Griffith v. Zavlaris

• Citation: 215 Cal.App.2d 826,30 Cal.Rptr. 517
• Parties: Robert T. GRIFFITH, Plaintiff and Appellant, v. Peter B. ZAVLARIS, Defendant and Respondent. Civ. 20675.
• Decision Date: 08 May 1963
• Court: California Court of Appeals

Page 517

30 Cal.Rptr. 517

215 Cal.App.2d 826

Robert T. GRIFFITH, Plaintiff and Appellant, v. Peter B. ZAVLARIS, Defendant and Respondent.

Civ. 20675.

District Court of Appeal, First District, Division 1, California.

May 8, 1963.

Hollander, Lipian & Horwitz, Oakland, for appellant.

Hadsell, Murman & Bishop, San Francisco, for respondent.

BRAY, Presiding Justice.

Plaintiff appeals from judgment of dismissal.

QUESTION PRESENTED.

In an action for alleged legal malpractice, when does the statute of limitations commence to run?

RECORD.

December 30, 1960, plaintiff filed a complaint against defendant attorney for malpractice. The complaint alleged that on or about February 8, 1956, plaintiff employed defendant to advise him with regard to 'the purchase of a one-third share interest' in a certain corporation; that pursuant to such employment defendant advised that the promissory note, copy of which is set forth in the complaint, could 'be executed by the plaintiff for the establishment of his one-third interest' in the said corporation. The note is dated March 29, 1956, is for $7,000, payable to plaintiff one year after date and executed by Robert Rohrig. The note gives an alternative to payment of money 'or to be payable by the transfer of seventy (70) shares of stock of the Quality Beverage Company of Santa Clara, Inc., when said stock issued to Robert Rohrig.'

The complaint further states that defendant 'could, by exercise of due diligence and skill, have advised the plaintiff the California Corporate Securities Act, Corporation Code 25000 et seq. does not permit any Company to obtain money for the issuance of securities prior to the obtaining of a permit to issue from the Division of Corporations and that any and all violations of the said Corporation Act are made criminal offenses by the said Corporate Securities Act, Corporation Code 26102, 26103'; that defendant negligently and carelessly advised plaintiff that the note could properly be executed, that the corporation could receive funds pursuant to his prepayment of $7,000 to the said corporation and that the execution of the note and the payment by plaintiff of $7,000 to the corporation was not in violation of the act and that plaintiff could receive stock pursuant to his prepayment of $7,000 to the Quality Beverage Corporation of Santa Clara, Inc.; that on May 6, 1958, plaintiff brought suit on the promissory note for $7,000 in the Santa Clara County Superior Court; that on December 31, 1959, that court ordered that neither plaintiff nor the defendant Robert Rohrig have judgment against the other because said promissory note was against the policy of law; that both parties were at fault and were in pari delicto with one another. That court ordered 'No recovery.' Plaintiff then alleged that thereby he lost the means of recovering said $7,000 and was required to pay court costs and attorney's fees. Plaintiff seeks judgment for the $7,000 and all attorney's fees and costs in that action.

Defendant demurred generally and on the ground that the action was barred by section 339, subdivision 1, Code of Civil Procedure. The court sustained the demurrer granting plaintiff 15 days to amend. ¹ Plaintiff failing to amend, defendant moved for a dismissal. The court granted the motion and judgment of dismissal was entered thereon.

COMMENCEMENT OF STATUTE OF LIMITATIONS.

The applicable statute is section 339, subdivision 1, Code of Civil Procedure, which reads, in pertinent part, that the time for commencing action is 'Within two years. (1) An action upon a contract, obligation or liability not founded upon an instrument of writing * * *.' But the question is: within two years of what? Heretofore, the only cases determining the time of commencement of the two years have held that in actions for legal malpractice the statute commences to run from the date the negligent act occurs. Among these are Hays v. Ewing (1886) 70 Cal. 127, 11 P. 602, failure of the attorney to plead absence of the defendants from the state to toll the statute of limitations set up as a defense to an action on a promissory note; Jensen v. Sprigg (1927) 84 Cal.App. 519, 258 P. 683, neglect of duty of the attorney in the management of a law suit; De Garmo V. Luther T. Mayo, Inc. (1935) 4 Cal.App.2d 604, 41 P.2d 366, negligence of attorney in obtaining a judgment in less amount than that to which the plaintiff claimed to be entitled. There the court said, 'The negligence, if any, occurred prior to entry of the judgment * * *.' (p. 606, 41 P.2d p. 366.)

In Wheaton v. Nolan (1934) 3 Cal.App.2d 401, 39 P.2d 457, an action for failure of attorneys 'to diligently and promptly commence suit and attachment proceedings,' the court did not state when the statute started to run, but based its decision upon its finding that 'the allegations made to overcome the running of the statute of limitations were insufficient under the decisions of this state to accomplish that purpose. Means and sources of knowledge of the alleged breach and injury were at all times available to plaintiffs, and ordinary diligence on their part in consulting such means and sources would have furnished them with all the information sufficient to discover the breach and commence suit within the two-year period.' (p. 403, 39 P.2d p. 457.) The action against the attorneys was filed more than four years after the plaintiffs claimed to have been damaged by the ngligence of the attorneys. There is nothing in this case which gives comfort to plaintiff's contention that the true rule is that the statute does not start to run from the date of the negligent acts but from the date of discovery thereof.

In Lally v. Kuster (1918) 177 Cal. 783, 171 P. 961, an action against an attorney for negligence in allowing an action for the foreclosure of a note and mortgage to be dismissed for delay in prosecuting it, the attorney contended that the plaintiffs' right of action against him accrued at the time he first disobeyed the orders of his client to proceed diligently. This was approximately three years before the action was dismissed. The plaintiff claimed that the right of action against the attorney did not accrue until the dismissal of the other action. The court said that the question is not 'free from difficulty, and yet where the disobedience complained of consists in delay only, the cause of action cannot be said to arise until such delay has resulted in some...