DiPalma v. Seldman

• Decision Date: 31 August 1994
• Docket Number: No. B070213,B070213
• Citation: 33 Cal.Rptr.2d 219,27 Cal.App.4th 1499
• Court: California Court of Appeals Court of Appeals
• Parties: Benito DiPALMA, Plaintiff and Appellant, v. Norman SELDMAN; Garcia & Seldman, Inc., Defendants and Respondents.

Page 219

33 Cal.Rptr.2d 219

27 Cal.App.4th 1499

Benito DiPALMA, Plaintiff and Appellant, v. Norman SELDMAN; Garcia & Seldman, Inc., Defendants and Respondents.

No. B070213.

Court of Appeal, Second District, Division 3, California.

Aug. 31, 1994.

Review Denied Nov. 16, 1994.

[27 Cal.App.4th 1503] Ira D. Johns, Oxnard, for plaintiff and appellant.

Wesierski & Zurek, Thomas G. Wianecki, Irvine, and Helen G. Arens, Santa Monica, for defendants and respondents.

KLEIN, Presiding Justice.

Plaintiff and appellant Benito DiPalma (DiPalma) appeals a judgment following a grant of nonsuit in favor of defendants and respondents Norman Seldman (Seldman) and Garcia & Seldman, Inc., a professional corporation (Garcia & Seldman) (sometimes collectively referred to as Seldman).

The essential issue presented is whether the trial court properly granted nonsuit in this legal malpractice action on the ground DiPalma failed to show the judgment in the underlying case was collectible.

A plaintiff who establishes legal malpractice in prosecuting a claim must also prove careful management would have resulted in a favorable judgment and collection To the extent the alleged malpractice involved Seldman's advising DiPalma to quitclaim certain property to James Bloom (Mr. Bloom) and Marjorie Bloom (collectively, the Blooms), rather than Seldman's failure to enforce the judgment against the Blooms, the issue of the Blooms' solvency was irrelevant to whether DiPalma was damaged by counsel's legal advice.

                of same.  (Campbell v. Magana (1960) 184 Cal.App.2d 751, 754, 8 Cal.Rptr. 32.)   There is no damage in the absence of these latter elements.  (Ibid.)
                

Collectibility was an issue only to the extent the malpractice involved Seldman's failure to collect on the judgment against the Blooms. In that regard, DiPalma presented substantial evidence the Blooms were solvent during the relevant time.

The judgment therefore is reversed and the matter is remanded for trial.

FACTUAL AND PROCEDURAL BACKGROUND

Prior to October 1982, DiPalma invested approximately $237,000 with the Blooms, who were engaged in real estate development in Florida. DiPalma retained Seldman because of his concern over certain papers which Mr. Bloom gave him to sign.

Around June 1984, DiPalma entered into a settlement with the Blooms, whereby the Blooms agreed to pay $100,000 in cash and $240,000 in a four year note, to "be secured by mortgage or mortgages of BLOOM acceptable to DI PALMA." DiPalma never received the mortgages although he obtained a promissory note.

In October 1984, DiPalma was told by Seldman that if he quitclaimed his interest in the Sun Dial Motel (the motel) to the Blooms, he would get his $340,000 all at once. DiPalma agreed and signed the quitclaim deed.

In November 1984, the Blooms refinanced the Sun Dial Motel and other property, and obtained the majority of the proceeds, which amounted to $237,000.

In November 1984, DiPalma received two checks totalling $90,900. At that time, DiPalma questioned Seldman about the rest of the money, to which Seldman responded " 'it's coming.' " Thereafter, Seldman reassured DiPalma he was working on it and that DiPalma would receive the money.

In December 1984, Seldman had the settlement entered as a stipulated judgment in the United States District Court for the Central District of California.

Seldman, who is licensed only in California, did not consult a lawyer in Florida about collecting on the judgment until June 1985. Due to a nine-month delay in forwarding the judgment to a Florida attorney to commence collection work on the case, it was not until nearly 11 months after the entry of the judgment in California that the Florida attorney could pursue collection.

On October 25, 1985, DiPalma signed a substitution of attorney after Seldman advised him he could do nothing more for him. For the next three months, DiPalma was represented by William Kent, who obtained an additional $4,000 for DiPalma.

In April 1986, the Blooms filed for bankruptcy. DiPalma was listed as an unsecured judgment creditor and received no money.

In June 1986, DiPalma brought this action against Seldman for legal malpractice and breach of fiduciary duty. DiPalma alleged, inter alia: Seldman negligently advised him to sign a quitclaim deed thereby transferring any rights and interests he had in certain property to the Blooms. In reliance on Seldman's advice, DiPalma signed the quitclaim deed before he obtained payment of the $240,000 note due and owing from the Blooms, thereby losing his interest in the property to the Blooms. DiPalma also alleged Seldman was negligent in failing to timely record the judgment in Florida and otherwise in collecting the sums due pursuant to the terms of the stipulated judgment.

The matter came to a jury trial. At the close of the evidence, Seldman moved for nonsuit on the ground DiPalma had failed to present evidence the judgment against the Blooms could have been collected.

The trial court granted the motion. It "accepted all of [DiPalma's] evidence as correct" DiPalma appealed. ¹

and ruled, inter alia, Seldman committed malpractice in the delay in proving up the judgment in Florida, but DiPalma was not damaged thereby because the debt was uncollectible as the Blooms were bankrupt.

CONTENTIONS

DiPalma contends: (1) the trial court erred in granting nonsuit because collectibility was not an issue under these facts; (2) if collectibility were a necessary element of his case, the trial court erred in granting nonsuit because there was evidence of collectibility; (3) Seldman was estopped by his conduct from asserting the judgment was uncollectible; and (4) the grant of nonsuit was error as to the cause of action for breach of fiduciary duty because collectibility was not an issue in that cause of action.

DISCUSSION

1. Standard of appellate review.

Because a successful nonsuit motion precludes submission of plaintiff's case to the jury, courts grant motions for nonsuit only under very limited circumstances. (Campbell v. General Motors Corp. (1982) 32 Cal.3d 112, 117, 184 Cal.Rptr. 891, 649 P.2d 224.) A trial court may not grant a motion for nonsuit if the evidence presented by the plaintiff would support a jury verdict in the plaintiff's favor. (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830, 838, 206 Cal.Rptr. 136, 686 P.2d 656.)

" 'In determining whether plaintiff's evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give "to the plaintiff['s] evidence all the value to which it is legally entitled, ... indulging every legitimate inference which may be drawn from the evidence in plaintiff['s] favor...." ' [Citations.]" (Carson, supra, 36 Cal.3d at pp. 838-839, 206 Cal.Rptr. 136, 686 P.2d 656.)

On appeal from a judgment of nonsuit, "the reviewing court is guided by the same rule requiring evaluation of the evidence in the light most favorable to the plaintiff. 'The judgment of the trial court cannot be sustained unless interpreting the evidence most favorably to plaintiff's case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law.' [Citations.]" (Carson, supra, 36 Cal.3d at p. 839, 206 Cal.Rptr. 136, 686 P.2d 656.)

Although "a judgment of nonsuit must not be reversed if plaintiff's proof raises nothing more than speculation, suspicion or conjecture, reversal is warranted if there is 'some substance to plaintiff's evidence upon which reasonable minds could differ....' [Citations.] Only the grounds specified by the moving party in support of its motion should be considered by the appellate court in reviewing a judgment of nonsuit. [Citations.]" (Carson, supra, 36 Cal.3d at p. 839, 206 Cal.Rptr. 136, 686 P.2d 656.)

2. The element of collectibility applies only when the legal malpractice consists of mishandling a client's claim.

"The elements of a cause of action in tort for professional negligence are: (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional's negligence. [Citations.]" (Budd v. Nixen (1971) 6 Cal.3d 195, 200, 98 Cal.Rptr. 849, 491 P.2d 433; accord Jackson v. Johnson (1992) 5 Cal.App.4th 1350, 1355, 7 Cal.Rptr.2d 482.)

One who establishes malpractice on the part of his or her attorney in prosecuting a lawsuit must also prove that careful management of it would have resulted in a favorable judgment and collection thereof, as In Campbell, the plaintiff filed a personal injury action but defendant attorneys negligently allowed the mandatory five-year period for bringing the case to trial to run. (Campbell v. Magana, supra, 184 Cal.App.2d at pp. 759-760, 8 Cal.Rptr. 32.) Nonetheless, the plaintiff was not damaged by counsel's malpractice because she had no good cause of action against the defendant in the underlying action. (Id., at p. 763, 8 Cal.Rptr. 32.) Therefore, careful management of the underlying action would not have resulted in recovery of a favorable judgment. (Id., at p. 754, 8 Cal.Rptr. 32.)

there is no damage in the absence of these latter elements. (Campbell v. Magana, supra, 184 Cal.App.2d at p. 754, 8 Cal.Rptr. 32; see BAJI No. 6.37.5.)

However, the element of collectibility does not apply to every legal malpractice action. An attorney's liability, " 'as in other negligence cases, is for all damages directly and proximately caused by his negligence.' " (Smith v. Lewis (1975) 13 Cal.3d 349, 362, 118 Cal.Rptr. 621, 530 P.2d 589 overruled on other grounds by In re Marriage of...