Daily Blast October 13, 2016

Yesterday, the Court of Appeal, Second Appellate District, Division Six (Ventura County), issued an opinion in Gotek Energy, Inc. v. SoCal IP Law Group, LLP (Oct. 12, 2016, B266681) __ Cal.App.5th __, analyzing tolling of the statute of limitations in a legal malpractice action based on continuous representation. The Court of Appeal concluded the action was barred because the tolling of the statute of limitations ended more than one year before the filing of the malpractice action. (Slip opn., p. 5.) According to the court, an attorney’s representation of a client ends when the client consents to a withdrawal or when the client reasonably should have no expectation that the attorney will provide further legal services, based on an objective standard. (Id. at pp. 5, 7.)

The case arose when SoCal IP Law Group, LLP (“firm one”), who was Gotek Energy, Inc.’s (“client”) patent counsel, failed to timely file patent applications. (Slip opn., p. 1.) Client retained Parker Mills (“firm two”) to bring a malpractice action against firm one. (Ibid.) The trial court granted firm one’s summary judgment motion finding firm two filed the action after the one-year statute of limitations had expired. Client appealed contending the statute of limitations was tolled under the continuous relationship exception of Code of Civil Procedure section 340.6, subdivision (a)(2). (Ibid.)

The Court of Appeal affirmed. (Slip opn., p. 1.) According to Code of Civil Procedure section 340.6, subdivision (a)(2), the statute of limitations for a malpractice claim is tolled during the time the attorney continues to represent the client in the matter in which the alleged wrongful act occurred. (Id. at p. 4.) “‘An attorney’s representation of a client ordinarily ends when the client discharges the attorney or consents to a withdrawal.’” (Id. at p. 5, quoting Gonzalez v. Kalu (2006) 140 Cal.App.4th 21, 28.) At the latest, firm one’s representation of client ended when client wrote a letter to firm one requesting that firm one send client’s files to a third law firm. (Slip opn., p. 5.) By doing so, client consented to firm one’s express withdrawal the previous day when firm one sent an email to client upon receiving notice that client intended to make a malpractice claim, stating it “must withdraw.” (Id. at pp. 2, 5.) Even if client had not consented, the withdrawal would have been effective because after receiving that email, client could not have reasonably expected that firm one would provide further legal services. (Id. at pp. 5-6.)  In the event of an attorney’s unilateral withdrawal, representation ends when the client reasonably should have no expectation the attorney will provide further legal services, based on an objective standard. (Id. at pp. 5, 7.) The court rejected client’s argument that firm one’s representation continued until it transferred client’s files to the third firm. (Id. at pp. 6-7.)  “‘Continuity of representation ultimately depends . . . on evidence of an ongoing mutual relationship and of activities in furtherance of the relationship.’” (Id. at p. 7, quoting Worthington v. Rusconi (1994) 29 Cal.App.4th 1488, 1498, italics omitted.) Firm one’s transfer of client’s files did not satisfy that standard as it was merely a clerical activity. (Slip opn., p. 7.)

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