Kachlon v. Spielfogel CA2/1 ( 2016 )

Filed 1/6/16 Kachlon v. Spielfogel CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 ONE
MORDECHAI KACHLON et al., B259872
(Los Angeles County
Plaintiffs and Appellants,
Super. Ct. No. BC339973)
v.
DANIEL J. SPIELFOGEL,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los Angeles County, Mark V.
Mooney, Judge. Affirmed.
Law Offices of Stewart Levin, Stewart J. Levin, Roee Kaufman for Plaintiffs and
Appellants.
Nemecek & Cole, Jonathan B. Cole, Mark Schaeffer, David B. Owen for
Defendant and Respondent.
___________________________________
Beginning in 2002, three attorneys in succession handled legal matters for
plaintiffs that in 2005 resulted in a substantial judgment against them. Plaintiffs filed this
legal malpractice action against the attorneys in September 2005. 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 it was undisputed plaintiffs were injured, and their cause of action therefore
accrued, outside the applicable one-year limitations period. We reversed, concluding no
evidence indicated plaintiffs sustained an injury more than one year before filing suit.
We held that although a compensable injury could include attorney fees incurred to
rectify a prior attorney’s mistakes, no evidence—for example fee invoices or deposition
testimony—showed when plaintiffs first became indebted to any successor attorney.
(Kachlon v. Spielfogel, Dec. 31, 2012, B238406 [nonpub. opn.] (Kachlon I).)
After remand, the first attorney again moved for summary judgment, this time
presenting a fee invoice from the second attorney that indicated plaintiffs incurred fees
beginning in October 2003. The trial court granted the motion, finding the invoice
indicated plaintiffs were injured in 2003, more than one year before they filed suit in
2005, and their causes of action were therefore time-barred.
We affirm. The successor attorney’s fee invoice shows plaintiffs became indebted
to him by December 31, 2003 at the latest, more than one year before they filed the
instant lawsuit. Their causes of action therefore accrued on that date, and they waited too
long to pursue them.
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.) We will also rely on
some background facts recited in our opinion in Kachlon I, as the parties rely exclusively
on that opinion for those facts.
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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
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their home and for a personal loan he had made. These latter debts were 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.
Instead, Spielfogel pursued extensive nonjudicial foreclosure on the deed of trust
that had secured the $53,000 debt. This effort ultimately failed when the trustee
discovered the debt had been satisfied.
In August 2003, the Markowitzes sued plaintiffs for damages arising from the
foreclosure proceedings, alleging plaintiffs recorded 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. Los
Angeles County, 2003, No. BC310492); the Markowitz action.) They alleged that
1
For clarity, we will sometimes refer to principals by their first names.
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plaintiffs falsely 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 the title. The Markowitzes sought general
damages, punitive damages, injunctive relief and attorney fees.
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The Markowitz and Kachlon actions were consolidated on October 10, 2003.
In October 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 amount of
approximately $500,000 in damages and attorney fees.
Plaintiffs filed the instant malpractice lawsuit against their three prior attorneys on
September 16, 2005. As to Spielfogel, plaintiffs alleged he 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,
2
On our own motion we take judicial notice of the trial court’s docket, available at
http://www.lacourt.org/casesummary/ui/casesummary.aspx?#EVT, last accessed on
December 3, 2015.
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plaintiffs pursued nonjudicial foreclosure against the Markowitzes, which ultimately
resulted in their liability for substantial damages. Plaintiffs’ pursuit of nonjudicial
foreclosure also compromised and “polluted” the Kachlon action, causing it to fail.
Spielfogel moved for summary judgment, arguing the complaint was time-barred
because the Markowitz complaint put them 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. In support of the motion, Spielfogel cited paragraph 20 of plaintiffs’ complaint,
where they alleged LaVina took over the Kachlon action in 2003. Spielfogel inferred
from paragraph 20 that plaintiffs also incurred attorney fees in 2003.
The trial court agreed, and entered an order granting Spielfogel’s motion for
summary judgment on the ground that no triable issue existed as to whether the action
was time-barred because the Markowitz complaint notified plaintiffs of Spielfogel’s
alleged negligence more than one year before they filed their malpractice suit, and they
suffered injury when they retained LaVina.
We reversed, concluding that merely retaining an attorney did not constitute an
injury absent some showing that fees were incurred. We stated, “Spielfogel presented no
evidence, for example fee invoices or deposition testimony, indicating the date plaintiffs
first became indebted to LaVina for attorney fees.” (Kachlon I, at p. *13.)
After remand, Spielfogel obtained a copy of plaintiffs’ invoice from LaVina and a
declaration from LaVina himself, and then moved again for summary judgment on the
ground that the invoice and declaration proved plaintiffs became indebted to LaVina
beginning in October 2003. LaVina declared he agreed on October 2, 2003 to represent
plaintiffs in the Kachlon action, and that the invoice “sets forth all tasks performed by
[him] on behalf of, and fees incurred to [him] by, the Kachlons from October 2, 2003
through December 31, 2003.” The invoice itself contains several line items that describe
services performed, hours worked, and fees incurred. For example, in October,
November and December of 2003, LaVina worked on a “demurrer,” an “answer,” a
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“motion to dismiss,” and an opposition to a “preliminary injunction,” incurring fees that
ultimately totaled approximately $28,000 by December 23, 2003. Plaintiffs paid $5,000
on October 3, 2003, and $2,500 on November 4.
The trial court granted summary judgment on the ground that plaintiffs sustained
an actual injury in 2003 yet waited more than a year, until 2005, to file their lawsuit. The
suit was therefore time-barred.
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.” (Code Civ. Proc., § 437c, subd. (c); Aguilar v.
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Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850.) Once the moving defendant has met
its burden, the burden shifts to the plaintiff to show that a triable issue of material fact
exists as to each cause of action. (§ 437c, subd. (c).) 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.
(Buss v. Superior Court (1997) 16 Cal. 4th 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 (Spitzer v.
Good Guys, Inc. (2000) 80 Cal. App. 4th 1376, 1385). If the material facts are in conflict,
3
All undesignated statutory references are to the Code of Civil Procedure.
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the factual issues must be resolved by trial. (Hernandez v. Dept. of Transportation
(2003) 114 Cal. App. 4th 376, 382.)
2. 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.)
Attorney fees incurred to defend against a third party lawsuit are compensable damages
in a malpractice action predicated on attorney negligence giving rise to the lawsuit. (Id.
at p. 759.)
Plaintiffs discovered Spielfogel’s alleged wrongful act or omission in 2003, when
they received the Markowitz complaint detailing exactly how and why their attorney’s
actions had been wrongful. The limitations period began then, but was tolled so long as
they sustained no actual injury.
Spielfogel presented evidence that plaintiffs suffered actual injury in 2003, when
they incurred attorney fees and costs to defend against the Markowitz action. LaVina
declared he represented plaintiffs beginning in October 2003, and his invoice indicates
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they incurred attorney fees in the amount of approximately $28,000 by December 23,
2003. The one-year limitations period began running at that time but plaintiffs waited
more than a year to sue Spielfogel. Their action was therefore time-barred.
Plaintiffs argue the Markowitz complaint gave them no notice of Spielfogel’s
negligence because they did not and could not read or understand it, having limited
English skills. The argument is without merit. An action against an attorney for legal
malpractice must 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.” (§ 340.6, subd. (a), italics added; see Fox v. Ethicon Endo-
Surgery, Inc. (2005) 35 Cal. 4th 797, 807-808 [inquiry notice starts the limitations period
running].) A reasonably diligent non-English speaker who receives a complaint and
retains an attorney to defend against it will ask the attorney what the complaint alleges.
Plaintiffs argue no evidence suggests they incurred attorney fees in October 2003
because LaVina’s declaration indicates they incurred fees only in the Kachlon action, not
the Markowitz action. The argument is without merit. Although LaVina declared
plaintiffs originally retained him to prosecute the Kachlon action, he also stated his
invoice set forth “all tasks” he performed for them. The invoice contains several line
items that describe services performed, hours worked, and fees incurred with respect to
the Markowitz action, including work on a demurrer, an answer, and an opposition to a
preliminary injunction. Only the Markowitzes, not the Kachlons, sought injunctive relief,
and in their opposition to Spielfogel’s summary judgment motion plaintiffs admitted the
Markowitzes sought a preliminary injunction as well.
In sum, no triable issues exist as to whether plaintiffs suffered actual injury more
than one year before filing their malpractice lawsuit and whether they were put on inquiry
notice that Spielfogel’s conduct caused that injury. Therefore, summary judgment was
proper.
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DISPOSITION
The judgment is affirmed. Respondent is to recover his costs on appeal.
NOT TO BE PUBLISHED.
CHANEY, J.
We concur:
ROTHSCHILD, P. J.
JOHNSON, J.
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