Flake v. Neumiller & Beardslee ( 2017 )

Filed 1/31/17; pub. order 3/2/17 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(San Joaquin)
----
STANLEY FLAKE, Individually and as Trustee, etc., C079790
Plaintiff and Appellant, (Super. Ct. No. 39-2013-
00303351-CU-PN-STK)
v.
NEUMILLER & BEARDSLEE et al.,
Defendants and Respondents.
Although the underlying litigation was apparently quite thorny, the issue presented
by this appeal in a legal malpractice case is less complicated. Former counsel moved to
withdraw from representing a client, alleging another attorney had agreed to handle--and
was already handling--postjudgment motions, and that the other attorney would also
handle the appeal of an adverse judgment. The client sued former counsel for
malpractice more than one year after the motion to withdraw was made, but less than one
year after the motion was granted. The question before us is whether the trial court
properly granted summary judgment to former counsel based on the one-year statute of
1
limitation provided by Code of Civil Procedure section 340.61 on the ground that the
client could not have had an objectively reasonable expectation that former counsel was
continuing to represent him after the motion to withdraw had been served. We conclude
the answer is “yes.”
Once the former counsel told the client, via the motion to withdraw, that the case
had already been handed off to another attorney, the client was on notice that former
counsel was no longer working for him. As we will explain, because this lawsuit was
filed more than one year after that time, no triable issue of fact remains as to the statute of
limitation defense, and we shall affirm the judgment.
BACKGROUND
Stanley Flake and other underlying plaintiffs (including attorney Richard Carroll
Sinclair) sued various underlying defendants in the Stanislaus County Superior Court
over the Fox Hollow real estate development. They lost at trial in 2009. At that trial, the
plaintiffs were represented by the defendants in this malpractice suit, specifically, Daniel
Truax and Lisa Blanco Jimenez, attorneys with defendant firm Neumiller & Beardslee
(collectively, Neumiller except as noted).2
Neumiller filed a motion to be relieved as counsel on November 25, 2009, in part
alleging that Sinclair had agreed to handle the appeal and three postjudgment motions,
and “has been handling these motions.” (Italics added.) Neumiller alleged the “clients
have stated they are not opposed to the withdrawal.” The motion was not opposed, and
was granted on January 7, 2010.
1 Further undesignated statutory references are to the Code of Civil Procedure.
2 The trial court in the underlying case described the trial as a “morass” in a sometimes
scathing 25-page statement of decision, dated August 17, 2009. Flake asserts without
dispute that the underlying trial lasted 36 days. Without citation to the record, the parties
agree that Jimenez was dismissed from this lawsuit. We accept as true that fact agreed in
the briefing. (See County of El Dorado v. Misura (1995) 33 Cal.App.4th 73, 77.)
2
In a letter dated January 11, 2010, Truax informed the underlying plaintiffs:
“As you know, by order of the court served upon you last week, our firm is
no longer your attorney’s [sic] of record in this matter. I think an explanation
might be helpful. As you know, over a month ago, Richard [Sinclair] circulated
for signature consents to substitutions of attorneys. The consents were signed by
you and our office and returned to Richard’s office for signature by Richard and
filing. Richard never filed those consents, thus, our motion to be relieved as
attorneys was necessary and was . . . granted on January 7, 2010.”
Flake sued Neumiller for legal malpractice on January 6, 2011.3 He alleged that
he and the other underlying plaintiffs had divergent interests, creating a “nonwaivable
conflict” for Neumiller to represent them all, and Neumiller mistakenly characterized
Flake as a plaintiff in his personal capacity, instead of as a trustee of the Capstone Trust,
resulting in Flake’s exposure to personal liability in the form of an attorney fee and cost
award to the other side (allegedly $750,000, plus the cost of hiring counsel to represent
him on appeal from the adverse judgment).
The summary judgment motion urged that upon receipt of the motion to withdraw
and associated papers, served on Flake both individually and as trustee of the Capstone
Trust, and Flake’s failure to timely oppose the motion (by December 22, 2009), Flake
“objectively had no expectation” that Neumiller would provide further legal services.
Because this suit was filed more than one year after any objectively reasonable
expectation ceased, it was barred by section 340.6.
Flake’s opposition hinged on the proposition “that an attorney’s representation
does not end until the agreed tasks or events have occurred, the client consents to
termination or a court grants an application by counsel for withdrawal.” (App. 174)
3 Flake dismissed his first suit pursuant to a tolling agreement with Neumiller, and then
filed this second suit on October 24, 2013. The parties treat the important filing date for
purposes of this appeal as that of the first suit.
3
Because he filed this malpractice suit less than one year after the motion to withdraw in
the underlying case was granted, Flake contended his malpractice suit was timely.
In opposition to the summary judgment, both Flake and Sinclair provided
declarations. Flake declared he had not consented to Neumiller’s withdrawal, contrary to
the statement in Truax’s January 11, 2010, letter. Although Flake did not recall receiving
the motion to withdraw, he did not deny receiving it. He declared that he thought Truax
was still representing him, but also declared that because he (Flake) had been sued in a
representative capacity, he was not concerned about any personal liability, based on
advice he had received from Truax.
Specifically, Flake declared as follows: “I do not have a specific recollection of
receiving [the notice of motion, motion to withdraw, and supporting declaration by
Truax], however, I do not deny that I received them. My state of mind from
November 25, 2009 through January 7, 2010, was that Mr. Truax was continuing to and
was going to continue to represent me. Mr. Truax had told me, after the trial, and before
November 25, 2009, that he did not believe that attorney’s fees would be awarded against
any of his clients, and that if attorney’s fees were awarded . . . that I would not be subject
to the attorney’s fee award, because I was not involved in the matters upon which the
Court could base an award of attorney’s fees.” Until January 7, 2010, “I was not
concerned about the litigation, because my state of mind was that the case had been tried,
we had lost, and I was basically done with the litigation. I was not responsible for nor
had I paid any costs [or] attorney’s fees to my attorneys. My state of mind was that the
matter had been lost and I was not going to be responsible [or] liable for any costs or
attorney’s fees, or payments to any party to the litigation.”
Sinclair declared that at various times in the underlying case he had represented all
of the plaintiffs, including Flake. After the adverse judgment, he did not speak with
Flake about Flake substituting Neumiller out of the case, or “any potential or actual
changes in counsel regarding any post trial motions or any tasks that needed to be
4
performed before an appeal was to be filed by appellate counsel.” Sinclair denied
statements in the letter Truax sent plaintiffs on January 11, 2010, to the effect that
Sinclair had circulated consent to substitution forms but failed to file them.
The trial court granted summary judgment, finding that Flake had no objectively
reasonable expectation that Neumiller would continue to perform legal services after it
served Flake with the motion to withdraw, thus, this suit was untimely.
After a judgment was entered in conformity with the order granting summary
judgment, Flake timely filed this appeal.
DISCUSSION
In reviewing an order granting summary judgment we ascertain the pleaded
issues--which outline the perimeter of materiality, view the movant’s evidence strictly,
and view the opponent’s evidence liberally--to determine if triable issues of material fact
remain. (See FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-
382.) “[W]e determine with respect to each cause of action whether the defendant
seeking summary judgment has conclusively negated a necessary element of the
plaintiff’s case, or has demonstrated that under no hypothesis is there a material issue of
fact that requires the process of a trial.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th
317, 334.) However, we may bypass the strict “three-step paradigm for summary
judgments” where, as here, there are no disputes about the record or the legal issues
implicated. (Crow v. State of California (1990) 222 Cal.App.3d 192, 196; see Jimenez v.
Roseville City School Dist. (2016) 247 Cal.App.4th 594, 597.)4
4 Neumiller filed objections to some of Flake’s evidence, but the trial court did not rule
on them. The failure to obtain a ruling does not forfeit objections to them on appeal
following a summary judgment motion (see § 437c, subd. (q)), but because the objections
are not separately headed or briefed on appeal, we do not consider them. (See Reid v.
Google, Inc. (2010) 50 Cal.4th 512, 534 [pre-statutory change in procedure, holding that
failure to obtain ruling does not of itself forfeit objections on appeal, but objector must
“renew the objections in the appellate court”].)
5
As relevant to this case, section 340.6 provides as follows:
“(a) An action against an attorney . . . 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. . . . [I]n no event
shall the time . . . exceed four years except that the period shall be tolled during
the time that any of the following exist:
“[¶] . . . [¶]
“(2) The attorney continues to represent the plaintiff regarding the
specific subject matter in which the alleged wrongful act or omission occurred.”
Flake does not dispute that he was on at least inquiry notice of alleged malpractice
as of the time of the adverse underlying judgment, well over one year before this suit was
filed.5 Instead, as in the trial court, he contends the tolling provision provided by section
340.6, subdivision (a)(2), the so-called “continued representation” rule, applied until
Neumiller’s motion to withdraw had been granted.
As in the trial court, Neumiller’s theory on appeal is that no reasonable client
could objectively believe Neumiller was still providing legal services after receiving the
motion to withdraw alleging that the case had been handed off to successor counsel
(Sinclair). Sinclair was to handle the appeal of the underlying case and was already
handling the three then-pending postjudgment motions, without objection from
Neumiller’s clients.
Neumiller has the better argument. The end of an attorney-client relationship is
not always signaled by a bright line, but settled authorities outline the relevant rules.
Generally, an attorney has a right to end the attorney-client relationship, but when
litigation remains pending, the court has control over such termination, in part to ensure
5 If Flake had intended to dispute this, his failure to head and argue the point forfeits it
on appeal. (See Loranger v. Jones (2010) 184 Cal.App.4th 847, 858, fn. 9.)
6
that the client is not harmed--for example, by abandonment of counsel on the eve of trial.
An attorney cannot end the relationship simply by “ceas[ing] to act” as counsel (§ 286).
(See 1 Witkin, Cal. Procedure (5th ed. 2008) Attorneys, §§ 68-70, pp. 103-106; § 284,
subd. 2 [attorney may be changed “Upon the order of the court, upon the application of
either client or attorney, after notice from one to the other”]; De Recat Corp. v. Dunn
(1926) 197 Cal. 787, 791 [absent mutual consent of the parties, the relationship must be
terminated by the court].) In ruling on a motion to withdraw, a trial court exercises
discretion. (See, e.g., Manfredi & Levine v. Superior Court (1998) 66 Cal.App.4th 1128,
1133, 1136; Linn v. Superior Court (1926) 79 Cal.App. 721, 725-726.) This stems from
the court’s “solemn duty to maintain professionalism and ethics.” (Manfredi, at p. 1132;
see Mandell v. Superior Court (1977) 67 Cal.App.3d 1, 4.)
Therefore, until a motion to withdraw is granted, it cannot be certain that the trial
court will sever the attorney-client relationship. Based on this fact, Flake contends an
attorney owes duties to the client “until a motion to withdraw is granted.” But on
inspection, Flake’s view is both under- and overinclusive.
It is underinclusive because attorneys owe certain duties to former clients after
withdrawal, such as the duty “at every peril to himself or herself to preserve the secrets,
of his or her client.” (Bus. & Prof. Code, § 6068, subd. (e)(1); see People v. Baylis
(2006) 139 Cal.App.4th 1054, 1065.) Further, a former attorney must cooperate with
successor counsel, and not act so as to prejudice a former client. (See, e.g., In the Matter
of Riley (Review Dept. 1994) 3 Cal. State Bar Ct. Rptr. 91, 115.)
It is overinclusive because the formal act of withdrawing does not demarcate the
end of the professional relationship in the context of the legal malpractice statute of
limitation. “[T]he failure to formally withdraw as attorney of record, standing alone, will
not toll the statute of limitations under the rubric of continued representation.”
(Shapero v. Fliegel (1987) 191 Cal.App.3d 842, 846, italics added; see GoTek Energy,
Inc. v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1247, fn. 2 (GoTek) [“the
7
acts in question—withdrawing as attorneys of record and advising foreign attorneys of
new patent counsel—do not constitute the provision of legal services”]; see also Beal
Bank, SSB v. Arter & Hadden, LLP (2007) 42 Cal.4th 503, 514, fn. 8 [tolling lasts only so
long as attorney works for the client on the same “specific subject matter”; “[h]ad the
Legislature intended preservation of the attorney-client relationship as a dispositive trump
card, it would not have so limited the scope of the tolling exception”].)
A recent case summarizes the general rule, albeit on different facts, as follows:
“In deciding whether an attorney continues to represent a client, we do not
focus ‘ “on the client’s subjective beliefs” ’; instead, we objectively examine
‘ “evidence of an ongoing mutual relationship and of activities in furtherance of
the relationship.” ’ [Citations.]
“Where an attorney unilaterally withdraws or abandons his client, ‘the
representation ends when the client actually has or reasonably should have no
expectation that the attorney will provide further legal services.’ . . . ” (Shaoxing
City Maolong Wuzhong Down Products, Ltd. v. Keehn & Associates, APC (2015)
238 Cal.App.4th 1031, 1038-1039, italics added.)
Framed another way: “ ‘After a client has no reasonable expectation that the
attorney will provide further legal services . . . the client is no longer hindered by a
potential disruption of the attorney-client relationship and no longer relies on the
attorney’s continuing representation, so the tolling should end.’ ” (Gotek, supra, 3
Cal.App.5th at p. 1247, italics added, quoting Gonzalez v. Kalu (2006) 140 Cal.App.4th
21, 30-31; see also Lockton v. O’Rourke (2010) 184 Cal.App.4th 1051, 1063.)
Contrary to Flake’s view, neither Truong v. Glasser (2009) 181 Cal.App.4th 102(Truong) nor Worthington v. Rusconi (1994) 29 Cal.App.4th 1488 indicate some split of
authority on the applicable test. The client’s reasonably objective belief controls in all
cases. Worthington reviewed various authorities and concluded that “[c]ontinuity of
representation ultimately depends, not on the client’s subjective beliefs, but rather on
evidence of an ongoing mutual relationship and of activities in furtherance of the
8
relationship.”6 (Worthington, at p. 1498; see Lockley v. Law Office of Cantrell, Green,
Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 887 [quoting this passage of
Worthingon].) Neither Worthington nor Lockley held the client’s subjective view
controls. (See Gonzalez v. Kalu, supra, 140 Cal.App.4th at p. 31 [discussing those cases
and holding the “continuous representation should be viewed objectively from the
client’s perspective”].) Although Truong stated: “For purposes of the statute of
limitations, the attorney’s representation is concluded as to the specific subject matter
when the parties agree, and does not depend on a formal termination like withdrawing as
counsel of record” it also held that an “objective standard” applied. (Truong, at p. 116,
italics added; see Nielsen v. Beck (2007) 157 Cal.App.4th 1041, 1049-1050 [noting
different factors may determine whether an ongoing relationship exists in given contexts,
but an objective standard always applies].)
Although Flake insists this is not a typical case of abandonment by counsel, we
fail to see how that advances his position. Neumiller’s motion would indicate to any
objectively reasonable client that Neumiller’s representation of Flake was over, as it had
been completely assumed by another. Whether that relationship-ending event is properly
characterized as a true “abandonment” by Neumiller or not, the motion definitively
informed Flake that Sinclair was already handling the pending postjudgment motions and
would handle the appeal. Although Sinclair later denied the truth of Neumiller’s
statements, and Flake may have (subjectively) thought otherwise, any objectively
6 In Hensley v. Caietti (1993) 13 Cal.App.4th 1165, analyzed in Worthington, we did say
that “the question of representation should be viewed from the perspective of the client”
(Id., p. 1172), but we did not hold that a client’s subjective belief controlled. There, the
client had had an “acrimonious departure” from the attorney’s office and stated that “in
her view the attorney-client relationship was over at that point,” when she “unmistakably
acted to end the attorney-client relationship.” (Id., pp. 1172-1173) This holding does not
support the view that a client’s subjective belief controls, but instead shows that there
was no factual dispute about the time of termination of the relationship in that case.
9
reasonable client would have understood on receipt of the motion to withdraw that
Neumiller had stopped working on the case. Therefore, Sinclair’s declaration did not
create a triable issue of material fact, because it does not inform as to Flake’s objectively
reasonable belief as of the time Flake was served with the motion to withdraw.
Nor did Flake’s declaration raise any triable issues, because he did not dispute that
he received the motion to withdraw and associated papers, which, as stated, clearly
signaled to an objectively reasonable reader that Neumiller was no longer providing legal
services for Flake.7
Accordingly, Flake cannot avail himself of the “continued representation” tolling
rule provided by section 340.6, subdivision (a)(2). Therefore, based on signal facts that
are not disputed, and disregarding immaterial disputes, this lawsuit was untimely and
summary judgment was properly granted based on the one-year statute of limitation.
7 Flake’s declaration suggests he had thought the case was over based on Truax’s
assurances that he could not be personally liable. This suggests he did not think there
was anything more for Neumiller to do, which arguably bolsters Neumiller’s claim that
Flake had no reasonable belief Neumiller was continuing to work for him. However, we
do not rest our decision on this part of Flake’s declaration, because, read liberally, it
could merely mean Flake subjectively believed Truax stood ready to fend off any
attempts to ascribe personal liability to Flake. (See Laclette v. Galindo (2010) 184
Cal.App.4th 919, 929 [“we cannot say as a matter of law that Laclette could not
reasonably expect Galindo to represent her in the event of issues arising concerning the
performance of the settlement”].)
10
DISPOSITION
The judgment is affirmed. Appellant shall pay respondent’s costs of this appeal.
(See Cal. Rules of Court, rule 8.278(a).)
/s/
Duarte, J.
We concur:
/s/
Mauro, Acting P. J.
/s/
Renner, J.
11
Filed 3/1/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(San Joaquin)
----
STANLEY FLAKE, Individually and as Trustee, etc., C079790
Plaintiff and Appellant, (Super. Ct. No. 39-2013-
00303351-CU-PN-STK)
v.
ORDER CERTIFYING
NEUMILLER & BEARDSLEE et al., OPINION FOR
PUBLICATION
Defendants and Respondents.
[NO CHANGE IN
JUDGMENT]
THE COURT:
The opinion in the above-entitled matter filed January 31, 2017, was not certified
for publication in the Official Reports. For good cause it appears now that the opinion
should be published in the Official Reports and it is so ordered.
1
BY THE COURT:
/s/
Mauro, Acting P. J.
/s/
Duarte, J.
/s/
Renner, J.
2
EDITORIAL LISTING
APPEAL from a judgment of the Superior Court of San Joaquin County, Roger
Ross, Judge. Affirmed.
Downey Brand LLP, Janlynn R. Fleener and Bret F. Meich for Plaintiff and
Appellant.
Murphy, Pearson, Bradley & Feeney, Jason E. Fellner and James A. Murphy for
Defendants and Respondents.
3