Pointe San Diego Residential Cmty., L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP

• Decision Date: 20 July 2011
• Docket Number: No. D056533.,D056533.
• Citation: 11 Cal. Daily Op. Serv. 5591,2011 Daily Journal D.A.R. 6608,125 Cal.Rptr.3d 540,195 Cal.App.4th 265
• Court: California Court of Appeals Court of Appeals
• Parties: POINTE SAN DIEGO RESIDENTIAL COMMUNITY, L.P., et al., Plaintiffs and Appellants, v. PROCOPIO, CORY, HARGREAVES & SAVITCH, LLP et al., Defendants and Respondents.

195 Cal.App.4th 265

125 Cal.Rptr.3d 540

11 Cal. Daily Op. Serv. 5591

2011 Daily Journal D.A.R. 6608

POINTE SAN DIEGO RESIDENTIAL COMMUNITY, L.P., et al., Plaintiffs and Appellants,

v.PROCOPIO, CORY, HARGREAVES & SAVITCH, LLP et al., Defendants and Respondents.

No. D056533.

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

May 10, 2011.

Review Denied July 20, 2011.

Vivoli & Associates, San Diego, Michael W. Vivoli and Jason P. Saccuzzo; Luce, Forward, Hamilton & Scripps, San Diego and Charles A. Bird for Plaintiffs and Appellants.

Kirby Noonan Lance & Hoge, David J. Noonan and Steven W. Sanchez for Defendants and Respondents.

HALLER, J.

Three entities sued their former attorneys alleging professional negligence and related claims.¹ The court entered judgment in defendants' favor after sustaining a demurrer without leave to amend and granting a judgment on the pleadings on plaintiffs' fourth amended complaint. The court concluded each of the claims was barred by the statute of limitations and the relation-back doctrine was inapplicable. We reverse, determining the claims related back to an earlier, timely-filed complaint.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs' malpractice action against Procopio involves Procopio's legal representation of plaintiffs in a complex, multi-party real estate litigation that spawned numerous appeals in this court. Plaintiffs filed their original complaint against Procopio while the underlying litigation was ongoing and within one year after they substituted a new counsel. Plaintiffs then filed several amended malpractice complaints. The trial court found the fourth amended complaint was untimely. Plaintiffs challenge this conclusion on appeal.

To properly resolve the appellate issues, it is necessary to summarize the history of the underlying litigation and its relationship to the complaint and amended complaints filed in the malpractice action. Because we are reviewing a judgment on the pleadings and on a demurrer, we base this factual description on the allegations of the complaint and documents that were properly the subject of judicial notice. (See Buesa v. City of Los Angeles (2009) 177 Cal.App.4th 1537, 1543, 100 Cal.Rptr.3d 86.)

This action arises from the development of a 1,000–acre master-planned community in Spring Valley, consisting of a residential community, a commercial business park, and a golf course and resort. The property planned for the residential development was initially held by plaintiff Pointe Residential, a limited partnership affiliated with plaintiff Gosnell Builders. In the mid–1990's, Pointe Residential and Gosnell Builders entered into a complex series of transactions with Palomba Weingarten and related entities in which Weingarten agreed to provide needed financing for the project. One of the Weingarten-related entities, W.W.I. Properties, LLC (WWI), acquired ownership of the residential property. Plaintiff Pointe SDMU, a limited partnership affiliated with Gosnell Builders, was formed to own and develop the “mixed use” portion of the property.

By 1997, the Gosnell and Weingarten parties were engaged in numerous disputes pertaining to the residential and mixed-use developments. In about August 1998, the three plaintiffs (Pointe Residential, Pointe SDMU, and Gosnell Builders) retained the Procopio law firm, which filed two lawsuits on behalf of these plaintiffs.

In the first case (known as the residential litigation), Gosnell Builders and Pointe Residential sued Weingarten, WWI, and Astra Management Corporation (Astra), a Weingarten-controlled corporation of which Pointe Residential was a minority shareholder. Weingarten filed a cross-complaint against Pointe Residential and Gosnell Builders.

In the second case (known as the mixed-use case), Pointe SDMU sued Atlas Homes, LLC (Atlas), an entity formed by Weingarten. Atlas filed a cross-complaint against various parties, including Pointe SDMU, Pointe Residential and Gosnell Builders.

The two cases were assigned to Superior Court Judge Robert May. In November 2001, Judge May conducted a court trial on certain equitable issues in the residential action. At the trial, the plaintiffs (Pointe Residential and Gosnell Builders) were represented by Procopio. In March 2002, the court issued a statement of decision, finding Weingarten liable for breach of fiduciary duty on a shareholder derivative claim asserted by Pointe Residential on behalf of Astra. The court deferred ruling on several accounting and punitive damage issues.

Shortly thereafter, Judge May consolidated the mixed-use case with the residential case for purposes of the next phase of the trial. The entire consolidated action (the residential and mixed-use cases) will be referred to as the “Pointe I litigation.”

In November 2002, the nonjury trial in the Pointe I litigation began, and encompassed all remaining causes of action and certain issues on punitive damages. During the trial, the three plaintiffs continued to be represented by Procopio. Pointe SDMU additionally retained a second attorney, Michael Vivoli, to serve as cocounsel for Pointe SDMU. At the trial, the parties raised numerous legal and factual issues involving their complicated business relationships, and the trial took place over the next two months.

On February 7, 2003, Vivoli was associated as cocounsel also for Pointe Residential and Gosnell Builders.

On February 25, 2003, Judge May issued a tentative decision in the Pointe I trial, finding in plaintiffs' favor on some of their claims and finding for defendants on others. On April 1, 2003, the court confirmed the tentative decision in all respects. The court then ordered an accounting and appointed a referee to submit recommendations to the court.

On about April 18, 2003, Vivoli filed a new and independent action on behalf of the three plaintiffs (Pointe Residential, Gosnell Builders, and Pointe SDMU) against Weingarten and related entities. This action, known as the Pointe II case, was filed primarily to recover certain damages resulting from Weingarten's posttrial conduct, and to recover certain damages for Pointe SDMU that it had not sought in the first Pointe I action.

On May 21, 2003, plaintiffs substituted Vivoli as their sole counsel in the Pointe I litigation (the residential and mixed-use cases). During the next year, Judge May conducted several hearings and issued additional written rulings pertaining to various unresolved issues from the Pointe I trial.

While this Pointe I litigation activity was ongoing, and 11 months after terminating their relationship with Procopio, on April 9, 2004, plaintiffs (Pointe Residential, Pointe SDMU, and Gosnell Builders) filed a legal malpractice action against Procopio. The malpractice complaint lists each of the three parties as plaintiffs and names Procopio and attorney Steven Strauss as defendants. The complaint contains a single cause of action “General Negligence” and alleges “within the last year” that “Defendants, as Plaintiffs' attorneys, failed to use due care in the handling of Pointe San Diego Residential Community, L.P. et al. v. Palomba Weingarten, et al. litigation.”

Less than four months later, in July 2004, plaintiffs filed a first amended complaint in the legal malpractice action, providing substantially more detail with respect to the nature of the malpractice claims as to each plaintiff. Those allegations essentially concerned Procopio's failure to assert specific claims and seek certain remedies in the Pointe I consolidated litigation.

Procopio filed an answer and a cross-complaint in September 2004.

On September 22, 2004, Judge May entered a final judgment in the Pointe I case. In the final judgment, the court reconfirmed its earlier findings that each plaintiff prevailed on certain claims, but were unsuccessful on other claims.

Each set of parties appealed. While the cross-appeals were pending, in December 2005, plaintiffs filed a second amended complaint in the legal malpractice action, reorganizing the causes of action and adding several additional grounds for the malpractice claim arising from Procopio's representation of the plaintiffs in the Pointe I litigation. Procopio filed an answer to this complaint.

Nineteen months later, in July 2007, this court issued its decision on the Pointe I litigation appeals, affirming the judgment in some respects, reversing the judgment in other respects, and reversing the order granting a partial new trial. (Pointe San Diego Residential Community, L.P. v. W.W.I. Properties, L.L.C. (July 11, 2007, D044695, 2007 WL 1991205).) We shall refer to this decision as the July 2007 Pointe I appellate decision. Of relevance here, this court held: (1) Judge May erred in concluding that Pointe Residential had timely alleged WWI's breach of an agreement known as the “set-aside” agreement; and (2) Judge May erred in concluding that Pointe SDMU timely alleged a permanent trespass claim and thus Pointe SDMU was not entitled to the $2.6 million damage award for this breach.

Eleven months later, on June 12, 2008, plaintiffs filed a third amended complaint in the legal malpractice action, containing eight causes of action, each of which was based on Procopio's representation of plaintiffs in the Pointe I litigation. The first seven causes of action identified specific acts or omissions alleged to constitute legal malpractice in the Pointe I litigation, several of which were based on our determinations in the July 2007 Pointe I appellate decision. The eighth cause of action alleged breach of contract based on the negligence allegations.

Procopio demurred to the first cause of action (pertaining to Procopio's failure to allege and recover damages for breach of the set-aside agreement), contending primarily that the claim was untimely. Plaintiffs opposed the demurrer, arguing that the claim was valid and timely as to Pointe Residential and Gosnell Builders because they sustained no injuries until this court filed its ...