Jordan v. Pollet, Richardson & Patel

Filed 9/16/08 Jordan v. Pollet, Richardson & Patel CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

APPEAL from a judgment of the Superior Court of Los Angeles County.

John L. Segal, Judge. Affirmed.

Hines Smith Carder, Kevin L. Smith and Tom N. Tran for Plaintiffs and Appellants.

Richardson & Patel, Luan K. Phan and Victor T. Fu for Defendant and Respondent.

_______________

In August 2006, appellants Connie Jordan, Chris Carmichael and XS Network, Inc. sued respondent Pollet, Richardson & Patel ("Pollet"), a law corporation, for malpractice, breach of contract, intentional and negligent misrepresentation, and breach of fiduciary duty, on factual allegations concerning Pollet's 2002 representation of appellants in Holland v. XS Network.

Appellants' complaint alleged that they hired Pollet in March 2002 and relied on Pollet to determine whether their insurance policies covered the Holland action and to tender claims to any insurer, but that Pollet failed in those duties. Further, Pollet falsely represented that it was panel counsel to the insurer, so that the insurer would be responsible for all fees. Appellants alleged that they first learned of the malpractice in January 2006, when, in a telephone conversation with the insurer (Carolina Casualty Insurance), they learned that Pollet was not panel counsel and had not submitted its bills to Carolina, and that Carolina would not pay any of Pollet's bills.

Pollet moved for summary judgment on the ground that all causes of action were barred by the statute of limitations. It was undisputed that Pollet tendered Holland to Carolina on September 5, 2002. Pollet's motion was based on Carolina's letter in response, dated September 23, 2002.[1] Pollet contended that the letter gave appellants constructive notice of their claims, so that all claims were barred under Code of Civil Procedure sections 340.6 and 338, subdivision (d). The trial court agreed, as do we.[2]

The letter is from Monitor Liability Manager, on behalf of Carolina, to Jordan at XS Network. It reads, in pertinent part, "Pursuant to the terms and conditions of the Policy, Monitor appoints the law firm of Gordon & Rees to defend XS Network in this matter." The letter also provides the name of the Gordon & Rees lawyer in charge, Roger Mansukhani, with the promise that he will "contact you shortly to obtain the necessary materials to defend XS Network in this matter."

The letter then quotes policy provisions which provide that "An insured shall not

. . . incur Costs of Defense without the Insurer's prior written consent . . ." and give the Insurer both the right and duty to defend any claim. The letter then states "Based on the foregoing, no fees or costs incurred as a result of the Pollet Richardson & Patel law firm's representation will be reimbursedby Monitor. By copy of this letter, Monitor expressly directs the Pollet Richardson & Patel firm to transfer this matter to Mr. Mansukhani immediately and to further cooperate in the necessary substitution of attorneys to represent XS Network in this matter."

Gordon & Rees substituted as counsel in Holland on October 4, 2002. The substitution forms, proffered by Pollet, are signed by Carmichael for himself and Jordan for herself and for XS Network. (She is President of XS.) The forms state that Mansukhani of Gordon & Rees is substituted "in the place and stead" of Pollet.[3]

Pollet also proffered an exchange of emails between Jordan and Pollet lawyer Addison Adams, concerning fees. On September 24, Jordan wrote "You are also quite aware that we do have D & O insurance as [Pollet lawyer Adam Grant] has received a letter from the insurance company," and "I will contact the insurance company's attorney and see what my options are."

Pollet proposed as undisputed that "by letter dated September 23, 2002, the insurance carrier notified [appellants] that it had agreed to provide coverage and a defense . . ." in Holland. Appellants agreed that the fact was undisputed.

Pollet also proposed as undisputed that the letter notified appellants that Gordon & Rees had been appointed to represent them, and that (and here Pollet quoted the letter) Pollet's fees would not be reimbursed.

Appellants responded "disputed to the extent it purports to confirm Plaintiffs' knowledge of who was the true insurance company appointed counsel," and "disputed to the extent it purports to confirm Plaintiffs' knowledge that Defendant's fees and costs incurred before the letter would not be reimbursed." Appellants wrote that based on Pollet's misrepresentations, they believed that both firms would represent them and that Pollet had made arrangements with Carolina to have its bills paid by Carolina.

In support, appellants proffered declarations from Carmichael and Jordan. Both declared that in numerous telephone conversations between March 2002, and September 2002, Pollet said that although appellants had to pay legal fees, it was because Pollet had not yet received payment from the insurance company, and that appellants would be reimbursed for any amounts over $25,000.

Neither declaration directly addresses the September 23, 2002 letter. Instead, both Jordan and Carmichael declared that "when [Pollet] informed me in or around September 2002 that new attorneys were taking over the Holland Action in October 2002, I did not believe that [Pollet's] arrangement with the insurance company would be effected; instead, I thought that the insurance company was only making an administrative move in assigning new attorneys and that both [Pollet] and the new attorneys were working for the insurance company."

Both also declared that because of Pollet's continuing representations, they believed that the acts Pollet took to collect fees, including a lawsuit for fees, were "procedural or administrative requirements that [Pollet] had to undertake in order to receive payment from the insurance company."

At oral argument on the motion, appellant's counsel proffered a supplemental declaration from Jordan. In it, she declared that although the September 23, 2002 letter was produced by appellants, it was obtained from Monitor's files, and that the letter "had never been in our files, and was not personally received by me."

The trial court found that Code of Civil Procedure section 340.6 applied to all causes of action except the cause of action for intentional misrepresentation, which was governed by Code of Civil Procedure section 338, subdivision (d). The trial court then found that the September 23, 2002 letter "was sufficient to put plaintiffs on constructive or inquiry notice that defendant was not a 'panel' attorney (because the insurer was substituting a law firm that was) and that the insurer would not pay for any of defendant's fees (because the insurer expressly stated that it would not.) . . . The information in the September 23, 2002 letter was sufficient to put a reasonable person on notice to investigate whether defendant was a 'panel' attorney and whether there was going to be any issue at all about any of the fees incurred by defendant at any time in representing plaintiffs. The letter also put plaintiffs on constructive or inquiry notice that defendant may not have properly investigated the potential of insurance coverage and may not have timely tendered the federal action (because the tender by defendant and acceptance by the insurer occurred at least six months after defendant's representation commenced.) Plaintiffs may not have known the precise details of their claims in September and October 2002, but they knew enough of the facts to put plaintiffs on constructive notice." The court concluded that all causes of action were barred by the statute of limitations.

Appellants do not challenge the trial court's finding that Code of Civil Procedure sections 340.6 and section 338, subdivision (d) govern their causes of action or that time began to run when they had constructive notice of their claims. Instead, they contend that there is a triable issue of fact on whether they had constructive notice in September 2002.

Appellants first contend that there is a triable issue of fact on whether Jordan ever received the letter. They cite her supplemental declaration. We see no triable issue.

First, Pollet objected to the declaration, and the parties agree that the court's failure to discuss the declaration in its lengthy and careful Order means that the declaration was excluded. Appellants offer no authority for the proposition that the court erred by excluding the declaration, and we do not believe that it did. The declaration was untimely, and appellants made no request for a continuance. (G. E. Hetrick & Associates, Inc. v. Summit Construction & Maintenance (1992) 11 Cal.App.4th 318, 325, fn. 4.)

Moreover, the supplemental declaration would not create a triable issue of material fact even if it had been considered. It was undisputed that the September 23 letter "notified" appellants of the information contained therein. That means that appellant received the letter -- otherwise, it would not have notified them of anything.

In their reply brief, appellants argue that the undisputed fact the letter "notified" them that Carolina would provide coverage does not mean that they received the letter, but only "suggests what the insurance carrier did or the intended impact of the letter."

The argument is entirely unpersuasive. "Notified" does not mean "intended." Appellants admitted that the letter was received, and Jordan's belated statement that the letter was not "personally received" by her does not change that.

Further, it was undisputed that appellants acted in accord with that information, substituting Gordon & Rees in Holland and writing emails referring to an insurance company letter and insurance company lawyers.

Prior to the supplemental declaration, appellants did not contend that the letter was not received. Instead, their theory was that the letter was not understood. Similarly, on appeal they argue that the letter is ambiguous and did not provide constructive notice. They argue that while the letter says that Pollet's fees would not be reimbursed, "nowhere in the letter does it indicate that this would apply to [Pollet's] fees and costs prior to the insurance company's issuance of the letter." Thus, they conclude, the letter is ambiguous as to pre-tender fees and costs and there is a triable issue of fact on notice.

This argument does not assist appellants. The statute of limitations test is whether the plaintiff discovered or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission. (Code Civ. Proc., 340.6.) An ambiguity in the September 23, 2002 letter would only mean that appellants should have exercised diligence and determined its meaning.

Disposition

The judgment is affirmed. Respondent to recover costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

ARMSTRONG, J.

I concur:

TURNER, P. J.

MOSK, J., Concurring

I concur in the judgment.

The record does not reflect if the supplemental declaration was ignored or excluded, and if excluded, the ground for such exclusion. There is no ruling on the objection to that declaration. Thus, I would not rely on an assumed exclusion of the declaration. (Demps v. San Francisco Housing Authority (2007) 149 Cal.App.4th 564, 578; see Ann M. v. Pacific Shopping Center (1993) 6 Cal.4th 666, 670, fn. 1.)

MOSK, J.

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[1]In a belt-and-suspenders argument, Pollet also contended that appellants had actual knowledge in June or July of 2005, citing statements made by appellants and their counsel in Pollet's lawsuit against appellants for fees. Specifically, in appellants' motion to set aside the default judgment Pollet obtained in that action, Jordan, Carmichael, and their counsel declared that in June or July of 2005, they discussed Pollet's failure to tender defense of the Holland action to the insurance company. The trial court agreed with Pollet on this point, too. Appellants challenge the ruling, but we do not address the arguments. The belt holds, and there is no need to review the suspenders.

[2]A defendant meets its burden on summary judgment by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the action. (Code Civ. Proc., 437c, subd. (o); Union Bank v. Superior Court (1995) 31 Cal.App.4th 573.) We review the trial court's decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476-477.)

[3]Pollet proffered as undisputed fact that appellants executed the substitution forms. Appellants purported to dispute the fact, contending that Pollet's evidence did not support it. That evidence consisted of copies of the forms with District Court filing stamps, and the declaration of counsel that the copies were true and correct copies. That evidence is sufficient to establish the fact.