Monday, June 24, 2013
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Court of Appeal Rules:
No Duty to Tell Client About Malpractice Statute of Limitations
By KENNETH OFGANG, Staff Writer
An attorney has no fiduciary duty to tell a disaffected client how much time it has to sue the lawyer for malpractice, the First District Court of Appeal has ruled.
Div. Two Thursday affirmed an Alameda Superior Court judgment in favor of O’Keefe & O’Keefe, LLP, a law firm based in Albany. The firm represented OZ Optics, Ltd. and its chief executive officer in two lawsuits and sued for more than $150,000 in unpaid fees, to which the clients responded with a cross-complaint for malpractice.
OZ claimed the law firm overbilled, charged for unauthorized work, and performed work of poor quality. Among the allegations was that Garet O’Keefe left the courtroom during trial to use the restroom, leaving the clients unrepresented, and that he threw a pen at the CEO, Omur Sezerman, during the court proceedings.
More Than a Year
The law firm filed its complaint on Sept. 30, 2008, a little over a year after it had been substituted out of the two suits. OZ argued, in opposition to the law firm’s demurrer to the cross-complaint that it had notified the O’Keefe firm as early as March 2007 that it felt the firm had committed malpractice and threatened to sue it, but that O’Keefe continued to represent the company.
That continued representation, the company argued, created a conflict of interest.
OZ further claimed that it believed that the malpractice statute of limitations would be tolled while it continued to litigate the underlying cases, and that its attorneys knew that it was acting upon that assumption but never advised it otherwise.
The trial judge sustained the demurrer, ruling:
“An attorney does not have a fiduciary duty to a client to advise the client regarding how best to sue the attorney for malpractice once the representation ends, even if the client has expressed an inclination to do so. The scope of the representation by O’Keefe encompassed the claims in the underlying action. O’Keefe was not hired to provide legal advice about potential malpractice claims against itself. In addition, the fact that a client does not have specific information about legal theories and rules relating to a claim of malpractice is irrelevant to the running of the limitation period. Thus, failure to disclose this type of information cannot serve as a basis for tolling the limitation period.”
The claim for unpaid fees proceeded to a jury, which awarded the firm more than $190,000 with interest.
C.A. Ruling
Presiding Justice J. Anthony Kline, writing for the Court of Appeal, said in an unpublished opinion that the O’Keefe firm’s demurrer to the cross-complaint was correctly sustained.
“No case cited by defendants or found by us holds that an attorney has a fiduciary duty to advise a client regarding how best to sue the attorney for malpractice, or of the applicable statutes of limitation,” Kline wrote. “We conclude there is no such duty.”
The jurist further explained that because there was no such duty, “the failure of O&O to advise defendants of the one-year statute of limitations for malpractice or that it was not tolled by the appeal does not estop O&O from relying on the statute of limitations with respect to the cross-complaint. Nor did such allegations state a cause of action for breach of fiduciary duty or for actual fraud.”
Kline went on to reject OZ’s claim that the trial judge committed an abuse of discretion by allowing its counsel to withdraw two months before trial. OZ consented to the withdrawal, the presiding justice explained, and presented no evidence that the trial judge coerced it into doing so.
The case is O’Keefe & O’Keefe LLP, A131330.
Copyright 2013, Metropolitan News Company