Daily Blast - May 13, 2020 - Lewis Brisbois Bisgaard & Smith LLP

Today the Sixth Appellate District published its opinion in Huyen Nguyen v. Karen Ellen Ford, affirming the trial court’s order sustaining defendant attorney’s demurrer without leave to amend on statute of limitations grounds pursuant to Code of Civil Procedure section 340.6. Plaintiff asserted claims for legal malpractice and breach of fiduciary duty, alleging that but for defendant’s untimely filing of a brief in her district court case, summary judgment would not have been granted against her. Defendant entered into two separate retainer agreements with plaintiff; the first to represent plaintiff in the district court action, and the second, to represent plaintiff in the appeal of the summary judgment to the Ninth Circuit. While the appeal was pending, defendant obtained an order from the Ninth Circuit to withdraw as counsel, and another counsel took over the appeal. After withdrawing as counsel, defendant also filed a notice of withdrawal in the district court case as well as a notice of lien for fees, which were both served on plaintiff and referred to defendant as “former counsel.” Plaintiff filed this action less than six months after the Ninth Circuit affirmed the judgment. Since plaintiff was clearly on notice of the facts giving rise to her claim at the time of judgment over one year prior to filing the action, the question in the demurrer turned on whether the action was tolled for continuous representation.

Plaintiff argued that although defendant obtained an order withdrawing as counsel for the appeal, she failed to comply with the district court’s local rules in obtaining an order to withdraw from the district court action, and failed to advise plaintiff that she wished to terminate her legal services in the district court case. Plaintiff argued she therefore believed defendant was still representing her with respect to the district court action even after she withdrew as counsel in the Ninth Circuit appeal.

In affirming the trial court’s order sustaining defendant’s demurrer, the Court of Appeal found that the failure to obtain a formal order of withdrawal from the district court by itself did not toll the statute of limitations, stating that that neither the presence nor the absence of a formal withdrawal was dispositive of whether the statute was tolled for continued representation. (Opin. p. 10) The Court further noted that the question also did not turn on plaintiff’s subjective belief as to defendant’s continued representation, since an objective standard applies. (Opin. p. 11.) The Court found that under the circumstances, no objectively reasonable client would have concluded that defendant still represented her once she withdrew as counsel and filed notices in the district court action describing herself as former counsel and placing a lien on any judgment in plaintiff’s favor.

Lastly, the Court of Appeal also rejected plaintiff’s argument that her breach of fiduciary duty claim amounted to “actual fraud” outside the provisions of section 340.6. Plaintiff claimed that defendant breached her fiduciary duty by failing to advise plaintiff she was also withdrawing as counsel in the district court action. The appellate court concluded that section 340.6 applied to this claim as well, since it arose from the performance of professional services. (Opin. p. 15.)