Opinion
B301785
04-08-2022
Shahrokh MIRESKANDARI, Plaintiff and Appellant, v. EDWARDS WILDMAN PALMER LLP et al., Defendants and Respondents.
Dykema Gossett, Becky S. James and Lisa M. Burnett, Los Angeles, for Plaintiff and Appellant. Valle Makoff, John M. Moscarino and Katherine Balatbat, Los Angeles, for Defendants and Respondents.
Certified for Partial Publication.
Under California Rules of Court, rules 8.1100 and 8.1110, this opinion is certified for publication with the exception of parts 2 through 7 of the Discussion section.
Dykema Gossett, Becky S. James and Lisa M. Burnett, Los Angeles, for Plaintiff and Appellant.
Valle Makoff, John M. Moscarino and Katherine Balatbat, Los Angeles, for Defendants and Respondents.
EGERTON, J. Plaintiff Shahrokh Mireskandari sued his former attorneys, defendants Edwards Wildman Palmer LLP (EWP) and Dominique Shelton, for professional negligence, breach of fiduciary duty, and breach of contract, alleging, among other things, defendants failed to advise him of our state's anti-SLAPP statute before filing a complaint on his behalf against a newspaper publisher in California federal court. He alleged the lawsuit predictably drew a successful special motion to strike, which caused him to incur substantial attorney fees litigating and losing the motion and deprived him of discovery he intended to use in a disciplinary proceeding pending against him in the United Kingdom, ultimately resulting in the loss of his law license, substantial fines and fees, and bankruptcy.
The trial court granted defendants’ motion for summary adjudication of the professional negligence claim, concluding Mireskandari could not establish causation under the case-within-a-case method because he could not prove he would have prevailed in his lawsuit against the publisher but for defendants’ negligence. We conclude the trial court erred. As we will explain, while we agree with the court's subsequent ruling that Mireskandari's damages claim based on the adverse outcome of the U.K. disciplinary proceeding was too speculative to create a question of fact for a jury, those damages were only part of his cause of action for professional negligence. Because an attorney owes a duty of care to advise a client of foreseeable risks of litigation before filing a lawsuit on the client's behalf, we conclude Mireskandari asserted a viable claim that, but for defendants’ negligent failure to advise him of the risks associated with a potential anti-SLAPP motion, he would not have filed his lawsuit in California and would not have incurred damages from litigating and losing an anti-SLAPP motion.
Mireskandari asserts several other claims of error regarding the court's pre-trial, trial, and post-trial rulings. We reject each of these challenges for the principal reason, among others, that Mireskandari has categorically failed to meet his burden to present an adequate record and argument affirmatively demonstrating prejudicial error.
Defendants moved for the assessment of sanctions against Mireskandari and his appellate counsel based on several material violations of the California Rules of Court governing the opening brief and appellant's appendix in civil appeals. We gave Mireskandari and his counsel written notice that we were considering imposing sanctions for some of those violations. (Rule 8.276(c).) In response, Mireskandari's counsel acknowledged the rule violations, but explained they were unintended and resulted largely from an unanticipated combination of receiving a disordered record from trial counsel and strained office resources due to the COVID-19 pandemic. While we remain troubled by the scope of these admitted infractions, we conclude counsel's contrition and the unprecedented hardship her office and staff faced due to the pandemic make sanctions inappropriate in this case.
Rule references are to the California Rules of Court.
Mireskandari's lead appellate counsel, Becky S. James, filed the opening brief and appellant's appendix while at her former firm, James & Associates. In mid-2021, James merged her former firm with Dykema Gosset, and Mireskandari retained Dykema Gosset to represent him in this appeal and to file the appellant's reply brief on his behalf. In his reply brief, Mireskandari opposed the motion for sanctions without authorization. (Rule 8.276(d) ["An opposition [to a motion for sanctions] may not be filed unless the court sends [written] notice" that it is considering imposing sanctions.].) He asserted the motion was "meritless," arguing (among other things) his 9,700-page appellant's appendix necessarily complied with the California Rules of Court because, if it had not, this court's "clerk would have had a duty to reject it." (See rule 8.18 ["Except as these rules provide otherwise, the reviewing court clerk must not file any record or other document that does not conform to these rules."].) The argument naturally ignored that, notwithstanding the reviewing court clerk's role under rule 8.18, sanctions are authorized for unreasonable rule violations when those violations appear in a duly filed document. (See rule 8.276, subd. (a)(4).) Ultimately, when this court notified Mireskandari we were considering imposing sanctions and authorized him to file an opposition, his appellate counsel acknowledged the rule violations in his appendix and opening brief.
We reverse the order summarily adjudicating the professional negligence claim and affirm the judgment in all other respects. The motion for sanctions is denied. FACTS AND PROCEDURAL HISTORY
This case and the underlying litigation that spawned it have a lengthy history. Our summary here will be brief, and we will discuss certain proceedings in more detail when we address Mireskandari's related claims of error.
1. The Daily Mail Articles and the U.K. Disciplinary Proceeding Against Mireskandari
Mireskandari was educated in the United States and later moved to London, England. He was admitted to the English bar as a solicitor in 2000 and became a partner in the law firm of Dean & Dean in 2005.
Beginning in September 2008, the Daily Mail, a London tabloid, published a series of unflattering articles about Mireskandari. Among other things, the articles said Mireskandari had been convicted of fraud in California in connection with a telemarketing scam; he claimed to have a bachelor's degree from the University of Pennsylvania, of which the university had no record; he failed to pass his classes at a "minor local" law school in the United States; he obtained his law degree from the American University of Hawaii, which subsequently was shut down by the courts; and he overcharged clients for legal work.
In December 2008, the Solicitors Regulation Authority (SRA), the regulatory body for solicitors in England and Wales, took over Dean & Dean and brought a disciplinary action against Mireskandari in the Solicitor's Disciplinary Tribunal (SDT). The SRA alleged Mireskandari had misrepresented his education, training, and background to gain bar admission. It also alleged that, after obtaining his license, Mireskandari misused client funds; lied about doctoring evidence; and invited serious adverse findings for his litigation misconduct.
2. Mireskandari Retains Defendants to Sue the Daily Mail in the United States
Peter Herbert was the chair of the U.K.’s Society of Black Lawyers ("SBL") and a lawyer who represented Mireskandari and directed his media strategy. The SBL had an ongoing campaign alleging the SRA disproportionately targeted minority solicitors because of their race.
In December 2011, Herbert travelled to the United States, where he met Brett Bocchieri, a Los Angeles attorney who Mireskandari testified was the "quarterback" of his U.S. legal team. Bocchieri proposed a plan for Mireskandari to file lawsuits against the SRA and the Daily Mail in California. Herbert searched for an American attorney with "privacy/media law" experience to represent Mireskandari. He was eventually referred to Shelton, who at the time was a partner in EWP's Los Angeles office.
On March 6, 2012, Herbert and Mireskandari's future wife, Saeedeh Mirshahi, met with Shelton to discuss a potential privacy claim. The essence of the claim was that a Los Angeles-based Daily Mail reporter, David Gardner, misrepresented he had Mireskandari's consent to search a National Student Clearinghouse (NSC) website to access Mireskandari's confidential education records. On April 4, 2012, EWP filed Mireskandari's invasion of privacy case in the United States District Court for the Central District of California, alleging Gardner had hacked into Mireskandari's confidential educational records on the NSC website.
3. The First Amended Complaint; the Daily Mail's Special Motion to Strike; and the SDT's Decision Striking Mireskandari from the Roll of Solicitors
On April 16, 2012, the NSC informed Mireskandari it did not have his law school records. Because this disclosure confirmed there had not been an "unlawful hacking," Shelton advised Mireskandari that he would need either to dismiss the case or to file an amended complaint. She also advised Mireskandari that continuing the litigation would pit his privacy rights against the Daily Mail's First Amendment rights and would likely draw a motion to strike under California's anti-SLAPP statute. Mireskandari instructed Shelton to file the amended complaint.
On May 23, 2012, defendants filed Mireskandari's first amended complaint, alleging, among other things, the Daily Mail published false and misleading articles about him.
In June 2012, Associated Newspapers Limited, the Daily Mail's publisher, filed a special motion to strike all Mireskandari's state law claims under the anti-SLAPP statute.
The same month, the SDT issued its decision in Mireskandari's disciplinary proceeding. Among other things, the tribunal found Mireskandari misrepresented his post-graduate education; he had been convicted of telemarketing fraud in California; and his conduct "had caused financial damage to former clients." The SDT concluded Mireskandari's conduct "had shown a complete and blatant disregard for his professional obligations" and, if Mireskandari were allowed to continue to practice law, he would pose "a very significant risk to the public." Finding "no means by which he could rehabilitate himself," the tribunal ordered Mireskandari struck from the Roll of Solicitors.
4. The Attorney-Client Relationship Deteriorates and Mireskandari Retains Successor Counsel
Following a discussion about his case and EWP's bills, Mireskandari sent Shelton an email entitled "Notice," accusing her of acting "in complete breach of the terms of the retainer between me and your firm." He said he was "deeply troubled" by a "swinging pendulum of advice" and demanded written communications "to avoid any misunderstandings." Shelton consulted with EWP's general counsel, Jeffrey Swope, about Mireskandari's complaints and the client relationship. Notwithstanding the billing dispute, EWP added personnel to Mireskandari's litigation team to oppose the anti-SLAPP motion.
In July 2012, Mireskandari retained Bonnie Eskenazi and her firm Greenberg Glusker to work on the Daily Mail case. The firm later substituted into the case to replace EWP. In October 2012, Eskenazi sent Mireskandari an email identifying "a damages/causation problem and a res judicata/collateral estoppel problem" due to the SDT judgment. In January 2013, Eskenazi sent Mireskandari a 43-page memorandum discussing the preclusive effect of the SDT judgment and emphasizing the need to formulate "a viable exit strategy."
In April 2013, Bocchieri replaced Greenberg Glusker as Mireskandari's counsel in the Daily Mail case. The attorney-client relationship soured over Mireskandari disregarding Bocchieri's advice, and Mireskandari substituted another attorney into the case.
In October 2013, the federal district court granted the publisher's special motion to strike several of Mireskandari's claims, with leave to amend.
In November 2013, Mireskandari filed a second amended complaint. The Daily Mail's publisher filed a second anti-SLAPP motion. After lodging a third amended complaint, Mireskandari dismissed his federal action.
In March 2014, Mireskandari filed a new action against the Daily Mail's publisher in California state court. The publisher filed another anti-SLAPP motion. The trial court granted the motion in part but denied it with respect to the false light claim. This court reversed the order in part and directed the trial court to grant the anti-SLAPP motion in its entirety, concluding the SDT judgment barred Mireskandari's false light claim under the substantial truth doctrine.
Defendants’ request for judicial notice of records from Mireskandari's earlier appeal (Case No. B262942) and writ petition (Case No. B264169) is granted. We also take judicial notice of the federal district court's order denying Mireskandari's application for discovery in Case No. CV 12-10310.
5. Mireskandari Sues Defendants for Legal Malpractice; Pretrial Rulings Limit Mireskandari's Damages Claims
In August 2013, Mireskandari filed this lawsuit against defendants. His operative second amended complaint asserted causes of action for professional negligence, breach of fiduciary duty, and breach of contract. It alleged defendants negligently failed to advise Mireskandari of California's anti-SLAPP statute; breached their fiduciary duties by, among other things, misrepresenting Shelton's qualifications, generating unreasonable fees, and failing to advise Mireskandari about California's anti-SLAPP statute; and breached provisions of the parties’ engagement agreement pertaining to the retainer payment, monthly invoices, and fee disputes.
Defendants moved for summary adjudication of the professional negligence claim, arguing Mireskandari could not establish causation under the case-within-a-case method because he did not predicate his claim on the outcome of the Daily Mail case and he admitted a more favorable outcome in the SDT disciplinary proceeding was speculative. The trial court granted the motion.
Citing discovery responses in which Mireskandari claimed over $220 million in damages associated with the judgment against him in the SDT proceeding, defendants advised the trial court of their intention to move for an order precluding Mireskandari from introducing evidence or making any argument for recovery of those damages. The parties stipulated to briefing and a hearing under Evidence Code section 402 to adjudicate this "important threshold issue." After a nine-day evidentiary hearing, the court entered an order precluding Mireskandari from presenting the damages theory to the jury, concluding the evidence was too speculative to prove the causation or damages elements of the claim.
Defendants filed a motion in limine arguing Mireskandari could not claim the attorney fees incurred in the Daily Mail case as damages because he did not assert he could have achieved a more favorable result in that action. The trial court denied the motion in part, concluding the case-within-a-case method did not preclude Mireskandari from seeking recovery of those attorney fees on his breach of fiduciary duty claim. However, the court found it was not "reasonably foreseeable" that Mireskandari's successor counsel would file a second amended complaint, then dismiss the federal action in favor of a state court action. Thus, the court ruled Mireskandari could introduce evidence of only those attorney fees incurred through the date of the district court's anti-SLAPP ruling in the Daily Mail case.
6. The Jury Finds Shelton Did Not Breach Her Fiduciary Duty and Mireskandari Could Have Avoided Damages Attributable to EWP's Breach
In May 2019, Mireskandari's claims for breach of fiduciary duty and breach of contract proceeded to a jury trial. He presented five theories of liability for breach of fiduciary duty, asserting defendants "knowingly acted" against his interests in connection with: (1) descriptions of Shelton's qualifications; (2) advice about the anti-SLAPP statute; (3) failing to disclose malpractice; (4) abandonment; and (5) assembling a team of lawyers to act against him. The jury found Shelton was not liable on any theory. With respect to EWP, the jury found the firm was not liable for breach of the parties’ engagement agreement, but EWP had breached its fiduciary duty by assembling a team of lawyers to act against Mireskandari. However, the jury awarded Mireskandari no damages, finding he could have "reasonably avoided harm" with respect to all the attorney fees he claimed as damages.
Mireskandari moved for a new trial and for judgment notwithstanding the verdict. The trial court denied the motions. This appeal followed.
DISCUSSION
1. Defendants Failed to Satisfy Their Initial Burden for Summary Adjudication of the Professional Negligence Claim
The rules governing summary adjudication are well established. "A defendant making [a] motion for summary adjudication has the initial burden of showing that the [challenged] cause of action lacks merit because one or more elements of the cause of action cannot be established or there is a complete defense to that cause of action." ( Intrieri v. Superior Court (2004) 117 Cal.App.4th 72, 81–82, 12 Cal.Rptr.3d 97 ; Code Civ. Proc., § 437c, subd. (f)(1).) "If the defendant fails to make this initial showing, it is unnecessary to examine the plaintiff's opposing evidence and the motion must be denied." ( Intrieri, at p. 82, 12 Cal.Rptr.3d 97 ; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849, 107 Cal.Rptr.2d 841, 24 P.3d 493 ; Code Civ. Proc., § 437c, subd. (p)(2).) The court is authorized to grant summary adjudication only if the motion "completely disposes of a cause of action." ( Code Civ. Proc., § 437c, subd. (f)(1).)
In reviewing an order granting summary adjudication, "we apply the same standard of review applicable on appeal from a grant of summary judgment. [Citation.] Accordingly, ‘ "... we take the facts from the record that was before the trial court when it ruled on that motion. [Citation.] ‘ "We review the trial court's decision de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained." ’ [Citation.] We liberally construe the evidence in support of the party opposing summary [adjudication] and resolve doubts concerning the evidence in favor of that party." ’ " ( Schofield v. Superior Court (2010) 190 Cal.App.4th 154, 156–157, 118 Cal.Rptr.3d 160, quoting Wilson v. 21st Century Ins. Co . (2007) 42 Cal.4th 713, 716–717, 68 Cal.Rptr.3d 746, 171 P.3d 1082.)
We begin with the complaint's allegations, as the pleadings "determine the scope of relevant issues" for summary adjudication. ( Nieto v. Blue Shield of California Life & Health Ins. Co . (2010) 181 Cal.App.4th 60, 74, 103 Cal.Rptr.3d 906 ; Hilton K. v. Greenbaum (2006) 144 Cal.App.4th 1406, 1412, 51 Cal.Rptr.3d 295.) Mireskandari's operative second amended complaint alleges defendants breached the standard of care by, among other things, failing to advise Mireskandari, before filing a lawsuit on his behalf, that "filing the Daily Mail case in a jurisdiction that applied California's anti-SLAPP statutes or similar statutes could result in the defendants in that case filing a motion to dismiss the complaint pursuant to those statutes; that if such a motion were granted, Plaintiff would lose his case at the pleading stage and Plaintiff would be liable for those defendants’ attorneys’ fees; and that, regardless of whether the trial court granted or denied such a motion, an appeal could result that would substantially increase the cost and delay the prosecution of the Daily Mail case." The complaint alleges defendants also failed to advise Mireskandari, "prior to the filing of the Daily Mail case," that he could have filed the action "in a jurisdiction that did not apply California's anti-SLAPP statute or any similar statute and that, by doing so, Plaintiff could avoid having his case dismissed at the pleading stage, exposure to liability for the defendants’ attorneys’ fees and the increased costs and delay resulting from a successful motion to dismiss based on California's anti-SLAPP statutes or similar statutes." With respect to causation, the complaint alleges that, as "a direct, proximate and legal result of Defendants’ breach of the duty of care owed to Plaintiff, Plaintiff has suffered damages in that Plaintiff was required to engage the services of Greenberg Glusker to oppose the anti-SLAPP motions in the Daily Mail case and thereby incurred costs and attorneys’ fees in the amount of approximately $262,000, plus additional amounts to be proven at trial, that Plaintiff would not have incurred but for Defendants’ breach of their duty of care." Defendants expressly limited their summary adjudication motion to challenging the causation element of Mireskandari's professional negligence claim. They relied principally upon our Supreme Court's statement in Viner v. Sweet (2003) 30 Cal.4th 1232, 135 Cal.Rptr.2d 629, 70 P.3d 1046 ( Viner ) that, "[i]n a litigation malpractice action, the plaintiff must establish that but for the alleged negligence of the defendant attorney, the plaintiff would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred ." ( Id. at p. 1241, 135 Cal.Rptr.2d 629, 70 P.3d 1046, second italics added.) Based on this passage, defendants argued Mireskandari could not prevail on his cause of action for professional negligence, because he did "not predicate his claim on the outcome of the suit in which defendants ... represented him"—i.e., the Daily Mail case filed in federal court. To the extent Mireskandari advanced the "alternative theory" that he would have achieved a more favorable result in the SDT disciplinary proceeding, defendants argued his claim was contrary to the test for causation under Viner and his discovery responses proved he lacked sufficient evidence to establish proximate causation.
Mireskandari opposed the motion, characterizing it as a "disguised motion in limine on damages." While he acknowledged that "part" of his claimed damages flowed from the adverse result of the SDT disciplinary proceeding, he emphasized that his complaint also sought "attorneys’ fees and costs resulting from Defendants’ negligence in filing the Daily Mail action in California and subjecting Plaintiff to the Daily Mail's Anti-SLAPP motion." He maintained defendants’ summary adjudication motion "ignore[d] the substantial attorneys’ fees" incurred in litigating the anti-SLAPP motion, and he asserted there was "no question" that, by "filing the initial complaint in California and subjecting Plaintiff to California's Anti-SLAPP statute, ... [defendants] caused Plaintiff's case against the Daily Mail to be mired in California for its entire duration and subjected Plaintiff to hundreds of thousands of dollars in legal fees and sanctions." That claim, Mireskandari argued, was viable under Sindell v. Gibson, Dunn & Crutcher (1997) 54 Cal.App.4th 1457, 63 Cal.Rptr.2d 594 ( Sindell ), where this court held attorney fees incurred in "unwanted " litigation stemming from an attorney's negligence constituted "recoverable damages," regardless of the litigation's ultimate outcome. ( Id. at p. 1470, 63 Cal.Rptr.2d 594.)
The trial court granted defendants’ summary adjudication motion, albeit with earnest reservations. The court acknowledged, as Mireskandari had argued, that defendants’ motion did not address all the allegations underpinning the professional negligence claim. Specifically, the court observed, the motion did not directly challenge the theory that "if Mireskandari had been told all these facts about anti-SLAPP, he would have taken a one-way ticket out of California ... and never considered filing ... here" and "because he wasn't told about this anti-SLAPP, he is now stuck with ... [n]ot only his own draconian attorneys’ fees, but the other side's draconian [attorneys’] fees too." However, while the trial court expressed its personal view that Mireskandari's professional negligence claim "has merit," it agreed with defendants that Viner demanded proof of a more favorable judgment in the underlying action. In view of Viner , the trial court concluded defendants were entitled to summary adjudication.
Mireskandari contends defendants’ argument and the trial court's ruling elevated dicta in Viner over the case's core holding. He maintains the actual holding of Viner is a simple recognition that the "but for" causation standard applies in transactional malpractice cases, just as it applies in litigation malpractice cases. Mireskandari argues satisfying this causation standard does not require proof that the client would have won the underlying litigation, because the avoidance of "needlessly incurred" litigation expenses may itself constitute a more favorable outcome. We agree with Mireskandari.
Viner is not a litigation malpractice case. Our Supreme Court granted review in Viner to decide "whether the plaintiff in a transactional legal malpractice action must prove that a more favorable result would have been obtained but for the alleged negligence." ( Viner, supra, 30 Cal.4th at pp. 1238–1239, 135 Cal.Rptr.2d 629, 70 P.3d 1046, first italics added.) The bulk of the Viner opinion discusses our high court's reasons for rejecting the appellate court's attempt to "distinguish litigation malpractice from transactional malpractice in order to justify a relaxation of the ‘but for’ test of causation in transactional malpractice cases." ( Id. at p. 1241, 135 Cal.Rptr.2d 629, 70 P.3d 1046 ; see id. at pp. 1241–1243, 135 Cal.Rptr.2d 629, 70 P.3d 1046.) In connection with this discussion, the Viner court referred to the familiar case-within-a-case method for establishing causation in litigation malpractice cases, observing, as defendants emphasized in their summary adjudication motion, that "[i]n a litigation malpractice action, the plaintiff must establish that but for the alleged negligence of the defendant attorney, the plaintiff would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred." ( Id. at p. 1241, 135 Cal.Rptr.2d 629, 70 P.3d 1046.) But our high court expressly cautioned that the "requirement that the plaintiff prove causation should not be confused with the method or means of doing so," clarifying, "[p]hrases such as ‘trial within a trial’ [and] ‘case within a case’ ... describe methods of proving causation, not the causation requirement itself or the test for determining whether causation has been established." ( Id. at p. 1240, fn. 4, 135 Cal.Rptr.2d 629, 70 P.3d 1046, italics added.) In view of this admonition, it is apparent that the Viner court intended only to illustrate one way by which a plaintiff establishes but for causation in a litigation malpractice case; it did not intend to prescribe a blanket method for determining whether causation has been established in every litigation malpractice action.
In any event, given that the Viner court granted review to determine the standard for causation that applies in transactional malpractice cases (see Viner, supra, 30 Cal.4th at pp. 1238–1239, 135 Cal.Rptr.2d 629, 70 P.3d 1046 ), the court's actual holding is unmistakable. As our high court explained, "In both litigation and transactional malpractice cases, the crucial causation inquiry is what would have happened if the defendant attorney had not been negligent." ( Id. at p. 1242, 135 Cal.Rptr.2d 629, 70 P.3d 1046.) Because none of the purported distinctions between litigation and transactional malpractice cases had any bearing on this inquiry, the Viner court held, "just as in litigation malpractice actions, a plaintiff in a transactional malpractice action must show that but for the alleged malpractice, it is more likely than not that the plaintiff would have obtained a more favorable result ." ( Id . at p. 1244, 135 Cal.Rptr.2d 629, 70 P.3d 1046, second italics added.) Mireskandari's professional negligence claim, premised on the allegations that he would have avoided significant litigation expenses and attorney fee sanctions, but for defendants’ negligent failure to advise him about the anti-SLAPP statute, satisfies that standard.
As defendants acknowledge, an attorney's duty to exercise the skill and care that a reasonably careful attorney would use in similar circumstances extends to prelitigation investigation and evaluation of a client's potential claims. " ‘When one suspects that another has caused harm, a preliminary investigation is usually necessary in order to know whether one has a potential legal claim, evaluate the likelihood of success, and decide whether or not to assert it . Consequently, the investigation of a potential claim is normally and reasonably part of effective litigation, if not an essential part of it.’ " ( Takhar v. People ex rel. Feather River Air Quality Management Dist. (2018) 27 Cal.App.5th 15, 28–29, 237 Cal.Rptr.3d 759, italics added.) With the duty to investigate comes an attorney's duty to evaluate and advise clients of the risks of contemplated litigation.
Charnay v. Cobert (2006) 145 Cal.App.4th 170, 51 Cal.Rptr.3d 471 ( Charnay ) is instructive. Charnay retained the defendant attorney to defend her in a limited civil suit by her neighbor to recover $18,903.64 in repair costs after land subsistence damaged a slope on subdivided property they shared with other neighbors. ( Id. at pp. 174–175, 51 Cal.Rptr.3d 471.) According to Charnay, the attorney initially advised her to settle the neighbor's action, but then, "recognizing an opportunity to generate significant attorney fees, changed his recommendation and suggested [Charnay] vigorously defend the lawsuit and pursue a cross-complaint for declaratory relief, reformation, breach of fiduciary duty and indemnity against the [suing neighbor] and other neighbors in the 60-acre tract." ( Id . at p. 175, 51 Cal.Rptr.3d 471.) After lengthy discovery, unsuccessful summary judgment motions, and a 15-day bench trial, the court in the underlying action entered a judgment against Charnay on the neighbor's complaint, her cross-complaint, and a responsive cross-complaint by the other neighbors, ordering her to pay the original $18,903.64 in repair costs, "the aggregate sum of $580,000 for the opposing parties’ attorney fees pursuant to [a] fee-shifting provision in the [subdivision's] CC&R's," and other damages. ( Id. at p. 176, 51 Cal.Rptr.3d 471.) Charnay sued her attorney for professional negligence, alleging the attorney failed to advise her that his recommended course could subject her to liability for attorney fees far in excess of the $18,903.64 at issue in the neighbor's lawsuit. She alleged, "but for [the attorney's] negligence, misrepresentations and omissions, she would have been able to settle the [original] lawsuit for no more than $25,000." ( Ibid. ) The trial court sustained the attorney's demurrer, concluding Charnay could not establish proximate causation. ( Id. at pp. 178–179, 51 Cal.Rptr.3d 471.) The appellate court reversed.
Addressing causation, the reviewing court rejected the trial court's conclusion that Charnay had to allege the neighbor would have accepted her proposed settlement. ( Charnay, supra, 145 Cal.App.4th at p. 180, 51 Cal.Rptr.3d 471.) Whether Charnay could have settled the matter for the $25,000 figure was "immaterial" to the causation issue because, under Viner , she needed "only allege that, but for [the attorney's] malpractice, she would have obtained a ‘more favorable result’ than the $600,000-plus judgment ultimately rendered against her." ( Charnay, at pp. 180–181, 51 Cal.Rptr.3d 471, quoting Viner, supra, 30 Cal.4th at p. 1244, 135 Cal.Rptr.2d 629, 70 P.3d 1046.) Charnay met this standard, having alleged that, if she had been "advised of the consequences of not prevailing, including the risk of being held liable for the opposing parties’ attorney fees were she to lose at trial, she would not have acceded to [the attorney's] advice to go forward with the litigation and would not have continued with the litigation in the face of escalating litigation costs on both sides." ( Charnay, at p. 176, 51 Cal.Rptr.3d 471.)
E-Pass Technologies, Inc. v. Moses & Singer, LLP (2010) 189 Cal.App.4th 1140, 117 Cal.Rptr.3d 516 ( E-Pass ) is also instructive. E-Pass sued the attorneys who represented it in bringing four patent enforcement actions, after a federal circuit court affirmed a judgment requiring E-Pass to pay $2.3 million in attorney fees to the opposing parties as sanctions for bringing frivolous claims. ( Id. at pp. 1143–1146, 117 Cal.Rptr.3d 516.) The trial court in the state malpractice action sustained the attorneys’ demurrer on the ground that the court lacked subject matter jurisdiction over the action because E-Pass's claims involved substantial issues of federal patent law. ( Id. at p. 1146, 117 Cal.Rptr.3d 516.) The appellate court reversed.
The reviewing court reasoned the malpractice action did not implicate questions of federal law because E-Pass's right to relief did not depend on the potential for success in the patent litigation. ( E-Pass, supra, 189 Cal.App.4th at pp. 1149–1150, 117 Cal.Rptr.3d 516.) E-Pass had alleged the attorneys " ‘failed to conduct a pre-filing investigation’ " that would have revealed " ‘there was no legitimate evidence to support any claims asserted on behalf of E-Pass,’ " and the complaint sought "to recover damages ‘caused by defendants’ misconduct [in] misleading E-Pass into bringing claims which were never viable, ... gouging E-Pass with unreasonable attorney fees and costs[,] and ... subjecting E-Pass to liability for costs and fees of the prevailing parties in the underlying actions.’ " ( Id. at p. 1147, 117 Cal.Rptr.3d 516.) The reviewing court explained, "E-Pass's complaint does not rest on the assertion that defendant's negligence caused it to lose or fail to enforce patent rights that it was entitled to enforce. The complaint proceeds on the contrary premise that there was no infringement, as the federal court held in the underlying litigation, and that E-Pass was damaged by pursuing litigation that defendants, in the exercise of reasonable care, should have advised it not to pursue ." ( Id. at p. 1150, 117 Cal.Rptr.3d 516, italics added.)
Critically, the E-Pass court rejected the contention that establishing causation and damages required proof of success in the underlying patent litigation. As with the element of breach, the court held "to prove damages E-Pass need not establish the recovery to which it would have been entitled if it had proved that its patent had been infringed. It need only show the attorney fees and other liabilities it incurred as the result of pursuing the litigation" the defendants negligently recommended. ( E-Pass, supra, 189 Cal.App.4th at p. 1151, 117 Cal.Rptr.3d 516 ; accord Sindell, supra, 54 Cal.App.4th at p. 1470, 63 Cal.Rptr.2d 594 [recognizing "well-established principle that attorney fees incurred through instituting or defending an action as a direct result of the tort of another are recoverable damages," and holding this principle applies to the tort of legal malpractice, regardless of the outcome of underlying litigation].)
As Charnay and E-Pass illustrate, when an attorney breaches the duty of care by failing to advise the client of reasonably foreseeable risks of litigation before a complaint is filed, the client need not prove the subsequently-filed litigation would have been successful to establish the causation element of his professional negligence claim. Rather, the client can demonstrate he "would have obtained a more favorable result" ( Viner, supra, 30 Cal.4th at p. 1244, 135 Cal.Rptr.2d 629, 70 P.3d 1046 ), by proving that, but for the attorney's negligence, he would not have pursued the litigation and thus would not have incurred the damages attributable to the foreseeable risks that the attorney negligently failed to disclose. (See Charnay, supra, 145 Cal.App.4th at pp. 180–181, 51 Cal.Rptr.3d 471 ; E-Pass, supra, 189 Cal.App.4th at pp. 1150–1151, 117 Cal.Rptr.3d 516.) In other words, to answer the "crucial causation inquiry" articulated in Viner —"what would have happened if the defendant attorney had not been negligent" ( Viner, at p. 1242, 135 Cal.Rptr.2d 629, 70 P.3d 1046, italics omitted)—the client may respond with evidence showing he would not have filed the litigation in the first place and he would have been better off as a result.
Not only is this conclusion consistent with the Viner court's articulation of the general rule of causation in legal malpractice cases, but it is also compelled by logic and sound policy. "An attorney's duty, the breach of which amounts to negligence, is not limited to his failure to use the skill required of lawyers. Rather, it is a wider obligation to exercise due care to protect a client's best interests in all ethical ways and in all circumstances." ( Day v. Rosenthal (1985) 170 Cal.App.3d 1125, 1147, 217 Cal.Rptr. 89.) As Mireskandari reasonably submits, if attorneys were immune from malpractice liability for failing to advise a client not to file a lawsuit , it would allow attorneys to "collect handsome fees for pursuing litigation, without regard to whether the litigation is likely to be successful, whether another remedy is available that may be more beneficial to the client, and whether the contemplated litigation exposes the uninformed client to unacceptable risks such as fee-shifting provisions." Embracing defendants’ narrow reading of what appears to be dicta in Viner would effectively endorse this absurd result—an attorney could negligently convince a client to pursue costly litigation with no hope of success, then claim his malpractice was not the legal cause of the client's injury because the litigation in fact had no hope of success.
We are mindful that the dicta of the Supreme Court, "while not controlling authority, carries persuasive weight and should be followed where it demonstrates a thorough analysis of the issue or reflects compelling logic." (Smith v. County of Los Angeles (1989) 214 Cal.App.3d 266, 297, 262 Cal.Rptr. 754 ; Candelore v. Tinder, Inc. (2018) 19 Cal.App.5th 1138, 1149, 228 Cal.Rptr.3d 336.) However, as we have explained, it is apparent from the context of the Viner court's reference to the case-within-a-case method that our high court did not intend to prescribe a blanket method for determining whether causation had been established in every litigation malpractice action, but meant only to illustrate one way by which the element could be established. (See Viner, supra, 30 Cal.4th at p. 1240, fn. 4, 135 Cal.Rptr.2d 629, 70 P.3d 1046 [the "requirement that the plaintiff prove causation should not be confused with the method or means of doing so"; "[p]hrases such as ‘trial within a trial’ [and] ‘case within a case’ ... describe methods of proving causation, not the causation requirement itself or the test for determining whether causation has been established"].) Moreover, because applying defendants’ narrow reading of this passage to pre-filing professional negligence claims would produce the absurd results outlined above, we must decline to follow that narrow reading on this point. (See Candelore , at p. 1149, 228 Cal.Rptr.3d 336 [declining to follow Supreme Court dicta where it conflicted with direct Supreme Court precedent on particular point and thus could not have been intended to cover controversy at issue].)
That is essentially what happened here on summary adjudication. Mireskandari alleged that, but for defendants’ failure to advise him about the anti-SLAPP statute, he would not have filed the Daily Mail case in California, and he would not have incurred substantial legal fees to litigate an anti-SLAPP motion, nor would he have been subject to a sanction for the opposing side's attorney fees when he lost. In moving for summary adjudication, defendants did not challenge the allegation that they breached the standard of care. Instead, they argued they could not be held liable for this alleged malpractice because the risk they negligently failed to disclose predictably came to fruition—the Daily Mail brought a successful anti-SLAPP motion and Mireskandari, saddled with his own substantial attorney fees and the Daily Mail's, dismissed the federal case. It was a classic catch-22 argument, premised, as we have explained, on an unreasonably narrow reading of an isolated passage in Viner . We must reject it. (See Boeken v. Philip Morris USA Inc. (2013) 217 Cal.App.4th 992, 1000, 159 Cal.Rptr.3d 195 [Courts must reject interpretations of case law that "make[ ] little sense": " ‘There is enough unavoidable absurdity in life. We should avoid absurdity in the law.’ "].)
In defense of the summary adjudication ruling, defendants argue they satisfied their moving burden by "countering the specific ‘hypothetical alternative’ Mireskandari elected"—namely, his claim that if he had filed the Daily Mail action in Virginia, he would have obtained evidence to change the result of the SDT proceeding. As we explain below, we find no error in the trial court's subsequent ruling that Mireskandari's claim for damages related to the SDT judgment was too speculative to be presented to a jury. However, as Mireskandari emphasized in his summary adjudication opposition, only "part" of his claimed damages flowed from the adverse result of the SDT disciplinary proceeding, and defendants’ motion failed to address the attorney fees and sanctions he incurred in connection with the Daily Mail's anti-SLAPP motion. Because summary adjudication must completely dispose of the challenged cause of action ( Code Civ. Proc., § 437c, subd. (f)(1) ), defendants could not meet their initial burden by showing only one aspect of the professional negligence claim lacked merit. (See McCaskey v. California State Automobile Assn. (2010) 189 Cal.App.4th 947, 975, 118 Cal.Rptr.3d 34 ["If a cause of action is not shown to be barred in its entirety, no order for summary judgment—or adjudication—can be entered."].)
Finally, defendants argue Mireskandari cannot establish causation because the jury in the trial of his breach of fiduciary duty claim found he "could have reasonably avoided his claimed damages, including the fees allegedly incurred to oppose the anti-SLAPP motion and the attorneys’ fee award." There are two problems with this argument. First, our review of an order granting summary adjudication is limited to "the facts [in] the record [that was] before the trial court when it ruled on that motion ," and we are prohibited from considering evidence or findings from the subsequent trial of Mireskandari's other causes of action. ( State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1034–1035, 6 Cal.Rptr.3d 441, 79 P.3d 556, italics added; Jackson v. AEG Live, LLC (2015) 233 Cal.App.4th 1156, 1165, fn. 5, 183 Cal.Rptr.3d 394.) Second, as Mireskandari correctly argues, given the jury's finding that defendants did not intentionally breach their fiduciary duty by knowingly concealing the risk of an anti-SLAPP motion, we cannot presume the jury would have awarded no damages if it had been presented with the alternative claim that defendants were merely negligent in failing to advise Mireskandari of this risk. (See Knutson v. Foster (2018) 25 Cal.App.5th 1075, 1091, 236 Cal.Rptr.3d 473 ( Knutson ) ["Because legal malpractice involves negligent conduct on the part of an attorney [citation], causation for legal malpractice is analyzed differently than causation for the intentional torts of fraudulent concealment and intentional breach of fiduciary duty."].)
We note the verdict form directed the jury to answer the mitigation question only if it found one of the defendants liable for breach of fiduciary duty on one or more of the theories Mireskandari asserted. Because the jury found only EWP liable on the theory that it "assembl[ed] ... a team of lawyers to act against him," the jury's mitigation finding was necessarily limited to that theory and it can have no preclusive effect on Mireskandari's claim that defendants were professionally negligent in failing to advise him about the anti-SLAPP statute. (Plumley v. Mockett (2008) 164 Cal.App.4th 1031, 1048–1049, 79 Cal.Rptr.3d 822 [collateral estoppel applies only when "issue [in controversy] is identical to an issue decided in a prior proceeding"; findings had no collateral estoppel effect where issue in tort action was whether salesperson misappropriated manufacturer's invention, while issue in salesperson's subsequent malicious prosecution action was whether manufacturer had reasonable cause to believe salesperson misappropriated invention].)
Mireskandari asserted a viable claim for professional negligence based on defendants’ alleged failure to advise him of California's anti-SLAPP statute before he filed his lawsuit in California. Defendants indirectly challenged the claim on a ground that does not support a judgment in their favor. They failed to meet their initial burden. The trial court erred in granting summary adjudication.
See footnote *, ante .
DISPOSITION
The order granting summary adjudication of the professional negligence claim is reversed and the case is remanded to the trial court for further proceedings consistent with this opinion. The judgment is affirmed in all other respects. The parties shall bear their own costs.
We concur:
LAVIN, Acting P. J.
Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.