Tuesday, May 18, 2010
C.A. Rules on Tolling Malpractice Limitations Period
By STEVEN M. ELLIS, Staff Writer
Attorneys who had no contact with a client for two years after she agreed to settle a case by making structured payments might still have been her counsel, this district’s Court of Appeal ruled yesterday, reviving a malpractice action against a Long Beach firm.
Div. Three held that tolling of the statute of limitations was not precluded where the woman was making settlement payments, the trial court retained jurisdiction, the firm never withdrew and there was no clear agreement on when the representation was to end.
Given the circumstances, Presiding Justice Joan D. Klein wrote, the panel could not say as a matter of law that Los Angeles realtor Amarillys Laclette had no reasonable expectation that Alexis Galindo and her firm Curd Galindo & Smith would represent Laclette if issues arose concerning settlement performance.
Klein rejected the firm’s argument that the two-year hiatus, during which no legal services were required as to the settlement agreement, implicitly terminated the firms’ representation.
Galindo represented Laclette and her employer, Elite Properties, in a breach of contract and fraud action by a former client of Laclette, Natalie Ramirez, who accused the realtor of falsely assuring that a home had no significant problems and did not need an inspection.
The parties initially settled under a deal in which Laclette agreed to pay Ramirez $25,000, but the agreement was set aside by the trial court. A jury later awarded Ramirez $275,000 in compensatory damages.
The parties reached a second settlement in January 2005 before trial began as to punitive damages under which Laclette and Elite each agreed to pay Ramirez $175,000. As part, Laclette agreed to pay Ramirez $3,750 per month until Laclette’s half was paid.
Laclette made payments as agreed over the following years, but in February 2007—apparently after Elite defaulted on its settlement payments—sued Galindo and her firm, alleging counsel had a conflict of interest in representing both Laclette and Elite in the underlying matter.
Laclette sought $150,000 from the firm, the difference between the first and second settlement deals.
Galindo sought summary judgment, arguing that the representation ended in January 2005 and that Laclette knew of the alleged wrong at that time. Galindo also pointed out that her firm had no contact with Laclette after that date and argued that the one-year statute of limitations ran in January 2006 pursuant to Code of Civil Procedure Sec. 340.6(a).
Laclette acknowledged the lack of contact until 2007, but argued that potential issues remained during that time such as whether all payments had been made, amounts and dates of payments, and whether Ramirez was entitled to entry of a judgment or Laclette was entitled to a dismissal with prejudice. Laclette contended that the statute was tolled under Sec. 340.6(a)(2) by virtue of Galindo’s continuing representation.
Los Angeles Superior Court Judge Alan S. Rosenfield granted the firm’s request, but Klein—pointing to the Second District’s opinion in Gonzalez v. Kalu (2006) 140 Cal.App.4th 21—said on appeal that a triable issue of fact existed as to whether Laclette’s expectation was reasonable.
In Gonzalez, Justice H. Walter Croskey wrote for Div. Three that when an attorney unilaterally withdraws or abandons a client, the representation ends when the client actually has or reasonably should have no expectation that the attorney will provide further legal services.
Klein, noting that Laclette’s case did not involve a client consent to termination or an order granting an application by counsel for withdrawal, said that Galindo needed to show that the representation had been fulfilled or completed from Laclette’s perspective in order to obtain summary judgment.
Justices H. Walter Croskey and Patti S. Kitching joined Klein in her opinion.
The case is Laclette v. Galindo, 10 S.O.S. 2591.
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