in damages, for attorneys fees, and other damages, and loss of his quantum
meruit claim for construction services.â€
Spielfogel inferred from paragraph 20 that plaintiffs incurred attorney
fees in 2003.
Plaintiffs
opposed Spielfogel’s motion. They argued
the attorneys who represented them after Spielfogel “mindlessly pursued
Spielfogel’s strategic blunders,†“jumped on the Spielfogel bandwagon by
proceeding incompetently and negligently,†and made no effort “to correct or
mitigate the effects of Spielfogel’s malpractice.†They argued they suffered no appreciable
injury, and did not know and had no reason to know about Spielfogel’s
malpractice, until June 2005, when an adverse verdict was announced in the
consolidated Kachlon/
months later.
Plaintiffs
supported the opposition mainly with Mordechai’s declaration. Mordechai declared Spielfogel represented him
with respect to both the contractor fee collection matter and the promissory
note collection. Spielfogel advised
Mordechai to institute nonjudicial foreclosure proceedings against the
Markowitzes and, once those proceedings were begun, encouraged him to pursue
them, as doing so would put pressure on the Markowitzes to settle the
Spielfogel, he was represented by LaVina.
When he began getting legal bills from LaVina, he told LaVina he “was
not interested in spending more money on the case,†but would perform
contractor work on his home.
As noted,
plaintiffs disputed only Spielfogel’s fact No. 6, which, citing only paragraph
20 of the complaint stated, “The Kachlons incurred attorney fees and costs to
defend the lawsuit filed by the Markowitzes beginning in August of 2003.†Plaintiffs argued nothing in the complaint
supported this fact, as they alleged only that they retained LaVina in 2003,
not that they incurred or paid attorney fees then.
In his reply,
Spielfogel argued Mordechai’s declaration that he retained LaVina “afterâ€
leaving Spielfogel, and sometime after that “began getting legal bills†from
him, was evidence that plaintiffs actually incurred attorney fees, and thereby
sustained injury, in 2003.
On December 19, 2011, the trial court entered an order granting Spielfogel’s motion for
summary judgment. It found no triable
issue existed as to whether the action was time barred because the
of Spielfogel’s alleged negligence more than one year before they filed their
malpractice suit, and they suffered injury when they instituted nonjudicial
foreclosure proceedings against the Markowitzes, also more than one year before
filing suit. The court also concluded
plaintiffs could not establish that Spielfogel’s negligence was the proximate
cause of their harm because it was undisputed that two attorneys in succession
succeeded him and encouraged continued pursuit of nonjudicial foreclosure.
Plaintiffs
appealed from the resulting judgment.
DISCUSSION
1. Standard
of Review
A “motion for
summary judgment shall be granted if all the papers submitted show that there
is no triable issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.â€
(Code Civ. Proc., § 437c, subd. (c); Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)
the burden shifts to the plaintiff to show that a triable issue of material
fact exists as to each cause of action.
(§ 437c, subd. (p)(2).) A triable
issue of material fact exists where “the evidence would allow a reasonable
trier of fact to find the underlying fact in favor of the party opposing the
motion in accordance with the applicable standard of proof.†(Aguilar
v. Atlantic Richfield Co., supra,
25 Cal.4th at p. 845.)
We review the
trial court’s ruling on a motion for summary judgment de novo. (
35, 60.) “We liberally construe the
evidence in support of the party opposing summary judgment and resolve doubts
concerning the evidence in favor of that party†(Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037),
accepting as true the facts shown by the evidence offered in opposition to
summary judgment and the reasonable inferences that can be drawn from them (
Cal.App.4th 1376, 1385). If the material
facts are in conflict, the factual issues must be resolved by trial. (Hernandez
v. Department of Transportation (2003) 114 Cal.App.4th 376, 382.)
2. Whether
Plaintiffs’ Legal Malpractice Action is Time Barred
The limitations
period for legal malpractice is set forth in section 340.6, which states, in
relevant part: “(a) 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. . . . [T]he period
shall be tolled during the time that . . . [¶] (1) The plaintiff has not sustained actual
injury.†(§ 340.6, subd. (a)(1).)
“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. . . . [D]etermining when actual injury occurred is
predominantly a factual inquiry.
[Citations.] When the material
facts are undisputed, the trial court can resolve the matter as a question of
law in conformity with summary judgment principles.†(Jordache
Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739,
751 (Jordache).) One example of damages compensable in a
malpractice action are attorney fees incurred to defend a third party
lawsuit. (Id. at p. 759.)
Spielfogel
argues plaintiffs suffered actual injury when they incurred attorney fees and
costs to defend the lawsuit filed by the Markowitzes. Again citing paragraph 20 of plaintiffs’
complaint, Spielfogel argues plaintiffs incurred these attorney fees in August
2003, when they retained LaVina. The
argument is without merit. Plaintiffs
alleged in paragraph 20 only that they retained
LaVina in 2003, not that they incurred attorney fees then. Spielfogel presented no evidence, for example
fee invoices or deposition testimony, indicating the date plaintiffs first
became indebted to LaVina for attorney fees.
Spielfogel
argues Mordechai’s own declaration filed in opposition to the motion for
summary judgment establishes that he incurred fees to LaVina upon that
attorney’s retention. The argument is
without merit. Mordechai stated only
that he retained LaVina after Spielfogel and at some point began getting
invoices from him. He did not state when
LaVina performed any work on his behalf or when he received the invoices.
Spielfogel
argues it was plaintiffs’ burden to establish when they incurred fees to
LaVina, given that it is undisputed they retained him in 2003. He offers no principle or precedent for
shifting the burden in that circumstance to the party opposing summary
judgment, and we are aware of none.
Citing
Cal.App.4th 217 (Foxborough), Spielfogel argues that exposure to liability itself
constitutes actual injury. The argument
is meritless. As stated, the test for
actual injury is whether the plaintiff has sustained damages compensable in a
malpractice action. (
No precedent of which we are aware would permit recovery of damages in a
malpractice lawsuit for mere exposure to third party litigation.
Foxborough is
distinguishable. There, the malpractice
victim retained an attorney to secure an automatic right to annex
property. Through the attorney’s
negligence, the automatic right was lost.
The client then “had to resort to the more onerous, expensive, and
unpredictable task of obtaining annexation†by other means, the very situation
it hired the attorney to avoid. (26
Cal.App.4th at p. 227.) The court held
that “when malpractice results in the loss of a right, remedy, or interest,
there has been actual injury regardless of whether future events may affect the
permanency of the injury or the amount of monetary damages eventually
incurred.†(Ibid, italics added.)
Even accepting
for purposes of argument the Foxborough
court’s dictum that imposition of a
liability constitutes actual injury for purposes of the tolling statute, here
no liability was imposed on plaintiffs until 2005, when they suffered an
adverse judgment in third party litigation.
Spielfogel cites
Apple Valley Unified School Dist. v.
Vavrinek, Trine, Day & Co. (2002) 98 Cal.App.4th 934, an accounting
malpractice case, for the proposition that “a party’s alteration of its legal
position in reliance on its counsel can constitute actual injury even though
the party may be able to avoid or reduce the injury through subsequent legal
action.†(Id. at p. 951.) The
distinction between that case and this is the limitations statute
involved. Apple Valley dealt with section 339, subdivision 1, and its
two-year limitations period for suits “upon a contract, obligation or liability
not founded upon an instrument of writing . . . .†(§ 339, subd. 1; Apple Valley, supra, 98
Cal.App.4th at p. 941.) “The
standards for beginning that limitations period result from judicial decisions
rather than legislative enactment.
[Citations.] In section 340.6,
the Legislature established a detailed, explicit, and exclusive scheme for
commencing and tolling the legal malpractice limitations periods. The Legislature did not establish a
comparable scheme for section 339.†(
Therefore, Apple Valley does
not provide rules for legal malpractice actions. (See Jordache,
at p. 764.)
3. Causation
The trial court
granted summary judgment on the independent ground that plaintiffs could not
establish causation because the negligence of LaVina and Gilchrest was an
intervening, superseding cause that severed the causal nexus between
Spielfogel’s negligence and plaintiffs’ damages. We disagree.
“To state a
cause of action for legal malpractice, a plaintiff must plead ‘(1) the duty of
the attorney to use such skill, prudence, and diligence as members of his or
her profession commonly possess and exercise; (2) a breach of that duty; (3) a
proximate causal connection between the breach and the resulting injury; and
(4) actual loss or damage resulting from the attorney’s negligence.’ [Citation.]
To show damages proximately caused by the breach, the plaintiff must
allege facts establishing that, ‘but for
the alleged malpractice, it is more likely than not the plaintiff would have
obtained a more favorable result.’
(Citations.)†(
170, 179.)
Generally, “if
the risk of injury is reasonably foreseeable, the defendant is liable. An independent intervening act is a
superseding cause relieving the actor of liability for his negligence only if
the intervening act is highly unusual or extraordinary and hence not reasonably
foreseeable. [Citations.] Reasonable foreseeability in this context is
a question for the trier of fact.†(
174, 178.) The failure of a subsequent
actor to prevent harm threatened due to a former actor’s negligent conduct is
not a superseding cause of harm unless circumstances arise that cause the duty
to prevent harm to shift from the former to the subsequent actor. (Rest.2d Torts, § 452.) Specifically, a negligent attorney is not
relieved of the consequences of his or her lack of care because a subsequently
retained attorney could have avoided the injury had he or she not also been
negligent. (Cline v. Watkins, at p. 180.)
Here, nothing in
the record—no lapse of time or other circumstance—suggests Spielfogel’s duty to
prevent harm to his clients shifted to successor counsel upon their
retention. Spielfogel was therefore not
relieved of the consequences of his alleged negligence, even though LaVina and
Gilchrest might have avoided plaintiffs’ injury had they not been negligent.
4. Conclusion
In sum, triable
issues exist as to whether plaintiffs suffered actual injury more than one year
before filing their malpractice lawsuit and whether Spielfogel’s conduct caused
their injury. Therefore, summary
judgment was improper.
The
judgment is reversed. Appellants are to
recover their costs on appeal.
NOT
TO BE PUBLISHED.
CHANEY,
J.
We concur:
ROTHSCHILD, Acting P. J.
JOHNSON, J.
name="_ftn1" title="">
[1] For clarity, we will
sometimes refer to principals by their first names.
name="_ftn2" title="">
[2] All undesignated statutory
references are to the Code of Civil Procedure.
