Neel v. Magana, Olney, Levy, Cathcart & Gelfand
| Decision Date | 28 January 1971 |
| Citation | 14 Cal.App.3d 813,92 Cal.Rptr. 814 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Gerald F. NEEL and Olive M. Neel, Plaintiffs and Appellants, v. MAGANA, OLNEY, LEVY, CATHCART & GELFAND, an unincorporated association, and Raoul D. Magana, Daniel C. Cathcart and Leo Gelfand, individually, Defendants and Respondents. Civ. 35465. |
Wagner & Scuderi, Los Angeles, for plaintiffs and appellants.
Jack Tenner, Los Angeles, for defendants and respondents.
This is an appeal from a summary judgment in an action for legal malpractice. The only possible justification for the judgment is the expiration of the two-year statute of limitations after the alleged negligent act. The action was promptly filed after discovery of defendants' negligence. Were the case one for the malpractice of a doctor (Huysman v. Kirsch, 6 Cal.2d 302, 312-313, 57 P.2d 908) 1, a certified public accountant (Moonie v. Lynch, 256 Cal.App.2d 361, 362, 64 Cal.Rptr. 55) 2, a title company (Cook v. Redwood Empire Title Co., 275 Cal.App.2d 452, 454-455, 79 Cal.Rptr. 888), a trustee (Cortelyou v. Imperial Land Co., 166 Cal. 14, 20, 134 P. 981), an escrow company (Amen v. Merced County Title Co., 58 Cal.2d 528, 534, 25 Cal.Rptr. 65, 375 P.2d 33), a stockbroker (Twomey v. Mitchum, Jones & Templeton, Inc., 262 Cal.App.2d 690, 725, 69 Cal.Rptr. 222) or of the agent of an insurance company (United States Liab. Ins. Co. v. Haidinger-Hayes, Inc., 1 Cal.3d 586, 595-597, 83 Cal.Rptr. 418, 463 P.2d 770), the filing of the complaint would have been timely. In its latest statement on the preferential treatment afforded lawyers by their brothers on the bench, the Supreme Court in Heyer v. Flaig, 70 Cal.2d 223, 233, footnote 7, 74 Cal.Rptr. 225, 232, 449 P.2d 161, 168, said that: '* * * The judicial rule against postponed accrual of the statute of limitations in legal malpractice actions rests upon a tenuous basis.' Even respondent's counsel, in oral argument before us, confessed '[I]t is my own candid observation that the rule for us ought to be precisely what it is as to doctors, that if we mishandle or mismanage a client's affairs * * *, we should not be able to hide behind a wall and say: 'well your two years are up and we don't care whether you kuew about it or not.''
The facts of the case at bar cry out for a change in the rule. Normally, of course, it would not be appropriate for this court to question a rule recognized, if sometimes deplored 3, in several cases at all appellate levels. However, we consider the Supreme Court's pronouncement in Heyer v. Flaig, supra, albeit dictum, a clear invitation to change.
We hasten to say at the outset that we are not concerned with the length of the statutory period, but only with the moment at which it commences. The Supreme Court in Alter v. Michael, 64 Cal.2d 480, 50 Cal.Rptr. 553, 413 P.2d 153, conclusively reaffirmed that the applicable period is two years as provided by subdivision 1 of section 339 of the Code of Civil Procedure. There seems to be an undercurrent of thought in some cases that if the statute of limitations does not start to run until the client has discovered or should have discovered the facts, the new rule would have to be accompanied by a concomitant shortening of the period to one year. (Code Civ.Proc., § 340.) Nothing, however, compels such a conclusion. We point out that in Moonie v. Lynch, 256 Cal.App.2d 361, 64 Cal.Rptr. 55, the court had no trouble establishing postponed accrual in actions against accountants, while recognizing that the applicable statutory period was two years. 4
Plaintiffs' complaint, which was filed on August 13, 1968, is very simple. It alleges that on May 25, 1961, their son died while he was a patient at a county hospital in a neighboring county. Soon afterwards they got in touch with one Delaney, an attorney practicing in that county. Delaney agreed to prosecute a malpractice action against the county. Delaney then got in touch with respondents Raoul D. Magana, Daniel C. Olney, Mitchell Levy, Daniel C. Cathcart and Leo Gelfand, who are alleged in the complaint to have been law partners or associates. 5 Respondents agreed to act as attorneys of record in plaintiffs' case against the county. They prepared a complaint and sent it to Delaney for filing. Delaney filed it on May 25, 1962. The summons was never served and in December 1965 the county procured a dismissal of the case. (Code Civ.Proc., § 581a.) Had the case come to trial plaintiffs would have prevailed. Further:
The complaint also reproduces a letter written by one of the defendants to Delaney on March 6, 1963, less than a year after the complaint was filed. It reads as follows: (Emphasis added.)
The answer admits that, after contact with Delaney, respondents prepared the 1962 complaint and gave it to Delaney for filing. It also admits that the action was dismissed for failure to serve and return the summons. Section 339, subdivision 1 of the Code of Civil Procedure is pleaded as an affirmative defense.
The motion for summary judgment simply quotes portions of the deposition of the plaintiff, Gerald F. Neel, which are to the general effect that he had never heard of respondents until December, 1967. Between 1962 and 1967 Gerald F. Neel 'had a number of conversations' with Delaney during which he would ask him 'if the law had passed or didn't pass' 6 to which Delaney would reply 'No it hasn't; I am not sure of your case yet.' Delaney never told Mr. Neel that he had associated respondents in the case. 7
In opposition to the motion for summary judgment plaintiffs filed certain portions of Delaney's deposition, which we summarize: Delaney recalled vaguely having told Mr. Neel that he 'would like to refer the case to the Magana office.' He personally filed a claim with the county. He had previously referred one other case to defendants who tried and won it. He considered that he and defendants were handling the Neel case 'as a joint enterprise, so to speak,' that 'they and [I] would work together on the case.' The reason why he did not cause the complaint to be served is that he 'goofed' or, to be technical, that he was negligent. He just forgot it because of 'this suspense business.' (See footnote 6, ante.) He was reminded of the case by the county's notice of motion to dismiss. Over the years both before and after the dismissal of the case he had a number of conversations with Mr. Neel. After the case was dismissed he 'dodged' informing Neel about the dismissal. He had realized that he had made a mistake and did not want to admit it. He implied to plaintiffs that the case had no merits. He thought it was correct to say he was 'intentionally trying to avoid telling [Mr. Neel] that it had been dismissed. 8
Defendants attempt to justify the granting of the motion for a summary judgment on two grounds: 1. that the Neels had not authorized Delaney to associate them in the action and that, therefore, no attorney-client relationship between plaintiffs and defendants had ever arisen; 2. that whatever may be said with respect to the running of the statute against Delaney, they were not bound by his fraudulent concealment of the Neels cause of action.
The first point hardly needs answering. All that really has to be said at this stage is that the mere fact that Delaney did not tell plaintiffs about his association of defendants, does not, as a matter of law, destroy the presumption that defendants were authorized to appear for plaintiffs. (Gagnon Co. Inc. v. Nevada Desert Inn, Inc., 45 Cal.2d 448, 459, 289 P.2d 466.) Even though the presumption is no longer evidence, (Evid.Code § 600 (a)), as the case just cited holds, authority for the association of defendants may arise from custom and usage or the association may have been ratified by plaintiffs. In any event, we note that the wrongful death complaint, admittedly prepared by defendants, bears the name of their firm and no other. Section 6104 of the Business and Professions Code reads as follows: 'Corruptly or wilfully and without authority appearing as attorney for a party to an action or proceeding constitutes a cause for disbarment or suspension.' Clearly defendants are estopped to rely on any lack of an attorney-client relationship with plaintiffs. (2 C.J.S. Agency § 29, b, (1).)
Defendants' second point clearly has merit if the statute of limitations started to run as soon as further prosecution of the wrongful death action became impossible by reason of the failure to...
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