Hege v. Worthington, Park & Worthington

• Decision Date: 19 November 1962
• Citation: 26 Cal.Rptr. 132,209 Cal.App.2d 670
• Court: California Court of Appeals Court of Appeals
• Parties: Hugo A. HEGE, Plaintiff and Appellant, v. WORTHINGTON, PARK & WORTHINGTON, William Frank Worthington, Arthur A. Park, and Leonard A. Worthington; Nye, Worthington & Park, Douglas A. Nye; Hartford Accident and Indemnity Company, a corporation; Wilson E. Taylor, Defendants and Respondents. Civ. 20282.

Page 132

26 Cal.Rptr. 132

209 Cal.App.2d 670

Hugo A. HEGE, Plaintiff and Appellant, v. WORTHINGTON, PARK & WORTHINGTON, William Frank Worthington, Arthur A. Park, and Leonard A. Worthington; Nye, Worthington & Park, Douglas A. Nye; Hartford Accident and Indemnity Company, a corporation; Wilson E. Taylor, Defendants and Respondents.

Civ. 20282.

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

Nov. 19, 1962.

As Amended on Denial of Rehearing Dec. 11, 1962.

Hearing Denied Jan. 16, 1963.

John R. Swendsen, San Francisco, for appellant.

Hadsell, Murman & Bishop, San Francisco, for respondents Worthington, Park and Worthington, William Frank Worthington, Arthur A. Park, Leonard A. Worthington and Nye, Worthington and Park.

Steinhart, Goldberg, Feigenbaum & Ladar, Neil E. Falconer, San Francisco, for respondents Hartford Accident & Indemnity Co. and Wilson Taylor.

BRAY, Presiding Justice.

Plaintiff appeals from a judgment in favor of defendants after order sustaining demurrers to third amended complaint. ¹

QUESTIONS PRESENTED.

1. Do the third and fourth counts in the third amended complaint state causes of action against defendants Worthington, Park & Worthington, William Frank Worthington, Arthur A. Park, Leonard A. Worthington, and Nye, Worthington & Park, hereinafter referred to collectively as 'Worthington'?

2. Does the second count in said complaint state a cause of action against defendant Hartford Accident & Indemnity Company and does the fourth count state a cause of action against Hartford and Wilson E. Taylor, hereinafter referred to collectively as 'Hartford'?

1. THE WORTHINGTON DEMURRERS.

The third count is against defendants Worthington as attorneys for allegedly allowing the statute of limitations to run on plaintiff's claims against the contractors whom in the first count plaintiff sued for alleged failure to complete a residence, ² the architect therefor, and defendant Hartford, which issued the bond guaranteeing due performance by the contractors. The court sustained a general demurrer to this count. Plaintiff declined to amend.

The count alleged that the defendants Worthington were attorneys, and were orally engaged by plaintiff to obtain redress from said contractors, architects and sureties. Worthington agreed to prosecute plaintiff's claims properly. The attorney-client relationship existed from January, 1951, to January, 1956. It is then alleged that Worthington failed to use ordinary care in the prosecution of the claims so that the statute of limitations ran against plaintiff thereon and plaintiff's rights were lost to his damage of $63,897.37, and of other sums because of the 'passage of unreasonable time.' It is alleged that Worthington concealed the fact that the statute had run and that plaintiff did not discover his loss until January, 1956.

The contentions of defendants which the court followed in sustaining Worthington's demurrer were that the count did not state a cause of action because plaintiff failed to allege (1) that the contractors and the surety would have pleaded the statute of limitations had the action against them been filed, and (2) that the action against them would have been successful.

In Lally v. Kuster (1918) 177 Cal. 783, 171 P. 961, an action by a client against her attorney for negligence in the collection of a note and mortgage, the attorney contended that the client could not claim that she had suffered a loss unless first she brought suit upon the note and mortgage and the suit was dismissed because of the statute of limitations. The court in reversing a judgment of the lower court in favor of the attorney stated, '* * * it does not follow that the appellant would have to wait until it was finally determined in court that these rights were valueless * * *.' (P. 791, 171 p. 964.)

As to the first contention an allegation that the defendants in such a suit if brought would plead the statute of limitations would appear not to be necessary. Reasonably, it must be assumed that the statute would have been pleaded. Moreover, such an allegation would be a conclusion of the pleader of a value not as great as the fact itself, namely, that the statute had run.

The second contention is a more serious one. Feldesman v. McGovern (1941) 44 Cal.App.2d 566, 112 P.2d 645, was an action by a client against his attorney for damages for allegedly failing to file a petition for the client's discharge in bankruptcy. The court stated that the complaint failed to state a cause of action because 'in an action brought by a client against his attorney for the latter's alleged negligence in failing to perform some act in behalf of the client, the complaint must not only specify the act, but must specifically allege and the plaintiff must prove that if the attorney had performed the act it would have resulted beneficially to the client.'

Campbell v. Magana (1960) 184 Cal.App.2d 751, 8 Cal.Rptr. 32, was an action by a client against an attorney for the alleged negligent handling of plaintiff's personal injury suit. The court quoted from Lally v. Kuster, supra, 177 Cal. 783, 171 P. 961, which was an action for damages against an attorney for alleged neglect in the collection of a mortgage. The court there said concerning a suit by a client against an attorney for negligence in conducting the collection of a claim, that the client must allege and prove that the failure to collect was due to the culpable neglect of the attorney, 'and that, but for such negligence, the debt could, or would, have been collected.' (184 Cal.App.2d p. 754, 8 Cal.Rptr. p. 34.) The court reviewed a number of cases upon the subject and quoted from 45 A.L.R.2d, section 5, page 21, to the effect that in this character of case the client has the 'burden involving, usually, the difficult task of demonstrating that, but for the negligence complained of, the client would have been successful in the prosecution or defense of the action in question.'

In Modica v. Crist (1954) 129 Cal.App.2d 144, 148, 276 P.2d 614, the Feldesman case is explained as holding that the failure to plead that the bankruptcy discharge would have been granted was really a failure sufficiently to plead proximate cause; that is, because the granting of the petition was not mandatory. This squares with the general tenor of the Modica case which seems to say that attorney's malpractice is pleaded the same as any other negligence action: duty, breach of duty, proximate cause, damage. (See 1 Witkin, Cal.Procedure, p. 74, expressing doubt as to the precedent value of the Feldesman case; see also 2 Witkin, Cal.Procedure 1961 Supp. p. 24; 2 Witkin Cal.Procedure p. 1255 et seq.; Leavitt, The Attorney as Defendant (1961) 13 Hastings L.J. 1, 23.)

It would seem that in an action by a client against his attorney the complaint would not necessarily be subject to general demurrer for not alleging the conclusion that the plaintiff would have been successful in the outcome of the action which it is claimed the attorney failed to file in time. But the proper test of a sufficient complaint would be whether the complaint sets forth facts from which it can be deduced that the client could have recovered a judgment. Here, plaintiff alleged his entry into a contract a copy of which was annexed to the complaint, with the contractors for the construction of a certain residence, in accordance with plans and specifications prepared by the architect. He then alleged that he had performed his part of the contract, that the contractors defaulted by failing, neglecting and refusing to complete the construction of the residence, and sets forth 29 particulars in which the contract had not been completed. He alleges damage to his draperies through rainwater which he alleges entered the residence because of its uncompleted condition; that because of the latter he had not used the residence; and alleged the amount of damages caused thereby.

From such allegations it would appear that plaintiff had a good cause of action against the contractors, had a complaint against them been filed in time. While the allegations of proximate cause resulting from Worthington's alleged negligence are possibly not as strong as they might be, it does appear that plaintiff had a good cause of action against the contractors which, it is alleged, was unenforceable because of the alleged failure of Worthington to file the action. The count was not vulnerable to general demurrer.

The fourth count is against Worthington, Hartford and the latter's attorney Taylor for conspiracy to allow plaintiff's rights to be lost by the passage of time and the running of the statute of limitations. The court sustained a general demurrer to this count, and plaintiff declined to amend.

This count includes by reference the allegations concerning the failure of the contractors to perform the contract. It alleges that at the time of the employment of Worthington by plaintiff, Worthington had already agreed and conspired among themselves, and with Hartford and its attorney, to allow the statute of limitations to run on plaintiff's claims; and that because of that conspiracy they did allow the statute to run. It then alleges that plaintiff was thereby damaged in certain sums. The count also asks for punitive damages. It alleges that the conspiracy was not discovered until January, 1956, because of concealment by Worthington until that time.

To state a cause of action for conspiracy facts must be alleged which show the formation and operation of a conspiracy, the wrongful acts of any of the conspirators pursuant thereto, and damage resulting therefrom. (Orloff v. Metropolitan Trust Co. (1941) 17 Cal.2d 484, 488, 110 P.2d 396; see also 2 Witkin, Cal.Procedure, p. 1457.) The gist of the action is damage. (Orloff, supra.) No cause of action exists for conspiracy itself; the pleaded facts must show something which, without the conspiracy, would give rise to a cause of action. (Agnew v....