Lederer v. Schneider

• Decision Date: 19 April 2018
• Docket Number: B276266
• Citation: 22 Cal.App.5th 508,231 Cal.Rptr.3d 518
• Court: California Court of Appeals Court of Appeals
• Parties: Joyce LEDERER et al., Plaintiffs and Appellants, v. Gursey SCHNEIDER et al., Defendants and Respondents.

22 Cal.App.5th 508

231 Cal.Rptr.3d 518

Joyce LEDERER et al., Plaintiffs and Appellants,

v.Gursey SCHNEIDER et al., Defendants and Respondents.

B276266

Court of Appeal, Second District, Division 4, California.

Filed April 19, 2018

Law Offices of Cohen & Marzban, Michael M. Marzban, Los Angeles; The Ehrlich Law Firm, Jeffrey I. Ehrlich for Plaintiffs and Appellants.

Chapman Glucksman Dean Roeb & Barger, Randall J. Dean, Ashley H. Verdon, Los Angeles; Clark Hill, Neda Cate and David L. Brandon, Los Angeles for Defendants and Respondents.

COLLINS, J.

INTRODUCTION

Plaintiff Joyce Lederer employed accounting firm Gursey Schneider LLP and its employee Spencer Inada (collectively, Gursey) to manage her finances. As part of their agreement, Gursey purchased insurance for Joyce¹ and her family members. Joyce requested that Gursey purchase uninsured/underinsured insurance with a policy limit of $5 million. Gursey actually purchased a policy with a limit of only $1.5 million.

In February 2010, Joyce's adult son, Jonathan Lederer, was in a motorcycle accident that resulted in serious injuries. Shortly afterward, Joyce and Jonathan discovered that the limit on the policy Gursey purchased was only $1.5 million. In January 2012, the insurance company for the other driver involved in the accident tendered the $15,000 limit of the driver's policy to Jonathan. In June 2012, the insurance company tendered the $1.5 million limit of the underinsured motorist policy to Jonathan. In March 2013, Joyce and Jonathan sued Gursey, alleging that they had been damaged because they could not collect the additional money they would have been entitled to had Gursey purchased an insurance policy with the limits Joyce had requested. Jonathan alleged that he was entitled to additional insurance benefits due to his injuries, and Joyce alleged that she was damaged by the diminished benefits because she had to financially support Jonathan.

Gursey moved for summary adjudication, asserting that the lawsuit was untimely. It argued that the cause of action accrued shortly after the accident when plaintiffs discovered that the insurance coverage Gursey purchased was less than what Joyce had requested. Plaintiffs opposed, asserting that even though they discovered Gursey's negligence shortly after the accident, they did not incur actual damages until they collected the insufficient policy benefits. The trial court agreed with Gursey, and held that plaintiffs' claims were time-barred. The court also found that Joyce did not show that she was required to financially support Jonathan as a matter of law, and therefore plaintiffs did not demonstrate a triable issue of fact as to Joyce's claim for damages. The trial court entered judgment for Gursey, and plaintiffs appealed.

We reverse the trial court's order holding that plaintiffs' claims are time-barred. As the Supreme Court has said, "Only in the unusual case will the [plaintiff] discover ... negligence without having suffered any consequential damage." ( Budd v. Nixen (1971) 6 Cal.3d 195, 201, 98 Cal.Rptr. 849, 491 P.2d 433.) This is one of those unusual cases, which distinguishes it from the more common "delayed discovery" scenario in which a plaintiff suffers damages and later discovers the damages were caused by wrongdoing. Here, although plaintiffs were aware of Gursey's alleged negligence shortly after the accident, Jonathan did not suffer actual damages as a result of that negligence until he received a payment of insurance benefits that was less than he would have received in the absence of Gursey's negligence. Plaintiffs therefore did not incur actual damages until Jonathan became entitled to the benefits of the underinsured motorist policy in June 2012. As a result, plaintiffs' causes of action against Gursey accrued less than two years before they filed this action, and the trial court erred in holding that plaintiffs' claims were time-barred.

We affirm the trial court's ruling that plaintiffs failed to demonstrate a triable issue of fact as to Joyce's legal responsibility for financial support of Jonathan. The evidence showed that Jonathan held the same job both before and after the accident, and therefore plaintiffs failed to demonstrate that Jonathan was incapacitated from earning a living and without sufficient means under Family Code section 3910.

FACTUAL AND PROCEDURAL BACKGROUND

A. Second Amended Complaint

Plaintiffs alleged in the operative complaint that they employed Gursey and related individuals and entities as financial advisors, bookkeepers, and money managers.² They further alleged that they requested and needed an uninsured/underinsured motorist policy with a $5 million policy limit. Instead, Gursey obtained an uninsured/underinsured motorist policy with only a $1.5 million limit.³ Gursey knew this coverage was insufficient, and should have obtained a uninsured/underinsured motorist policy with a $5 million limit instead. Plaintiffs also alleged that "coverage protection was only for $1,500,000 ... which was contrary to the directions/ instructions/orders of the Plaintiffs," but defendants represented to plaintiffs that insurance coverage totaled $5 million. Plaintiffs alleged that in February 2010, while the $1.5 million policy was in place, Jonathan suffered catastrophic injuries in a motorcycle accident. The driver of the other vehicle involved had a $15,000 insurance policy limit, which eventually was tendered to Jonathan. Plaintiffs' insurers then agreed to pay the entire limits of the uninsured/underinsured motorist coverage to Jonathan due to the severity and permanence of Jonathan's injuries. Plaintiffs contended they were damaged because Gursey should have purchased a policy with a $5 million limit, and paid that amount to Jonathan. Plaintiffs alleged that because the insurance proceeds did not adequately address Jonathan's expenses, Joyce was required to support Jonathan. Plaintiffs asserted causes of action for negligence, negligent misrepresentation, breach of written contract, breach of oral or implied contract, and breach of fiduciary duty.

B. Motion for summary adjudication and court ruling

1. Motion

Gursey moved for summary adjudication. It asserted that Joyce testified that before Jonathan's accident, she asked Gursey to secure vehicle insurance coverage for $5 million in case Jonathan injured anyone, and $5 million in case Jonathan was injured. Deposition testimony attached to the motion indicated that both Jonathan and Joyce requested that Gursey obtain at least $5 million in automobile insurance coverage. At the time of the accident, Joyce believed that that she had $5 million in coverage.

Gursey argued that because the basis for plaintiff's claims was accounting malpractice, the two-year statute of limitations in Code of Civil Procedure, section 339, subdivision (1) applied.⁴ Gursey asserted that plaintiffs' lawsuit, filed in March 2013, was untimely. Gursey said that the statute of limitations began to run on all claims in April 2010, when plaintiffs began exploring insurance issues relating to the accident and discovered that the coverage Gursey purchased had a lower limit than Joyce had requested. Gursey also contended that plaintiffs knew then that the damage from Jonathan's injuries would exceed the amount of all available insurance coverage. In support of this assertion, Gursey cited to a demand letter by Jonathan's counsel to the other driver's insurance company, demanding $10 million to settle Jonathan's claims. Gursey also argued that Jonathan suffered actual injury because he retained an attorney to investigate available insurance coverage and otherwise represent Jonathan's interests with respect to the accident.

Gursey further argued in its motion that there was no triable issue of fact regarding legally recoverable harm to Joyce. It asserted that only Jonathan was injured in the accident, and therefore only Jonathan had a right to the insurance proceeds. Gursey also asserted that although Joyce chose to financially support her adult son following the accident, she did not have a legal obligation to do so. Gursey attached transcripts from Jonathan's deposition, in which he testified that at the time of the accident, he was 29 years old and lived with Joyce. Before the accident, Jonathan always had been financially supported by Joyce or his father, Les Lederer. At the time of the deposition, Jonathan was living in an apartment by himself, and Joyce paid the rent. Jonathan agreed that his sources of financial support had not changed from before the accident to after.

Gursey also asserted that Jonathan was not disabled to the extent that he cannot care for himself, and in fact he "earns an income and is currently employed by his father's law firm ... to perform computer-related IT services." Gursey attached a transcript of Les's deposition, in which Les testified that before the accident, Jonathan had been employed by his law firm and did work for a retail shopping center Les owns. Les testified that Jonathan is still employed by the firm, but he works reduced hours. Les said that Jonathan does "real work"; his position at the firm was not a "made-up job." Jonathan also testified that he primarily works for his father, and he also does some work for family friends. Jonathan testified that he often works remotely, and he can do much of his work "from home or from anywhere." Jonathan testified that both before and after the accident, the money he earned by working for Les went into an account that Les controlled and Jonathan could not access. Gursey also asserted that Jonathan "has performed other computer work for third parties, as well as drone photography work." Jonathan testified that he drives a car that is not modified to accommodate any disability, and his driver's license carries no restrictions.

2. Opposition

Plaintiffs opposed the motion for summary adjudication. Regarding the statute of limitations, plaintiffs pointed out that injuries caused by the vehicle...