Opinion
D056950 Super. Ct. No. 37-2008-00067025-CU-NP-CTL
11-30-2011
STEVE KASSAB, Plaintiff and Appellant, v. CRAIG J. LEFF et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
APPEAL from a judgment of the Superior Court of San Diego County, David B. Oberholtzer, Judge. Affirmed.
To maintain a legal malpractice action arising from the plaintiff''s convictions in an underlying criminal case, the plaintiff must plead and prove, in addition to the normal elements of the cause of action, actual innocence of the crimes and postconviction exoneration. (Wiley v. County of San Diego (1998) 19 Cal.4th 532, 545 (Wiley); Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199-1200 (Coscia).) In this action, Steve Kassab appeals a judgment of dismissal entered after the court sustained without leave to amend defendants' demurrers to his second amended complaint (SAC) on the ground it does not allege the Wiley and Coscia elements, and he made no showing he could amend the SAC to do so. Kassab contends the court erred because in addition to a malpractice count, the SAC contains breach of contract and other counts for which no showing of actual innocence is required. We find no error and affirm the judgment.
Kassab erroneously asserts he appeals two orders. His notice of appeal states he appeals the judgment of dismissal after an order sustaining a demurrer.
BACKGROUND
In April 2008 a jury found Kassab guilty of 23 misdemeanor counts of furnishing or possessing with the intent to furnish methamphetamine pipes, rock cocaine pipes, and other drug paraphernalia. (Health & Saf. Code, § 11364.7, subd. (a).) He was sentenced to a jail term and fined.
In September 2008 Kassab filed his original complaint for legal malpractice in this action. The complaint named as defendants Craig J. Leff, Marcella A. Chipman, Loyd L. Brown, Jr., Mark G. Spencer, Daniel C. Lough, Genaro Lara, Kerry L. Steigerwalt, David M. Boertje, and Roy C. Dickson, and alleged they represented Kassab at various times during the criminal proceedings and breached their duties to him.
In June 2009 Kassab filed the operative SAC. The SAC includes counts for professional negligence against Leff, Spencer, and Dickson; breach of fiduciary duty against Brown, Steigerwalt, Boertje, and Chipman; breach of contract against Steigerwalt, Lough, Boertje, Lara, and Dickson; breach of the implied covenant of good faith and fair dealing, unjust enrichment, violation of federal civil rights, and "unlawful policy, custom and habit" (capitalization omitted) against all defendants; and "conspiracy to engage in the unauthorized practice of law" (capitalization omitted) against Steigerwalt. Additionally, the SAC adds the San Diego County Bar Association (Bar Association) as a defendant on the theory it negligently hired, trained, retained, and supervised appointed defense counsel.
The SAC also named Starr Stinton as a defendant, but he is not involved in this appeal.
Defendants, other than Dickson, demurred to the SAC. The court granted a stay of discovery pending resolution of the demurrers. After hearings, the court sustained the demurrers without leave to amend on the ground the SAC did not allege Kassab's actual innocence of the criminal charges or his diligent pursuit of an appeal, and he made no showing he could further amend the complaint. Additionally, the court determined the SAC failed to plead facts showing a nexus between the alleged malpractice and resulting injury. The court noted Kassab had appealed the criminal conviction but had "defaulted twice on his appeal." On December 17, 2009, the court entered a judgment of dismissal as to all defendants, including Dickson.
The court's minute order states Kassab "allowed his appeal of those criminal convictions to go into default three times."
Kassab moved for reconsideration and for an order vacating the judgment of dismissal. On January 29, 2010, after a hearing, the court issued an order explaining it had erred by including Dickson in the judgment since he had not demurred to the SAC. Kassab had obtained a default against Dickson, but the court had granted his motion to set it aside. As to Dickson, the court treated Kassab's motion as one for a new trial, and granted him a new trial against Dickson. As to the other defendants, the court denied Kassab any relief. On February 24, 2010, Kassab filed his notice of appeal of the judgment of dismissal.
Dickson is not a party to the appeal since the court deleted him from the judgment of dismissal under review.
DISCUSSION
I
Standard of Review
" ' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed." [Citation.] Further, we give the complaint a reasonable interpretation.' " (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) The judgment of dismissal must be affirmed if any ground for demurrer is well taken, but it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. Further, it is an abuse of discretion to sustain a demurrer without leave to amend when the plaintiff shows there is a reasonable possibility an identified defect can be cured by amendment. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) "While the decision to sustain or overrule a demurrer is a legal ruling subject to de novo review on appeal, the granting of leave to amend involves an exercise of the trial court's discretion." (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.)
II
Legal Principles
Generally, the elements of a legal malpractice action are the duty to use the skill and diligence as members of the profession commonly possess, breach of the duty and a proximate causal connection between the breach and resulting damage. (Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1621.) Further, in Wiley, supra, 19 Cal.4th at page 545, the California Supreme Court held that proof of actual innocence is an additional element in a malpractice action against criminal defense counsel. The court explained: "[T]he public policy reasons articulated in favor of requiring proof of actual innocence are compelling. Our legal system is premised in part on the maxim, 'No one can take advantage of his own wrong.' [Citations.] Regardless of the attorney's negligence, a guilty defendant's conviction and sentence are the direct consequence of his own perfidy. The fact that nonnegligent counsel 'could have done better' may warrant postconviction relief, but it does not translate into civil damages, which are intended to make the plaintiff whole. [Citation.] While a conviction predicated on incompetence may be erroneous, it is not unjust." (Id. at pp. 538-539.)
In Coscia, supra, 25 Cal.4th 1194, our high court held that a malpractice plaintiff "must obtain postconviction relief in the form of a final disposition of the underlying criminal case—for example, by acquittal after retrial, reversal on appeal with directions to dismiss the charges, reversal followed by the People's refusal to continue the prosecution, or a grant of habeas corpus relief—as a prerequisite to proving actual innocence in a malpractice action against former criminal defense counsel." (Id. at p. 1205, fn. omitted.) The court explained that unlike civil litigants, criminal defendants are constitutionally and statutorily guaranteed "a full panoply of rights, powers, and privileges" that "not only protect [them] from abuses of the system but are designed to protect [them] from a deficient representation." (Id. at p. 1203.) Moreover, the requirement of postconviction relief protects against inconsistent verdicts and promotes judicial economy. (Id. at p. 1204.)
A malpractice action is subject to demurrer or summary judgment while the plaintiff's underlying conviction remains intact. (Coscia, supra, 25 Cal.4th at p. 1210.) For purposes of the statute of limitations (Code Civ. Proc., § 340.6, subd. (a)), however, the court "should stay the malpractice action during the period in which such a plaintiff timely and diligently pursues postconviction remedies." (Coscia, supra, at pp. 1210-1211.)
III
Analysis
A
We conclude the court properly sustained defendants' demurrers. The SAC does not allege Kassab's factual innocence, postconviction exoneration or the diligent pursuit of postconviction relief, and he does not assert he could amend the SAC to add such allegations. Contrary to Kassab's view, the allegations that "[e]ven with authorization by law [ostensibly to sell drug paraphernalia], [he] was still found guilty" and that he filed a notice of appeal of the criminal case is insufficient to meet his pleading burden. Further, Kassab's unsupported assertion in his reply brief that he could not diligently pursue an appeal because his appellate attorney failed to perform is not material to whether the court's ruling on the demurrer was proper. The allegation does not appear in the SAC or in judicially noticeable materials.
We deny Kassab's request for judicial notice dated November 16, 2010, as the attached documents are not relevant to the issue on appeal. Further, many of the documents are not the proper subject of judicial notice.
At oral argument, defense counsel advised us that Kassab's appeal of the underlying criminal conviction to the appellate department of the superior court remains pending, and defendant Leff sought a stay of this malpractice action pending resolution of the appeal. Kassab conceded he opposed a stay.
Kassab contends the SAC's counts for breach of contract raise a billing dispute not subject to Wiley and Coscia. He cites Bird, Marella, Boxer & Wolpert v. Superior Court (2003) 106 Cal.App.4th 419 (Bird),which held that in an action against former defense counsel for breach of contract and related torts arising from a fee dispute, the plaintiff client was not required to allege actual innocence. Bird states: "When the primary rights asserted in the complaint are the rights to be billed in accordance with specific contractual provisions and to be free from unethical or fraudulent billing practices on the part of defense counsel, . . . a criminal defendant client need not allege actual innocence in order to state a cause of action for breach of contract, breach of fiduciary duty, fraud and money had and received." (Id. at p. 421.) Bird explains the "nature of a cause of action does not depend on the label the plaintiff gives it or the relief the plaintiffs seeks but on the primary right involved." (Id. at p. 427.)
Here, in contrast to Bird, the primary right at issue is not a billing dispute but the right to competent criminal defense counsel. The complaint in Bird did not even include a cause of action for legal malpractice. (Bird, supra, 106 Cal.App.4th at p. 421.) In addition to the SAC's counts for legal malpractice, its counts for breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, federal civil rights violations, and "unlawful policy, custom and habit" (capitalization omitted) are all based on professional negligence.
Kassab's citation to McKnight v. Office of Public Defender (N.J. Super. 2007) 397 N.J. Super. 265 , for the notion actual innocence is not an element of a malpractice action against criminal defense attorney is improper because the Supreme Court of New Jersey reversed the opinion. (McKnight v. Office of Public Defender (N.J. 2008) 197 N.J. 180, 182 [962 A.2d 482,483].)
The SAC's breach of contract counts name only four defendants involved in this appeal. The counts allege Steigerwalt, Lough, and Boertje entered into written agreements with Kassab to represent him in the criminal case for $2,500, $1,500, and $2,500 respectively, and Lara entered into a written agreement to represent Kassab in the criminal case on a contingency fee basis. The counts allege Kassab paid those defendants, but they "failed to fulfill any conditions required of him," and as a result he had "been damaged in an amount as yet undetermined." Kassab's statement of damages does not reflect a dispute over the relatively minor amount of fees he paid. It claims general damages of $250,000; special damages of $1 million; and an entitlement to punitive and exemplary damages of $120 million.
A criminal defense attorney would not ordinarily represent a defendant on a contingency fee basis. The SAC also alleges Lara agreed to represent Kassab as a plaintiff "in a Federal District Court Civil Rights action."
In Lynch v. Warwick (2002) 95 Cal.App.4th 267, 274, this court observed that "[s]eeking attorney fees incurred in a legal malpractice action due to the prior attorney's negligence is a typical item of damages." We held in Lynch that the "the actual innocence requirement for a criminal legal malpractice case applies regardless of whether the former criminal defendant is seeking damages for a wrongful conviction, a longer sentence, or for attorney fees." (Id. at p. 275.)
The same analysis applies here. The trial court properly determined the counts in the SAC, including the breach of contract count, "sue the demurring defendants with respect to the quality of the legal services that [they] allegedly provided to plaintiff in the underlying criminal case, i.e., the right to competent counsel." Thus, actual innocence and postconviction exoneration elements apply to the SAC.
The other claims Kassab raises are likewise without merit. He argues the court "made partisan findings of fact which resulted in a miscarriage of justice." The court's ruling, however, is based on the allegations of the SAC and judicially noticeable materials. No miscarriage of justice appears. His assertion with respect to a supposed " 'sham pleading' exception" is unclear, and thus we cannot respond to it. Additionally, Kassab was not prejudiced by the court's stay of discovery pending the demurrer hearings or its consideration of some "parties' tardy papers."
B
In his reply brief, Kassab contends he could amend the complaint to state a cause of action. He asserts he "may seek a reversal of the ruling sustaining the demurrer on abuse of discretion grounds alone, without resort to proving now, on appeal, that the complaint could have been amended." He cites Lynch v. Warwick (2002) 95 Cal.App.4th 267, which pertains to summary judgment rather than a demurrer. He also cites this language from Lyons v. Wickhorst (1986) 42 Cal.3d 911, 916: "In sum, although the discretionary power to dismiss with prejudice has been upheld in this state, its use has been tightly circumscribed." The language does not concern leave to amend a complaint.
It is Kassab's burden, on appeal, to show a reasonable possibility he could cure the defects in the SAC by amendment. (Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at pp. 970-971.) "A plaintiff has the burden to show in what manner the pleadings may be amended and how the amendments will change their legal effect." (Haro v. City of Solana Beach (2011) 195 Cal.App.4th 542, 554.) Kassab does not suggest how he could amend the SAC to allege his actual innocence, postconviction relief, or the diligent pursuit of such relief. Thus, the court did not abuse its discretion by sustaining the demurrer without leave to amend.
Given our holding, we are not required to address defendants' other bases for demurrer, or Kassab's assertion the court abused its discretion by staying discovery pending resolution of the demurrers.
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DISPOSITION
The judgment is affirmed. Defendants are entitled to costs on appeal.
MCCONNELL, P. J. WE CONCUR:
NARES, J.
MCINTYRE, J.