In a legal malpractice action arising from a civil proceeding, the elements are
(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. If the allegedly negligent conduct does not cause damage, it generates no cause of action in tort.
Moua v. Pittullo, Howington, Barker, Abernathy, LLP, (2014) 228 Cal. App. 4th 107.
Element 1: lawyer’s Duties to Client
The plaintiff must show the existence of an agreement, either express or implied, giving rise to an attorney-client relationship and thus sufficient to create a duty of care owed by the attorney to the plaintiff. Budd v. Nixen, 6 Cal. 3d 195, 200.
The question of whether an attorney owes a legal duty of care to an alleged or putative client in a given factual situation presents a question of law that is determined by the court alone and not the jury. Nichols v. Keller, 15 Cal. App. 4th 1672, 1684.
An attorney’s duty, the breach of which amounts to negligence, is not limited to his failure to use the skill required of lawyers. Rather, it is a wider obligation to exercise due care to protect a client’s best interests in all ethical ways and in all circumstances. Day v. Rosenthal, 170 Cal. App. 3d 1125, 1147.
Attorneys who entered into a settlement relieving their clients of liability to contribute toward the settlement did not have a duty to make the record appear to exonerate their clients and were not liable for subsequent unfavorable publicity. Zalta v. Billips, 81 Cal. App. 3d 183, 190-91.
An attorney holding himself out as a specialist has a duty to exercise the skill, diligence and prudence exercised by other specialists of ordinary skill in the same area. Wright v. Williams, 47 Cal. App. 3d 802, 810.
Existence of Attorney-Client Relationship
The attorney-client relationship must be reasonably induced by the attorney’s representations or conduct. Fox v. Pollack, 181 Cal. App. 3d 954, 959.
An attorney-client relationship and its corresponding duties arise only from some form of contract, express or implied, formal or informal. Fox v. Pollack, 181 Cal. App. 3d 954, 959.
An attorney who discovered a conflict between representation of an existing client and a prospective client did not have a duty to advise the prospective client of the statute of limitations nor to advise him to seek other counsel upon severing the relationship with the prospective client. Flatt v. Superior Court, 9 Cal. 4th 275, 291.
An attorney who moved plaintiffs’ files into storage while their attorney was ill did not have a duty to plaintiffs to see that their summons was served. Daniels v. DeSimone, 13 Cal. App. 4th 600, 607-09.
Where the attorney-client relationship was terminated several months before the statute of limitations ran, the attorney did not have a duty to file an action on the former client’s behalf. Stuart v. Superior Court, 14 Cal. App. 4th 124, 127-28.
An attorney who withdrew as counsel after determining that the client’s malpractice claim was without merit did not breach a duty to the client. Kirsch v. Duryea, 21 Cal. 3d 303, 309-10.
Duty to Advise
“One of an attorney’s basic functions is to advise. Liability can exist because the attorney failed to provide advice. Not only should an attorney furnish advice when requested, but he or she should also volunteer opinions when necessary to further the client’s objectives. The attorney need not advise and caution of every possible alternative, but only of those that may result in adverse consequences if not considered. Even when a retention is expressly limited, the attorney may still have a duty to alert the client to legal problems which are reasonably apparent, even though they fall outside the scope of the retention. The attorney need not represent the client on such matters. Nevertheless, the attorney should inform the client of the limitations of the attorney’s representation and of the possible need for other counsel.” I, 15 Cal. App. 4th 1672
Duty to Do Reasonable Research
An attorney has a duty to undertake reasonable research to ascertain relevant legal principles, even if they are not commonly known, if they are readily discoverable by standard research. Stanley v. Richmond, 35 Cal. App. 4th 1070, 1093.
“Even in an unsettled area of the law, an attorney assumes an obligation to his client to undertake reasonable research in an effort to ascertain relevant legal principles and to make an informed decision as to a course of conduct based upon an intelligent assessment of the problem.” Smith v. Lewis, 13 Cal. 3d 349, 358-59.
Duties to Third Parties
Determining whether an attorney is liable to someone other than his client in a specific case is a matter of policy and involves the balancing of various factors, including the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, and the policy of preventing future harm. Biakanja v. Irving, 49 Cal. 2d 647, 650 (notary who drafted will should have known the beneficiary would suffer injury for his negligence in not having the will properly witnessed).
An attorney preparing a will has a duty to non-client beneficiaries of the will. Heyer v. Flaig, 70 Cal. 2d 223, 226-28.
An attorney representing a trustee assumes a duty to the beneficiaries of the trust. Morales v. Field, De Goff, Huppert & MacGowan, 99 Cal. App. 3d 307, 314-15.
Attorneys who prepared an opinion letter for clients to assist them in securing a loan from third parties had a duty to those third parties that they attempted or expected to influence. Roberts v. Ball, Hunt, Hart, Brown & Baerwitz, 57 Cal. App. 3d 104, 110-11.
Attorneys did not have a duty to third party stock purchasers for erroneous advice given to the shareholders of a closely held corporation regarding an exemption from the Securities Act for the corporation’s sale of stock, because the potential buyers were not “intended beneficiaries” of the client’s anticipated sales and it was not foreseeable that the plaintiffs would hear or rely upon the advice. Goodman v. Kennedy, 18 Cal. 3d 335, 342-44.
Plaintiff franchisees stated a valid malpractice action against attorneys who prepared a franchise prospectus that allegedly failed to disclose material information known to the attorneys but unknown to the franchisees. Courtney v. Waring, 191 Cal. App. 3d 1434, 1443-44.
A district attorney who obtained modification of a child support order did not owe a duty to the child’s mother. Jager v. County of Alameda, 8 Cal. App. 4th 294, 297.
Element 2: Lawyer’s Breach of duty
The plaintiff must allege an error or omission by the attorney constituting a breach of the duty owed to the plaintiff. Goldberg v. Frye, 217 Cal. App. 3d 1672, 1683.
An attorney’s violation of the rules of professional conduct conclusively established a breach of duty without the need for expert testimony. Day v. Rosenthal, 170 Cal. App. 3d 1125, 1147. “The standards governing an attorney’s ethical duties are conclusively established by the Rules of Professional Conduct. They cannot be changed by expert testimony. If an expert testifies contrary to the Rules of Professional Conduct, the standards established by the rules govern and the expert testimony is disregarded.” Id.; cf. Kirsch v. Duryea, 21 Cal. 3d 303, 311.
Failure to segregate a client’s funds constituted legal malpractice. T&R Foods, Inc. v. Rose, 47 Cal. App. 4th Supp.1, 7-8.
An attorney who withheld legal services and provided substandard service when his client refused to give him sexual favors breached his duty of care. McDaniel v. Gile, 230 Cal. App. 3d 363, 375.
An attorney retained by an insurer to represent an insured breached his duty to the client by entering into a settlement agreement stipulating to a judgment in excess of the client’s policy limits without obtaining the client’s consent. Ivy v. Pacific Auto. Ins. Co., 156 Cal. App. 2d 652, 659-60.
A presumption of undue influence applies to all transactions between an attorney and his client for the benefit of the attorney. Estate of Auen, 30 Cal. App. 4th 300, 309-10 (decedent left most of her substantial estate to her attorney).
Negligent Advice/Failure to Advise
A workers’ compensation attorney who did not advise his client of the possibility of a civil suit beyond the workers’ compensation benefits breached his duty to the client. Nichols v. Keller, 15 Cal. App. 4th 1672, 1683-84.
The test to determine whether an attorney is immune from liability for an honest error in judgment concerning a doubtful or debatable point of law consists of two prongs: (1) whether the state of the law was unsettled at the time the professional advice was rendered; and (2) whether the advice was based upon the exercise of an informed judgment. Davis v. Damrell, 119 Cal. App. 3d 883, 887.
A complaint by a decedent’s estate stated a valid malpractice action against an attorney who knew that the client was over 70 years of age and in poor health and who failed to move for a preferential trial date for nearly nine months. Granquist v. Sandberg, 219 Cal. App. 3d 181, 187-88.
Plaintiff could not state a cause of action for legal malpractice based on the attorney’s alleged failure to represent the client beyond the limited scope of the agreed representation. Banerian v. O’Malley, 42 Cal. App. 3d 604, 612.
Element 3: Causation
To satisfy this element, plaintiff must show both actual cause (“cause in fact”) and proximate cause between the attorney’s error or omission and plaintiff’s damages. Daniels v. DeSimone, 13 Cal. App. 4th 600.
For liability to lie, the attorney’s malpractice must be a proximate cause of the client’s actual injury. Tchorbadjian v. Western Home Ins. Co., 39 Cal. App. 4th 1211, 1223.
Proof of legal malpractice requires causation (i.e., a trial within a trial) to establish that but for the lawyer’s negligence, the client would have prevailed in the underlying litigation. United Community Church v. Garcin, 231 Cal. App. 3d 327, 334.
A plaintiff who establishes an attorney’s negligence must prove that careful handling of the case would have resulted in recovery of a favorable judgment and its collection. Campbell v. Magana, 184 Cal. App. 2d 751, 753-57.
An attorney who failed to include the county as a defendant did not cause plaintiff’s damages where the county would have been immune even if sued. Harris v. Smith, 157 Cal. App. 3d 100, 104.
Where an attorney filed a petition for a restraining order against the father of a child after being advised by the child that her father had abused her, the attorney’s action was not the proximate cause of the father’s damages from malicious prosecution absent the attorney’s knowledge that the facts in the petition were false. Tushinsky v. Arnold, 195 Cal. App. 3d 666, 673-74.
In a real estate exchange, where the plaintiff’s attorney relied on a title report and the representations of the other party’s agent to the effect that the property was free of encumbrances, when in fact it was subject to a $750,000 deed of trust, and advised plaintiff to proceed with the exchange without first obtaining a title insurance policy, the attorney’s actions were not the proximate cause of plaintiff’s damages. The title company’s omission of the encumbrance was an independent intervening cause. Commercial Standard Title Co. v. Superior Court, 92 Cal. App. 3d 934, 944.
Element 4: Plaintiff’s Damage
The plaintiff must have sustained actual damage, as opposed to nominal damage, speculative harm, or the threat of future harm. Jackson v. Johnson, 5 Cal. App. 4th 1350, 1355.
“If the allegedly negligent conduct does not cause damage, it generates no cause of action in tort. The mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm — not yet realized — does not suffice to create a cause of action for negligence. Hence, until the client suffers appreciable harm as a consequence of his attorney’s negligence, the client cannot establish a cause of action for malpractice.” Budd v. Nixen, 6 Cal. 3d 195, 200.
The plaintiff’s damage may not be based on speculation or surmise; the mere possibility or even probability that damage will result from an attorney’s negligence does not render it actionable. Ventura County Humane Society v. Holloway, 40 Cal. App. 3d 897, 907.
Where plaintiff claimed that her attorney’s delay in settling her case resulted in her physical regression, a decline in the value of her settlement due to changes in the financial market, and loss of evidence due to a confidentiality provision in another settlement, plaintiff’s damages were speculative and would not support her claims. Thompson v. Halvonik, 36 Cal. App. 4th 657, 661-62.
Where a jury found no actual damages from an attorney’s malpractice, an award of $20,000 in punitive damages was improper. Jackson v. Johnson, 5 Cal. App. 4th 1350, 1357-58
REMEDIES TO LEGAL MALPRACTICE
Compensatory Damages. An attorney’s liability in malpractice action, as in other negligence cases, is for all damages directly and proximately caused by his negligence. (Smith v. Lewis, 13 Cal. 3d 349, 362 Plaintiff may recover as compensatory damages the punitive damages she would have obtained in the underlying action but for defendants’ malpractice. Merenda v. Superior Court, 3 Cal. App. 4th 1, 11.
Measure of Damages. Where attorney negligently failed to press meritorious claim, measure of damages was value of claim lost. Arciniega v. Bank of San Bernardino, 52 Cal. App. 4th 213, 230.
Where attorney’s negligence did not result in total loss of client’s claim, measure of damages was the difference between what was recovered and what would have been recovered but for the attorney’s negligence). Sprigg v. Garcin, 105 Cal. App. 3d 869, 874
Emotional Distress. “California courts have barred emotional distress damages when attorney negligence directly caused loss of property alone. A breach of a duty to the plaintiff, other than a duty centering on the plaintiff’s emotional condition should threaten physical injury, not simply damage to property or financial interests. In cases of legal malpractice, the duty to avoid negligence in the practice of law is imposed to protect a client from the legal consequences of a miscarriage of justice. Whether recovery of damages for emotional distress attributable to legal malpractice should be allowed must be considered in light of the primary interest protected by the duty to avoid malpractice. Where the interest of the client is economic, serious emotional distress is not an inevitable consequence of the loss of money.” Camenisch v. Superior Court, 44 Cal. App. 4th 1689
Punitive Damages
Punitive damages were not available where malpractice complaint failed to allege any facts showing that attorney acted with oppression, fraud or malice. Smith v. Superior Court, 10 Cal. App. 4th 1033, 1042
Attorneys’ Fees
Attorneys’ fees incurred in underlying case are recoverable damages in legal malpractice action. Sindell v. Gibson, Dunn & Crutcher, 54 Cal. App. 4th 1457, 1470.
STATUTE OF LIMITATIONS TO LEGAL MALPRACTICE
The statute of limitations for legal malpractice other than actual fraud is one year from discovery of the facts constituting the wrongful act, not to exceed four years from the date of the wrongful act. Cal. Civ. Proc. Code §340.6(a). The limitations period is tolled during the time that any of the following exist:
(1) The plaintiff has not sustained actual injury;
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred;
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this provision tolls only the four-year period; or
(4) The plaintiff is under a legal or physical disability that restricts the plaintiff’s ability to commence legal action. Cal. Civ. Proc. Code §340.6(a).
In an action based upon an instrument in writing, the effective date of which depends upon some act or event of the future (such as a will), the limitations period starts to run when such act or event occurs. Cal. Civ. Proc. Code §340.6(b).
When “Actual Injury” Occurs
Actual injury, which is required for the limitations period to begin to run, occurs when the client suffers any loss or injury legally cognizable as damages in a legal malpractice action based on the asserted errors or omissions. Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal. 4th 739 [98 Cal. Daily Op. Serv. 5893, 98 Daily Journal DAR 8219, 1998 Cal. LEXIS 4687] (Code of Civil Procedure §340.6(a)(1) “will not toll the limitations period once the client can plead damages that could establish a cause of action for legal malpractice”).
“Actual injury” occurred upon entry of the underlying adverse judgment or order of dismissal, not when the plaintiff’s appeal from that judgment became final. Laird v. Blacker, 2 Cal. 4th 606, 612.
A criminal defendant client suffered “actual injury” when his prison sentence was executed, not when his new trial was granted on grounds of ineffective assistance of counsel. Fantazia v. County of Stanislaus, 41 Cal. App. 4th 1444, 1452.
