Opinion
C039995.
7-31-2003
JESSE ZARAGOZA, Plaintiff and Appellant, v. TIMOTHY ZEFF et al., Defendants and Respondents.
Plaintiff Jesse Zaragoza appeals from judgments of dismissal of his action for legal malpractice against a number of his former attorneys. For reasons that follow, we shall affirm the judgments.
FACTUAL AND PROCEDURAL BACKGROUND
In April 2001, plaintiff filed a legal malpractice action against Timothy Zeff and the law firm of Larscheid, Buchanan & Zeff (collectively referred to as Zeff), the law firm of Hoppin & Hoppin (Hoppin), Parker White, Frederick C. Heise, Andrew Henderson, and D. Jack Haycock. The lawsuit is another in a series of legal malpractice actions filed by plaintiff.
The complaint alleges that Zeff agreed to serve as plaintiffs counsel in a legal malpractice action against Haycock; that Zeff abandoned the action, resulting in its dismissal on May 3 or 4, 2000; that the action was meritorious; and that plaintiff suffered damages of $ 1 million as a result of its dismissal. Although there are no charging allegations against any defendant other than Zeff, plaintiff served the other named defendants, apparently based upon their prior involvement in the litigation giving rise to the present action.
The allegations of the complaint are spare; factual context is provided by documents judicially noticed in superior court and in this court, as well as uncontroverted statements in the motion papers filed in superior court.
It appears that plaintiff retained Hoppin to file a lawsuit for damages plaintiff allegedly suffered because of an automobile accident in August 1991. Hoppin filed the lawsuit and settled the case for $ 82,000. Plaintiff (represented by Henderson) filed for bankruptcy in May 1993. Several days after filing for bankruptcy, plaintiff (represented by White) brought a legal malpractice action against Hoppin, alleging the $ 82,000 settlement was inadequate. The action was later dismissed because it was brought without authorization by the bankruptcy court. (The record suggests that plaintiff had failed to inform White of the pending bankruptcy proceeding.) After the bankruptcy case was closed in September 1993, plaintiff informed Henderson of the claim against Hoppin. Based upon this new information, the bankruptcy case was reopened in March 1994 to determine whether to pursue the legal malpractice action against Hoppin. Heise was appointed as counsel to the bankruptcy trustee in this regard. In March 1995, the bankruptcy case was closed again without any action against Hoppin.
In May 1995, plaintiff (represented by Haycock) filed a second legal malpractice action against Hoppin. That action was dismissed in January 1996, based upon the statute of limitations, with the trial court rejecting plaintiffs claim that the statute was tolled while his bankruptcy proceeding was pending.
In October 1999, plaintiff (appearing in propria persona) filed an action against Haycock based upon Haycocks alleged legal malpractice with respect to the second malpractice action filed against Hoppin. According to plaintiff, Zeff then agreed to represent him in prosecuting the action against Haycock. Haycocks demurrer to the complaint was sustained without leave to amend, and a judgment of dismissal was filed on March 20, 2000.
In April 2001, plaintiff (appearing in propria persona) filed the instant legal malpractice action against Zeff and the other defendants named above. The complaint alleges that "Zeff failed to exercise reasonable care, skill and diligence in representing plaintiff in the legal malpractice [action against Haycock] and negligently abandoned the legal action, . . . proximately causing and/or contributing to the dismissal of the action." Plaintiff further alleges that his legal malpractice claims against Haycock "were at all times meritorious" and that plaintiff "would have recovered judgment on such claims in the sum of $ 1,000,000 . . . ."
Zeff and the other defendants, except Haycock, demurred to the complaint. On October 23, 2001, the superior court sustained the demurrers without leave to amend. Judgments of dismissal were entered in November 2001.
Haycock brought a motion to declare plaintiff a vexatious litigant. The trial court granted the motion and required plaintiff to post a $ 50,000 bond to proceed with his action against Haycock. After plaintiff failed to post the bond, the court dismissed the action against Haycock on July 24, 2001. On August 9, 2001, plaintiff was served with notice of the judgment of dismissal. The order was appealable as to Haycock. (Code Civ. Proc., § 581d; Aetna Cas. etc. Co. v. Pacific Gas & Elec. Co. (1953) 41 Cal.2d 785, 788-789, 264 P.2d 5 [judgment final as to one party appealable].) However, plaintiffs notice of appeal was not filed until December 18, 2001, over 60 days after entry of the appealable order. (Cal. Rules of Court, rule 2(a).) Accordingly, this court granted Haycocks motion to dismiss plaintiffs appeal as to him.
Plaintiffs notice of appeal incorrectly states that he is appealing from the judgments of dismissal entered on October 23, 2001, the date upon which the trial court sustained the demurrers (a nonappealable order) but did not enter judgments of dismissal. Nonetheless, we deem the notice of appeal to be from the appealable judgments of dismissal, rather than from the nonappealable orders directing preparation of the judgments. (Holden v. California Emp. etc. Com. (1950) 101 Cal. App. 2d 427, 430-431, 225 P.2d 634 [notice of appeal from nonappealable judgment of dismissal liberally construed to refer to appealable minute order].)
Additional facts are set forth below.
This court received motions to supplement the record after respondents briefs were filed. Zeff requests, and we grant, judicial notice of documents that were judicially noticed by the trial court. Plaintiff filed two motions to augment the record with documents that are either already part of the record or were not filed or lodged with the trial court in this case. As to the former documents, augmentation would be superfluous; as to the latter documents, augmentation would be improper. (See Cal. Rules of Court, rule 12(a)(1)(A).) Plaintiffs reply papers, which we grant permission to file, do not change our conclusion. Hence, plaintiffs motions to augment the record are denied.
DISCUSSION
A. Standard of Review
"In determining whether plaintiff[] properly stated a claim for relief, our standard of review is clear: "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, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal. Rptr. 718, 703 P.2d 58 . . .; see also McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415 . . . [noting that our review is de novo].)" (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
B. Hoppins demurrer
Hoppin demurred on the grounds that the action against him was barred by both res judicata and the statute of limitations. In support of his demurrer, he requested, and the trial court granted, judicial notice of court records showing that plaintiff had twice previously sued Hoppin for legal malpractice based upon Hoppins representation of plaintiff in connection with plaintiffs 1991 automobile accident, and that both prior legal malpractice actions had been dismissed. According to documents judicially noticed in connection with the Heise demurrer, the first legal malpractice action against Hoppin was dismissed because plaintiff was in bankruptcy proceedings at the time the action was filed and, thus, lacked standing to bring the action. At the conclusion of the bankruptcy, plaintiff brought the second legal malpractice action against Hoppin, which was later dismissed because it was barred by Code of Civil Procedure section 340.6, subdivision (a) (section 340.6(a)), a statute of limitations that was not tolled during the bankruptcy proceeding.
Plaintiffs opposition did not specifically address the merits of Hoppins demurrer; instead, plaintiff simply asserted that the allegations of his complaint were sufficient to withstand a general demurrer.
The trial court sustained the demurrer without leave to amend on the ground that the action against Hoppin was barred by the doctrine of res judicata. The court did not rule specifically on whether plaintiffs action also was barred by the statute of limitations.
We conclude that the judgment of dismissal entered in favor of Hoppin cannot be upheld on the ground of res judicata. "[ A] final judgment, rendered upon the merits by a court having jurisdiction of the cause, is conclusive of the rights of the parties and those in privity with them, and is a complete bar to a new suit between them on the same cause of action." (Goddard v. Security Title Ins. & Guar. Co. (1939) 14 Cal.2d 47, 51, 92 P.2d 804.) A judgment has no res judicata effect if it is not rendered on the merits. (Id. at p. 52.) "Termination of an action by a statute of limitations is deemed a technical or procedural, rather than a substantive, termination. [Citation.] Thus the purpose served by dismissal on limitations grounds is in no way dependent on nor reflective of the merits—or lack thereof—in the underlying action. [Citation.] In fact, statutes of limitation are intended to set controversies at rest by foreclosing consideration on the merits of the claim. [Citations.]" (Koch v. Rodlin Enterprises (1990) 223 Cal. App. 3d 1591, 1595-1596, 273 Cal. Rptr. 438.) Because plaintiffs second legal malpractice action against Hoppin was dismissed based upon the statute of limitations, it was not a judgment on the merits for purposes of barring a subsequent action based upon the doctrine of res judicata.
This does not mean that plaintiff is entitled to reversal of the judgment of dismissal against Hoppin. "There is perhaps no rule of review more firmly established than the principle that a ruling or decision correct in law will not be disturbed on appeal merely because it was given for the wrong reason. If correct upon any theory of law applicable to the case, the judgment will be sustained regardless of the considerations that moved the lower court to its conclusion. [Citations.]" (Belair v. Riverside County Flood Control Dist. (1988) 47 Cal.3d 550, 568, 253 Cal. Rptr. 693, 764 P.2d 1070.)
Hoppins demurrer also rested on the statute of limitations set forth in section 340.6(a), which states: "An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. In no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist: [P] (1) The plaintiff has not sustained actual injury; [P] (2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred; [P] (3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this subdivision shall toll only the four-year limitation; and [P] (4) The plaintiff is under a legal or physical disability which restricts the plaintiffs ability to commence legal action."
"On its face, section 340.6(a) states two distinct and alternative limitation periods: one year after actual or constructive discovery, or four years after occurrence (the date of the wrongful act or omission), whichever occurs first. [Citations.]" (Samuels v. Mix (1999) 22 Cal.4th 1, 7, 989 P.2d 701.)
The allegations of plaintiffs complaint, read in light of the judicially-noticed documents, reveals that the complaint was untimely with respect to Hoppin under either limitation period. Indeed, in the legal malpractice action that plaintiff filed against Hoppin in May 1993, plaintiff alleged that his cause of action against Hoppin accrued on July 17, 1992, almost eight years prior to the filing of the complaint at issue in this appeal.
The argument in plaintiffs opening brief is limited to his suggestion the present action was timely filed against all of the defendants based on delayed accrual of his causes of action. In plaintiffs view, his causes of action against defendants did not accrue until April 2001, when he was "informed of the dismissal of the last case, in a line of successive liability cases . . . ." His argument apparently is premised on the belief that the limitations period for legal malpractice does not commence so long as the injury is in some way remediable. This premise is erroneous. (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 750, 958 P.2d 1062 [limitations period is not tolled if the injury is, in some way, remediable; actual injury may consist of impairment or diminution, as well as the total loss or extinction, of a right or remedy].)
In his reply brief, plaintiff asserts that the trial court should have granted him leave to amend so he could allege that the complaint was timely filed. The court must grant leave to amend if there is a reasonable probability that the plaintiff can amend to show timeliness, but plaintiff has failed to sustain his burden in this regard. (Zelig v. County of Los Angeles, supra, 27 Cal.4th at p. 1126.) Plaintiff simply reiterates his conclusory claim that his cause of action did not accrue until he was informed of the meaning of the dismissal in April 2001 of the action against Haycock.
Plaintiff raises a new argument in his reply brief, namely, that his mental disability tolled the statute of limitations, and that leave to amend should have been granted so he could plead facts in support thereof. As a general rule, courts of appeal do not consider arguments raised for the first time in reply briefs. (Shaw v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336, 1345, fn. 6; Neighbours v. Buzz Oates Enterprises (1990) 217 Cal. App. 3d 325, 335, fn. 8, 265 Cal. Rptr. 788.) This rule applies with equal force to unrepresented litigants. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984-985, 884 P.2d 126.) In any event, plaintiff makes no effort to show what facts he would plead to support his claim of mental impairment, as is his burden. (Zelig v. County of Los Angeles, supra, 27 Cal.4th at p. 1126.) Consequently, the judgment of dismissal as to Hoppin must be affirmed.
C. Whites demurrer
White demurred on the ground that the action against him was barred by the statute of limitations. He requested, and the trial court granted, judicial notice of certain documents from the first action against Hoppin—specifically, the May 1993 complaint for legal malpractice that White filed on behalf of plaintiff against Hoppin, and the December 1994 judgment of dismissal of that lawsuit.
White argued the demurrer should be sustained without leave to amend because the present action was filed more than one year after plaintiff should have discovered the fact of the dismissal of the first Hoppin action and four years from the actual filing of the dismissal. Plaintiffs sole opposition was that the allegations of his complaint were sufficient to withstand a general demurrer.
The court sustained the demurrer without leave to amend on the ground that it was barred by the statute of limitations set forth in section 340.6(a).
Plaintiffs only responses are that the present action was timely filed against all of the defendants based upon delayed accrual of his causes of action; that he should have been granted leave to amend so he could allege the complaint was timely filed; and that his mental disability tolled the statute of limitations. For the reasons stated in our analysis of Hoppins demurrer, these contentions lack merit.
The record establishes that the present complaint was barred by section 340.6(a); therefore, the judgment of dismissal as to White must be affirmed.
D. Heises demurrer
Heise demurred on the grounds that he owed no duty to plaintiff and that the action against Heise was barred by the statute of limitations.
According to court records submitted in conjunction with Heises demurrer, which have been judicially noticed in this court, Heises connection to the present case may be traced to his role as attorney for the bankruptcy trustee. Plaintiffs bankruptcy proceeding was closed in September 1993. In March 1994, the bankruptcy court reopened it to evaluate plaintiffs potential recovery against Hoppin. The bankruptcy court appointed Heise as attorney for the bankruptcy trustee. In March 1995, the bankruptcy court granted the trustees request to close plaintiffs bankruptcy case.
Heise argued that he owed no duty to plaintiff by reason of his appointment as attorney to the bankruptcy trustee. In the alternative, Heise argued that plaintiffs action against Heise was barred by the statute of limitations because plaintiff knew of Heises negligence, if any, no later than January 1996, when the trial court dismissed the second action against Hoppin because the statute of limitations had run while the lawsuit was property of the bankruptcy estate.
Aside from the arguments that we have rejected previously, plaintiff offers no reason why the trial courts ruling is in error with respect to Heise. The record established that the complaint was barred by section 340.6(a), and that Heise owed no duty to plaintiff in any event. (In re Wolf & Vine, Inc. (Bankr. C.D.Cal. 1990) 118 B.R. 761, 771.) Therefore, the judgment of dismissal as to Heise must be affirmed.
E. Hendersons demurrer
Henderson filed a general demurrer on the ground that plaintiff failed to allege facts sufficient to constitute a cause of action against him. Henderson further asserted the complaint could not be amended to state a cause of action against him because it would be barred by the statute of limitations. Henderson filed a declaration (which the court considered for the limited purpose of whether the complaint could be amended to state a claim), in which he recounted his connection to the case. Henderson declared that plaintiff had retained him to file his bankruptcy in 1993. After the bankruptcy case was closed, plaintiff informed him of his claim for legal malpractice against Hoppin. Henderson notified the bankruptcy trustee of this fact, which led to the reopening of the bankruptcy case. Hendersons last contact with this matter occurred in 1995, when the bankruptcy trustee informed him that the estate had abandoned its claim against Hoppin.
The present action against Henderson and the other defendants was filed in April 2001, more than four years after the conclusion of Hendersons involvement in plaintiffs bankruptcy case and the bankruptcy trustees abandonment of the estates claim against Hoppin.
Aside from the arguments that we have rejected previously, plaintiff offers no reason, nor can we detect any, why the action against Henderson is not barred by section 340.6(a). Accordingly, the judgment of dismissal as to Henderson must be affirmed.
F. Zeffs demurrer
The present complaint alleges that plaintiff entered into a contract with Zeff in October 1999 to pursue the legal malpractice action against Haycock, and that Zeff negligently abandoned the lawsuit in January 2000, leading to its dismissal in March 2000. The complaint further alleges: "The court tentatively ruled for dismissal on March 20, 2000, though the dismissal was not filed until May 3 or 4, 2000." The complaint was filed in April 27, 2001, about 13 months after the dismissal order but less than one year after the judgment allegedly was entered.
Zeff demurred on the ground that the action is barred by the statute of limitations. Zeff requested, and the trial court granted, judicial notice of the judgment of dismissal in the legal malpractice action against Haycock, which was signed and filed on March 20, 2000. According to the minute order of the hearing held that day, plaintiff was present when the court announced its decision to dismiss the Haycock action.
The judicially-noticed documents show that the complaint incorrectly alleged the dismissal was not filed until May 3 or 4, 2000. In his opposition papers, plaintiff did not challenge Zeffs showing in this regard; instead, he asserted that the "dismissal of the Zeff complaint was not known to plaintiff until explained to him on April 27, 2000 by Roger Hahn, Esq., a Woodland attorney known to plaintiff."
The court sustained the demurrer without leave to amend based on section 340.6(a).
On appeal, plaintiff reiterates his claim that he "was not informed of the dismissal of the last case, in a line of successive liability cases, as a result of Zeffs negligence and breach of duty to keep the client informed, until his April 27 Hahn meeting." Plaintiffs argument assumes the statute of limitations is tolled so long as he remained ignorant of the legal significance of the dismissal of the Haycock action. This assumption is erroneous. "The statute of limitations begins to run on certain causes of action when the injured party discovers or should have discovered the facts supporting liability. [Citation.] [P] . . . [P] The statute of limitations is not tolled by belated discovery of legal theories, as distinguished from belated discovery of facts. In legal . . . malpractice cases, the courts are often confronted with such claims that the statute of limitations has been tolled. However, the Supreme Court repeatedly has explained that it is the knowledge of facts rather than discovery of legal theory, that is the test. The test is whether the plaintiff has information of circumstances sufficient to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his or her investigation. [Citation.] If the plaintiff believes that someone has done something wrong because of the damages suffered by her, such a fact is sufficient to alert a plaintiff to the necessity for investigation and pursuit of her remedies. [Citation.]" (McGee v. Weinberg (1979) 97 Cal. App. 3d 798, 803, 159 Cal. Rptr. 86.)
Plaintiff was present when the trial court announced its decision to dismiss the Haycock action, and the formal judgment of dismissal was signed and filed that day. The order was appealable (Code of Civ. Proc., §§ 581d, 904.1, subd. (a)(1)), and commenced the statute of limitations on plaintiffs claims against Zeff. (Laird v. Blacker (1992) 2 Cal.4th 606, 615, 828 P.2d 691 [limitations period "under section 340.6 . . . commences on entry of adverse judgment or final order of dismissal"].)
Since more than one year passed from the date the judgment of dismissal was entered until the date the present complaint was filed, and plaintiff makes no showing that the statute should be tolled, the action against Zeff was barred by section 340.6(a). Accordingly, the judgment of dismissal as to Zeff must be affirmed.
DISPOSITION
The judgments of dismissal are affirmed. Plaintiff shall reimburse defendants for their costs on appeal. (Cal. Rules of Court, rule 27(a).)
We concur: BLEASE, J., RAYE, J.