Slovensky v. Friedman

• Decision Date: 19 September 2006
• Docket Number: No. C049442.,C049442.
• Citation: 49 Cal.Rptr.3d 60,142 Cal.App.4th 1518
• Court: California Court of Appeals Court of Appeals
• Parties: Tamara SLOVENSKY, Plaintiff and Appellant, v. Morton L. FRIEDMAN et al., Defendants and Respondents.

49 Cal.Rptr.3d 60

142 Cal.App.4th 1518

Tamara SLOVENSKY, Plaintiff and Appellant, v. Morton L. FRIEDMAN et al., Defendants and Respondents.

No. C049442.

Court of Appeal, Third District.

September 19, 2006.

Carlson, Calladine & Peterson and Guy D. Calladine, San Francisco, for Plaintiff and Appellant.

Boyd & Kimball, Betsy S. Kimball and David E. Boyd, for Defendants and Respondents.

SIMS, J.

After settling a toxic mold personal injury complaint against an apartment complex, plaintiff Tamara Slovensky filed a tort action against her attorneys, pleading two counts (styled "Cause[s] of Action"). Her first count, for legal malpractice, alleged defendants negligently failed to obtain an adequate recovery. Her second count, for breach of fiduciary duty, alleged defendants misrepresented and concealed material facts in the course of the litigation. As to both counts, she sought damages and "other and further relief."

Defendants (Morton L. Friedman, C. Brooks Cutter, the law firm of Friedman, Collard, Cutter & Panneton, and Cutter Law Firm) moved for summary judgment, maintaining plaintiff could not prove damages because the statute of limitations had run on plaintiff's claims before she had consulted defendants. Defendants did not move for summary adjudication in the alternative or adduce evidence to negate plaintiff's allegations of breach of fiduciary duty.

The trial court granted summary judgment, agreeing with defendants that plaintiff's inability to prove damages for malpractice defeated her entire action. The court also found plaintiff could not seek disgorgement of attorney's fees for fiduciary breach because she had not pled entitlement to it.

We shall affirm. We agree with the trial court that the statute of limitations had run on plaintiff's toxic tort claims before she consulted defendants. Although disgorgement (a remedy rather than an element of a cause of action) need not be specifically pled, it is available only if the breacher's misrepresentation or concealment damaged the plaintiff. Plaintiff cannot prove damages from any such misrepresentation or concealment because defendants obtained a recovery for her in the underlying action to which she was not legally entitled. For the same reason, her malpractice claim fails. Therefore, summary judgment was properly granted.

STANDARD OF REVIEW

A defendant moving for summary judgment must show that the plaintiff cannot establish one or more elements of the cause of action or cannot refute an affirmative defense established by the defendant. (Code Civ. Proc., § 437c, subd. (o).) "From commencement to conclusion, the moving party bears the burden of persuasion that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. There is a genuine issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 845, 107 Cal.Rptr.2d 841, 24 P.3d 493, fn. omitted.) Our review is de novo. (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476, 110 Cal.Rptr.2d 370, 28 P.3d 116.)

FACTUAL AND PROCEDURAL BACKGROUND

The complaint

Plaintiff alleged as to both counts:

In March 2000, she retained defendants to prosecute her toxic mold personal injury action against Sequoia Fairway Apartments (The Fairways).¹ Defendants said they had about 20 other plaintiffs with claims against The Fairways and would accept no more after her; in fact, they took on further clients and ultimately represented 41 other plaintiffs in 21 similar actions against The Fairways. Defendants did not obtain a waiver from plaintiff of the conflict inherent in the representation of multiple plaintiffs or advise her to consult independent counsel on this point before retaining them.

In August 2001, defendants told plaintiff they had scheduled a mediation. She had not known of this or consented to it in advance. She objected that defendants had not adequately analyzed her case and only sought a quick settlement. She demanded that they evaluate and treat her case separately, not as part of a global pool. They assured her they were doing so.

On August 28, 2001, defendants faxed a letter protected by attorney-client privilege to her treating physician's office without plaintiff's knowledge or consent. The letter contained privileged, private facts about plaintiff's case unrelated to and unnecessary for her treatment.

On August 31, 2001, defendant Cutter met with plaintiff and pressured her to sign an agreement to a proposed settlement in a specified sum. Plaintiff gave Cutter the agreement on the condition that he could not use it without further written consent from her. Defendants did not advise plaintiff that she could or should obtain independent legal advice before signing the agreement.

During September 2001, Cutter harassed plaintiff with unannounced home visits and numerous telephone calls, exerting enormous pressure on her to agree to settle her case for the proposed amount. To stop Cutter's harassment, plaintiff agreed to come to his office on September 7, 2001. She told him she could not sign a settlement agreement and release because neither she nor defendants had adequate information about her medical condition and prognosis.

On September 19, 2001, plaintiff's doctor told her that Cutter had informed him plaintiff would be settling her case for the amount specified in defendants' letter to the doctor, which was more than any of defendants' other Fairways clients would receive. This information was within the attorney-client privilege, was not authorized for release to plaintiff's doctor, and was not necessary for his treatment of plaintiff.

As part of defendants' pressure campaign, defendants told plaintiff erroneously that her case was not being treated as part of a global settlement, but was being evaluated individually and independently; that the medical information she had was not reliable; and that she was not as sick from toxic mold exposure as she had been led to believe.

On September 20, 2001, at Cutter's insistence, plaintiff met again with him. He again attempted to pressure her into settling the case. She objected that they did not yet have adequate medical information. He made further erroneous statements to her about her condition and its future course. He also misstated to her that he had negotiated with defendants to win the stated amount for her and that it was a better settlement than those of younger and sicker plaintiffs. When she continued to resist, Cutter brought defendant Friedman into the meeting. Comparing her case to the recent World Trade Center bombings, Friedman told her she was fortunate to be alive and should settle. Plaintiff ultimately signed the pre-printed settlement agreement and release.

On November 10, 2001, Cutter sent plaintiff a limited power of attorney to enable him to endorse the jointly payable settlement check and secure his fee. Plaintiff did not sign the document.

On December 25, 2001, plaintiff received a letter from Cutter stating that The Fairways' attorneys had reissued the check with the Cutter Law Firm as sole payee, at Cutter's request; defendants had cashed the check and taken out their fees and plaintiff's proportionate share of costs. The rest was deposited into a separate account at Wells Fargo Bank in plaintiff's name, where it remains. These actions were done without plaintiff's knowledge or consent.

Defendants failed to exercise the care, skill, knowledge, competence, and diligence required of them by the attorney-client relationship. Their representation of plaintiff violated California Rules of Professional Conduct 3-310.² They breached their duty of confidentiality in violation of Business and Professions Code section 6068.³ They coerced plaintiff to settle the case and converted the settlement monies. But for defendants' conduct, plaintiff would have obtained a recovery in her case greater than that obtained by defendants, free of the taint of conflict of interest and conversion.⁴

Plaintiff prayed for compensatory and punitive damages, costs of suit, and "such other and further relief as the Court may deem proper."

The summary judgment motion

Defendants moved for summary judgment, asserting: (1) Plaintiff's cause of action for legal malpractice lacked merit because plaintiff could not prove causation for damages: she could not have obtained a better result absent the alleged malpractice because her underlying action was barred by the statute of limitations as of the date she retained defendants. (2) Plaintiff's cause of action for breach of fiduciary duty had no existence apart from her malpractice cause of action and failed on the same ground.

Defendants' separate statement of undisputed facts adduced evidence that plaintiff had notice of toxic mold in her apartment and resulting physical ailments well over one year before she retained defendants⁵; she admitted her prior knowledge of the relevant facts to defendant Cutter on July 28, 2001; and her case settled for $340,000. The separate statement did not adduce any evidence as to breach of fiduciary duty.

Plaintiff's opposition

Plaintiff asserted and offered evidence purporting to show that she did not realize she had suffered toxic mold exposure until shortly before she retained defendants and triable issues of fact existed as to whether she should have known earlier; however, she did not dispute most of defendants' evidence that during the period 1997 to 1999 she was aware of the facts that she later claimed as proof of toxic mold exposure and damage.⁶ She also asserted defendants' breaches of fiduciary duty entitled her to fee disgorgement even if she could not prove malpractice damages, and defendants' failure to address her fiduciary breach cause of action was enough to defeat summary judgment.

Defend...