Flores v. Spitzer CA2/4 ( 2020 )

Filed 8/24/20 Flores v. Spitzer CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FOUR
JOSE FLORES, B294479
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC707076)
v.
DANIEL B. SPITZER,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court for Los Angeles
County, Daniel S. Murphy, Judge. Affirmed.
Law Offices of Mark R. McKinniss and Mark R. McKinniss for
Plaintiff and Appellant.
Lewis Brisbois Bisgaard & Smith, Kenneth C. Feldman and Barry
Zoller for Defendant and Respondent.
Plaintiff Jose Flores appeals from the dismissal of his complaint
against his former attorney, defendant Daniel B. Spitzer, following the
sustaining of Spitzer’s demurrer on the ground that all of the causes of
action are barred by Code of Civil Procedure1 section 340.6, the statute
of limitation applicable to claims against an attorney arising in the
performance of professional services. Flores contends the trial court
erred by sustaining the demurrer as to two of his claims—for fraud and
for breach of contract—and that the court abused its discretion by not
granting him leave to amend his complaint. We conclude that although
Flores labels his third cause of action as one for fraud, the allegations of
the complaint do not assert a claim of actual fraud but instead assert a
claim arising from Spitzer’s performance of legal services. Similarly,
Flores’s claim for breach of contract merely alleges that Spitzer
breached the contract by violating his professional obligations as an
attorney. Therefore, the trial court properly found that section 340.6
applies to, and bars, those claims. We also conclude that the trial court
did not abuse its discretion in sustaining the demurrer without leave to
amend because Flores has not demonstrated how he could amend his
complaint to allege viable claims. Accordingly, we affirm the judgment.
1 Further undesignated statutory references are to the Code of Civil
Procedure.
2
BACKGROUND
A. The Greenberg Lawsuit
This case has its genesis in a dispute between Flores, a contractor,
and his former clients, Larry and Cindy Greenberg, who purportedly
owed Flores money under their contract. Flores, who was in
disciplinary proceedings before the California Contractors State License
Board regarding revocation of his contractor’s license, consulted with
attorney Gerald N. Silver regarding his dispute with the Greenbergs
and getting his contractor’s license reinstated. Flores retained Silver
based upon Silver’s representations that he had a strong case against
the Greenbergs.
In December 2008, Silver filed a lawsuit against the Greenbergs
on behalf of Flores (the Greenberg lawsuit). The Greenbergs then filed
a cross-complaint against Flores seeking, among other relief,
disgorgement of all compensation they had paid him (more than
$60,000), on the ground that he was unlicensed. (See Bus. & Prof.
Code, § 7031, subd. (b) [“a person who utilizes the services of an
unlicensed contractor may bring an action in any court of competent
jurisdiction in this state to recover all compensation paid to the
unlicensed contractor for performance of any act or contract”].) A year
later, in February 2010, Flores entered into a stipulated judgment in
which he was required to pay $80,000 to the Greenbergs.
B. The Silver Lawsuit
In December 2014, Flores learned that his attorney in the
Greenberg lawsuit, Silver, was being investigated by the State Bar of
3
California; the investigation began after the Greenbergs obtained a
judgment against Silver for malicious prosecution of the Greenberg
lawsuit. In June 2015 (more than five years after the stipulated
judgment in the Greenberg lawsuit) Flores, appearing in propria
persona, filed a lawsuit against Silver alleging claims for legal
malpractice and related claims (the Silver lawsuit). After the trial court
in that case sustained Silver’s demurrer with leave to amend, Flores
met with attorney Spitzer, defendant in the present case. Spitzer
substituted into the case and filed a first amended complaint alleging
causes of action for breach of contract, legal malpractice, and fraud
against Silver.
On June 8, 2016, the trial court sustained Silver’s demurrer on
the ground that the applicable statutes of limitation—four years for
breach of contract (§ 337),2 one year for legal malpractice (§ 340.6), and
three years for fraud (§ 338)—barred all of Flores’s claims. The court
denied Flores leave to amend because the facts were clear, and it did
not appear that Flores could allege a viable claim. An order dismissing
the Silver lawsuit was filed that same day.
Flores, still represented by Spitzer, filed a notice of appeal from
the order dismissing the Silver lawsuit. On February 16, 2017, after
Spitzer filed the appellant’s opening brief, Flores filed a substitution of
attorney in the trial court, substituting himself, in propria persona, in
place of Spitzer. He filed a similar substitution of attorney in this court
2 On appeal, the parties agreed that section 340.6, rather than section
337, applied to the breach of contract claim.
4
two weeks later. On April 27, 2018, Division One of this Appellate
District issued its opinion in the Silver lawsuit, affirming the judgment.
C. The Present Lawsuit
On May 22, 2018, Flores, in propria persona, filed the instant
lawsuit against Spitzer, alleging claims for breach of written contract,
breach of fiduciary duty, legal malpractice, and fraud. The preliminary
allegations supporting all of Flores’s claims were as follows.
Flores met with Spitzer regarding the Silver lawsuit in February
2016. Spitzer told Flores that he specialized in legal malpractice law, so
Flores retained him to represent him. After Flores shared his file and
discussed the underlying documents, facts, and legal theories of the
case with Spitzer (particularly Silver’s statute of limitation defense),
Spitzer filed an amended complaint. Silver filed a demurrer to the
amended complaint, and Spitzer failed to identify facts in his opposition
to show that Flores’s claims were not time-barred; when Flores
demanded to know why the complaint was dismissed without leave to
amend, Spitzer lied to Flores that he had presented competent
arguments in opposition to the demurrer. Flores alleged that, in fact,
Spitzer was inept, had a poor understanding of the law, and had
provided substandard legal representation. It was not until after
Spitzer filed the appellant’s opening brief in Flores’s appeal from the
dismissal, however, that Flores decided that Spitzer was not qualified to
represent him; at that point Flores took over the appeal in propria
persona. On April 27, 2018, the court of appeal issued its decision
affirming the judgment.
5
All of these preliminary allegations were incorporated by
reference into each of the causes of action. The complaint also alleged
in the breach of contract cause of action that Spitzer agreed to provide
competent legal services in the Silver lawsuit, and breached that
agreement by failing to represent Flores competently, in that Spitzer
failed to make certain arguments in opposition to Silver’s demurrer. As
a result, Flores incurred attorney fees and costs in excess of $42,000
and lost his $1,500,000 claim against Silver. The complaint also alleged
the same conduct and damages in the breach of fiduciary duty and legal
malpractice causes of action. In the fraud cause of action, the complaint
alleged that Spitzer represented to Flores that he was well versed in the
law and specialized in legal malpractice law, that his intent in making
these representations was to induce Flores to pay him excessive legal
fees, that the representations were false in that Spitzer failed to make
certain arguments in opposition to the demurrer, and that Flores
suffered damages of $42,000 in attorney fees and costs, plus $1,500,000
from his lost claims against Silver.
Spitzer filed a demurrer to the complaint, arguing that the claims
were duplicative of each other and that all were barred by the one-year
statute of limitation set forth in section 340.6. The trial court agreed,
sustaining the demurrer to all four causes of action, but with leave to
amend.
Flores filed a first amended complaint—the complaint at issue in
this appeal—alleging claims for breach of written contract, breach of
fiduciary duty, fraud, and negligent misrepresentation. The amended
complaint includes the same preliminary allegations as the original
6
complaint and, like the original complaint, it incorporates those
allegations into each of the causes of action. The breach of contract and
breach of fiduciary duty causes of action are almost identical to their
counterparts in the original complaint, except that Flores deleted the
allegations specifying how Spitzer allegedly breached the contract or his
fiduciary duty. Instead Flores alleges that the breach of contract
occurred “[b]etween 2016 and mid-2017,” when Silver either failed to
perform all legal services agreed to, or agreed to represent Flores while
knowing there were no legal grounds for pursuing the Silver lawsuit; he
alleges that the breach of fiduciary duty occurred because Spitzer
represented to Flores that he could successfully maintain and prosecute
the Silver lawsuit despite the lapse of time. Although the breach of
fiduciary duty cause of action does not identify the damages Flores
allegedly suffered, the breach of contract cause of action alleges Flores
suffered damages in the amount of $1,542,000, i.e., the same total
amount as is alleged in the original complaint.
In the fraud cause of action, Flores alleges that (1) Spitzer
represented to Flores that he specialized in legal malpractice law, that
Flores had a strong and winning case, and that he could maintain and
successfully prosecute the Silver lawsuit; (2) these representations were
false in that Spitzer knew there were issues with the statutes of
limitation; (3) the representations were made to induce Flores to pay
him for his legal services; (4) Flores reasonably relied upon Spitzer’s
representations; and (5) Flores suffered damages in the amount of at
least $1,520,000. In the negligent misrepresentation cause of action,
Flores alleges that Spitzer owed Flores a duty to take reasonable
7
prudence to ensure that his actions and communications with Flores
were truthful and accurate, and that Spitzer breached this duty by
assuring Flores, without a reasonable basis in truth or fact, that he
understood the applicable law and could successfully maintain and
prosecute the Silver lawsuit, and that the statutes of limitation could be
surmounted in that case. He alleges the same damages as alleged in
the fraud cause of action.
Spitzer filed a demurrer to all causes of action. He contended that
the breach of contract, breach of fiduciary duty, and negligent
misrepresentation claims allege, in essence, claims for legal malpractice
and thus are barred by the one-year statute of limitation set forth in
section 340.6, and that each claim was duplicative of the other claims.
With regard to the fraud claim, Spitzer contended that the amended
complaint fails to state facts sufficient to constitute a cause of action for
fraud, and instead, the allegations are duplicative of the other causes of
action.
In his opposition to the demurrer, Flores did not address Spitzer’s
contention, i.e., that all of the causes of action are based upon
allegations of legal malpractice. Instead, he discussed the elements of
the causes of action, pointed to allegations in the amended complaint
that he asserted satisfied those elements, and stated that section 340.6
did not apply to those causes of action. He also asked that, if the court
were to sustain the demurrer, he be given leave to amend, but he did
not indicate what facts he could allege that would cure any defects.
The trial court sustained the demurrer without leave to amend. It
found that all causes of action are duplicative of each other, and all are
8
based upon Spitzer’s alleged negligent representation of Flores in the
Silver lawsuit. Therefore, it found that the one-year statute of
limitation set forth in section 340.6 applied. And, since Flores alleges
that the demurrer in the Silver lawsuit was sustained on June 8, 2016,
and Spitzer ended his representation of Flores on February 16, 2017,
Flores’s claims against Spitzer filed on May 22, 2018 were time-barred.3
The court entered a judgment of dismissal, from which Flores timely
filed a notice of appeal.
DISCUSSION
On appeal, Flores contends (1) the trial court erred by dismissing
his fraud claim, because section 340.6 excludes claims for actual fraud
from its application; (2) the court erred by sustaining Spitzer’s
demurrer to the breach of contract claim because none of the elements
of a breach of contract claim necessarily depends on proof that Spitzer
violated a professional obligation; and (3) the court abused its discretion
in denying leave to amend the complaint because the allegations of the
first amended complaint show a reasonable probability that a valid
fraud claim could be stated. None of these contentions prevail.
3 The court noted that the limitations period was not tolled pending the
outcome of the appeal; it was tolled only until Spitzer’s representation of
Flores ended. (Citing Laird v. Blacker (1992) 2 Cal.4th 606.)
9
A. Standard of Review
“In reviewing the sufficiency of a complaint against a general
demurrer, we are guided by long-settled rules. ‘We treat the demurrer
as admitting all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law. [Citation.] We also consider
matters which may be judicially noticed.’ [Citation.] Further, we give
the complaint a reasonable interpretation, reading it as a whole and its
parts in their context. [Citation.] When a demurrer is sustained, we
determine whether the complaint states facts sufficient to constitute a
cause of action. [Citation.] And when it is sustained without leave to
amend, we decide whether there is a reasonable possibility that the
defect can be cured by amendment: if it can be, the trial court has
abused its discretion and we reverse; if not, there has been no abuse of
discretion and we affirm. [Citations.] The burden of proving such
reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.)
B. Section 340.6
Section 340.6 provides, in relevant 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.” (§ 340.6, subd. (a).) The Supreme
Court has explained that this statute “applies to claims whose merits
10
necessarily depend on proof that an attorney violated a professional
obligation in the course of providing professional services. In this
context, a ‘professional obligation’ is an obligation that an attorney has
by virtue of being an attorney, such as fiduciary obligations, the
obligation to perform competently, the obligation to perform the services
contemplated in a legal services contract into which an attorney has
entered, and the obligations embodied in the State Bar Rules of
Professional Conduct.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1236-
1237.) The court concluded that the ultimate question is whether the
claim “necessarily depend[s] on proof that an attorney violated a
professional obligation in the course of providing professional services
unless the claim is for actual fraud.” (Id. at p. 1239.)
C. Fraud Claim
Flores contends the trial court erred in finding his fraud claim
barred by section 340.6 because he properly pleaded a claim for actual
fraud. However, Flores’s own explanation of the allegations he
contends satisfy the elements of actual fraud defeats his contention.
Flores begins his argument by setting forth the elements of fraud:
“(a) misrepresentation (false representation, concealment or
nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to
defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting
damage.” (Quoting Tenet Healthsystem Desert, Inc. v. Blue Cross of
California (2016) 245 Cal.App.4th 821, 837.) He then proceeds to
identify the allegations of the first amended complaint that purportedly
11
satisfy these elements. The problem for Flores arises with the
knowledge of falsity element of his claim.
The alleged misrepresentations identified by Flores are:
(1) Spitzer said he was well-versed and specialized in legal malpractice
law; (2) he said Flores had a strong and winning case; (3) he said he
could successfully represent Flores; and (4) he said he had successfully
handled many similar cases.4 To show knowledge of falsity, Flores
points to the allegation in the amended complaint that specifically
addresses this element: “Defendant Spitzer knew that there were
significant issues with the statute of limitations that might hamper the
[Silver lawsuit], but [Spitzer] said nothing about these, and instead
repeatedly reassured Flores that [Spitzer] had handled cases like the
[Silver lawsuit] many times before in a successful manner.” Flores also
cites to the preliminary allegations of the amended complaint to explain
further why Spitzer’s representations were false: “Flores alleged that
when he met with Spitzer at his law firm, Spitzer held himself out to be
a specialist in legal malpractice matters [citations], yet failed to
recognize the proper pleading requirements for the causes of action
advanced [citation], failed to understand the statute of limitations
[citation] and failed to understand the importance of apprising the court
4 Although Spitzer argues these are not actionable misrepresentations
because they are opinions regarding a future event (citing San Francisco
Design Center Associates v. Portman Companies (1995) 41 Cal.App.4th 29, 43-
44), we note that opinions may be actionable when the party asserting them
holds himself out to be specially qualified. (See 5 Witkin, Summary of Cal.
Law (11th ed. 2017) Torts, § 893, pp. 1222-1223, and cases cited therein.) We
need not decide this issue in light of our resolution of this case.
12
in the [Silver lawsuit] of certain facts which tolled the statute of
limitations.” Flores contends these allegations show that “Spitzer
intentionally misrepresented his expertise, knowledge of the laws,
outcome of the case and arguments he would present to the court.”
They do not.
Taking those allegations as true, as we must on review of a ruling
on a demurrer, those allegations do not show that Spitzer knowingly
made false representations. In light of the fact (of which we take
judicial notice) that Spitzer is certified by the State Bar of California as
a specialist in legal malpractice law, these allegations show only that
Spitzer failed to competently perform legal services, either by
misjudging the strength of Flores’s case or Silver’s defenses at the
outset, or by negligently prosecuting the case. In other words, that
Spitzer committed legal malpractice.
The only possibly cognizable fraud claim that might be
constructed from Flores’s allegations is that Spitzer knew that the
Silver lawsuit had no merit, but nevertheless told Flores that it had
some chance of success in order to induce Flores to retain him. But
such a claim is contrary to Flores’s consistent and repeated assertions
that the Silver lawsuit was meritorious. Moreover, that claim is
inconsistent with the damages he alleges were caused by Spitzer’s
alleged fraud. Such a claim would entitle Flores to recover, at most, the
attorney fees and costs he incurred as a result of the alleged fraud, yet
Flores alleges he was damaged in the amount of at least $1,520,000, i.e.,
the amount he alleges he lost due to the dismissal of the Silver lawsuit.
In any event, a representation that a lawsuit—even one in which a
13
demurrer to the original complaint has been sustained on statute of
limitation grounds—is winnable can be found to be false only if as a
matter of law there are no non-frivolous arguments that could be made
that valid claims exist that are not time-barred. Flores has not alleged
any facts, and does not argue on appeal, that such an allegation
truthfully could be made.5 Accordingly, the trial court properly found
that section 340.6 applied and barred the late-filed claim.
D. Contract Claim
In arguing the trial court erred by finding his breach of contract
claim was barred by section 340.6, Flores relies upon Lee v. Hanley,
supra, 61 Cal.4th 1225. In that case, the Supreme Court held that even
though the facts as alleged in a complaint might show that the lawyer-
defendant violated certain professional obligations, nonetheless, if the
allegations also could be construed to allege a claim (in that case, for
conversion) “whose ultimate proof at trial may not depend on the
assertion that [the lawyer-defendant] violated a professional
obligation,” it would be error for a court to sustain a demurrer to that
claim under section 340.6. (Id. at p. 1230.)
Flores contends that none of the elements of a cause of action for
breach of contract—(1) a contract, (2) the plaintiff’s performance or
excuse for nonperformance, (3) the defendant’s breach, and (4) damages
5 In fact, we note that Division One, in its opinion affirming the
dismissal of the Silver lawsuit, addressed the arguments Spitzer made on
behalf of Flores; it did not find those arguments to be frivolous. We take
judicial notice of that opinion.
14
to the plaintiff—necessarily require proof that Spitzer violated a
professional obligation. He argues that, because he “merely needs to
prove that the parties entered into a contract that was breached,” the
trial court erred in sustaining Spitzer’s demurrer to that claim. He is
mistaken.
What Flores overlooks is how he alleges Spitzer breached the
contract. The amended complaint alleges that Flores and Spitzer
entered into a contract in which Spitzer agreed, for a fee, “to perform
legal representation and to render legal services to [Flores].” It alleges
that Spitzer breached that contract by “either fail[ing] to perform all
legal services under [the contract] or agree[ing] to represent Flores
while knowing that there were no legal grounds to pursue the [Silver
lawsuit].” Under either scenario, in order to prove the breach, Flores
necessarily would have to show that Spitzer violated a professional
obligation in the course of providing legal services, i.e., that Spitzer
failed to perform all necessary legal services or that he failed to give
competent legal advice. Therefore, the trial court correctly found that
section 340.6 applied to, and barred, Flores’s breach of contract cause of
action.
E. Denial of Leave to Amend Complaint
Relying upon cases that hold it is abuse of discretion for a trial
court to deny leave to amend upon sustaining a demurrer when there is
a reasonable probability that the defect can be cured, Flores argues the
trial court in this case abused its discretion by denying him leave to
amend the complaint to assert viable fraud claim. In making this
15
argument, however, Flores fails to explain how he could amend the
fraud claim to avoid the operation of section 340.6. As the plaintiff
challenging the denial of leave to amend, it is his burden “to show what
facts he or she could plead to cure the existing defects in the complaint.
[Citation.] ‘To meet this burden, a plaintiff must submit a proposed
amended complaint or, on appeal, enumerate the facts and demonstrate
how those facts establish a cause of action.’” (Total Call International,
Inc. v. Peerless Ins. Co. (2010) 181 Cal.App.4th 161, 166.) “Where the
appellant offers no allegations to support the possibility of amendment
and no legal authority showing the viability of new causes of action,
there is no basis for finding the trial court abused its discretion when it
sustained the demurrer without leave to amend.” (Rakestraw v.
California Physicians’ Service (2000) 81 Cal.App.4th 39, 44.) Because
Flores failed to show how he could allege a viable fraud claim, we affirm
the court’s denial of leave to amend.
//
//
//
//
//
//
//
//
//
16
DISPOSITION
The judgment is affirmed. Spitzer shall recover his costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
WILLHITE, J.
We concur:
MANELLA, P. J.
CURREY, J.
17