Sommer v. Brave
Filed 7/30/12 Sommer v. Brave CA4/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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COURT
OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
KATHLEEN SOMMER,
Plaintiff and Appellant,
v.
GEORGINE F. BRAVE et al.,
Defendants and Respondents.
D058476
(Super. Ct. No. 37-2009-00099705-
CU-PN-CTL)
APPEAL from
a judgment of the Superior Court
of
County, Ronald S. Prager, Judge. Reversed.
Plaintiff
and appellant Kathleen Sommer brought a legal malpractice action against
defendant Georgine F. Brave and her firm, Brave, Weber & Mack, APC
(together, Brave). This appeal arises
from a defense summary judgment
granted on the ground that the action was barred by the limitations period
established by Code of Civil Procedure section 340.6, subdivision (a)(1)
(one-year statute of limitations, tolled until actual injury sustained; Code
Civ. Proc., § 437c; undesignated statutory references will be to this
code).
Brave's
legal services were rendered in 2006 and 2007, when she represented Sommer's
mother, Gloria Moser (Gloria), in a real property and family law transaction
involving transfer of title of Gloria's 50 percent interest in a condominium
(the property) that Gloria shared with her husband, Bill Moser (Moser). It is not disputed that Gloria intended that
her daughter, Sommer, receive her entire interest in the property, by way of a
related trust that was prepared by different counsel. After Gloria died in January 2007, numerous
disputes about ownership of the property between Sommer and Moser ensued, and
Sommer repeatedly asked Gloria's attorneys about the transfer of her
interests. Sommer also communicated in
2007 with Moser's attorney and in 2008 with a friend of Moser, about her claim
to the property.
However, it
was not until the fall of 2008 that Sommer retained her own attorney, not until
May 2009 that she filed a petition to settle Gloria's assets in probate court,
and not until April 2010 that the matter with Moser was formally settled and
she took compensation for a 25 percent interest in the property. Brave thus argued that Sommer's October 2009
complaint was untimely filed, and the trial court agreed, granting summary
judgment under section 340.6, subdivision (a).
However, the trial court did not reach any alternate arguments about
whether Brave had breached the applicable standard of care through the manner
in which the quitclaim deed transaction was structured, or whether there was
any proximate causation of injury
to Sommer.
The
limitations period of section 340.6 for legal malpractice actions begins to run
"after the plaintiff discovers, or through the use of reasonable diligence
should have discovered, the facts constituting the wrongful act or
omission." (§ 340.6, subd.
(a).) Section 340.6, subdivision (a)(1)
further provides that the applicable statutory time period does not begin to
run until the plaintiff has "sustained actual injury." (Jordache
Enterprises v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739,
749-751 (Jordache) [principles of tolling
apply to evaluate when the limitations period is triggered by the sustaining of
harm or "actual injury."].)
Normally,
where it is disputed when a malpractice plaintiff has sustained actual injury
and whether the harm was a consequence of the defendant attorney's negligence,
a question of fact is presented. (
588-591 (Adams).) However, where the facts are undisputed,
"the trial court can resolve the question as a matter of law in accordance
with the general principles governing summary judgment." (Id. at
p. 591.)
As we will
explain, this record reveals that triable issues of material fact remain for
resolution about whether and when Sommer sustained actual injury from the
manner in which Brave prepared the transactional documents, causing Sommer to
"receive" a lesser interest than Gloria intended to give her. Because of our application of limitations
rules to this record, we need not discuss any issues about the alleged breach
of professional duty or causation. We
reverse the summary judgment for further appropriate proceedings in the trial
court.
FACTUAL
AND PROCEDURAL BACKGROUND
A. Legal Representation of Gloria by Brave and
Others
In late
2006, Gloria was living with her husband Moser in the property, which they
owned in joint tenancy, and Gloria was ill with terminal cancer. She desired to leave her share of the
property to Sommer, her daughter from another marriage. Stepfather Moser did not agree with this
plan.
To address
the property interest dispute, Gloria retained Brave to file a petition for
legal separation from Moser, and to prepare documents changing title of the
property from joint tenancy to a tenancy in common. As part of the transaction, Gloria also hired
a trust attorney, Karen Ladner.
name="_ftnref1" title="">[1]
Brave
prepared and Gloria signed a quitclaim deed and notice of preliminary transfer
of title, designed to sever the joint tenancy between Moser and Gloria, and to
create instead a tenancy in common, to enable Gloria to pass her half on to
Sommer. (Civ. Code, § 683.2, subd.
(a) [joint tenant may sever joint tenancy interest in real property without
consent of other joint tenants by meeting certain requirements of writing and
recording].) The deed expressly provided
that Gloria, as a joint tenant, quitclaimed her 50 percent interest to: "William H. Moser and Gloria Moser,
. . ." (Italics added; if Gloria
had deeded it to herself alone, the result would likely have been different,
although Brave still disputes this.)
Sommer assisted her mother by having the deed recorded at the San Diego
County Recorder's office on December 5, 2006, and she kept a copy.
Next, trust
attorney Ladner prepared a trust to allow Gloria's assets eventually to pass to
Sommer upon Gloria's death. Regarding
the property, Ladner prepared a second quitclaim deed to convey Gloria's
interest in it to her trust, and it was recorded on December 27, 2006.
Gloria died
on January 4, 2007. Ladner prepared a
third quitclaim deed, recorded on January 25, 2007, conveying the property
interest from Gloria's trust to Sommer, who was trustee and also the
beneficiary of the trust.
As of 2007,
Sommer believed that she and her daughters were still Moser's heirs, as in his
2005 will, but Moser then told her she would not get any of the property, or
alternatively, that he believed his interest was now 75 percent. After some of Gloria's relatives alarmed
Moser by coming to the property in early 2007, Moser changed the locks and did
not give a key to Sommer. Moser raised
the idea that Gloria's change of title might not have been valid, since she
passed away so soon thereafter and might not have been competent to make
transactions.
title="">[2]
In January
2007, Moser's first attorney, Stein, told Sommer that she may not own half the
property and the matter should go to probate.
Over the rest of the year and until March 2008, Sommer sent various
e-mails to Brave and to Ladner asking why he would say that, as she did not
understand why the recorded title in the trust and in her name could be
disputed. During 2006-2008, Sommer
sometimes checked the status of title at the recorder's office, to see if Moser
had changed his will or trust. She
continued to ask her mother's attorneys why Moser was asserting he owned the
entire property and whether he could change the recorded status
unilaterally. In February of 2007,
Ladner told Sommer that if the deed prepared by Brave was accurately prepared
from the most current prior deed, it should be fine, although Ladner said she
had not seen the previous deed.
Sommer
learned in September 2008 that Moser had written a new will and recorded
property transactions for his own newly created trust, under which she was not
a beneficiary. In October 2008, Sommer
retained Beth Atuatasi (her probate attorney), who communicated with Moser and
his attorneys about the property interests.
In January 2009, Moser's attorney Michael Hickman wrote the probate
attorney notifying her that at most, he believed Gloria's trust held only a 25
percent interest in the property, and Sommer's claim to it would be subject to
substantial offsets. There were also
disputes about promissory notes and about other property in which Sommer was
claiming an interest.
In early
2009, Sommer's probate counsel asked Brave for a declaration to explain it had
been Gloria's intent to sever the joint tenancy of the property, and change it
to tenancy in common with Moser. Brave
required Sommer to execute a retainer agreement for preparation of such a
declaration, and the declaration was used in support of the probate petition.
Sommer's
probate attorney filed the petition in May 2009, alleging disputes about
ownership of the property and other assets.
In April 2010, Sommer and Moser entered into a written settlement of
their disputes in the probate action, but without any formal ruling or court
findings being made regarding the state of title or ownership of the
property. Under the settlement, Sommer
accepted payment from Moser of $250,000 for all interests, of which she
designated $120,000 as representing the lost 25 percent share of the property
(worth $480,000 total). Other payments
by Moser under the settlement agreement represented other disputed assets of
Gloria.
B. Complaint Filed; Summary Judgment Proceedings
On October
5, 2009, while her probate case was still pending, Sommer filed her action for
professional negligence damages against Brave and Ladner, alleging the
quitclaim deeds and trust they had prepared were defective and caused damage to
Sommer. She pled discovery of her injury
no earlier than October 31, 2008.
name="_ftnref4" title="">[4]
In
September 2010, Brave moved for summary judgment, asserting (1) the applicable
one-year statute of limitations (§ 340.6, subd. (a)) barred the action, and (2)
Sommer was unable to prove any breach of a professional duty or causation of
harm. Brave contended it could be
determined as a matter of law that she had a meritorious affirmative defense of
limitations, because Sommer had discovered, or should have discovered, the
facts constituting any wrongful act or omission more than one year before the
complaint was filed. Specifically, Brave
contended Sommer knew or should have known of the relevant facts as early as
January 31, 2007, when Moser's first attorney (Stein) rejected Sommer's
position about her 50 percent ownership, or by March 14, 2008, when Moser's
friend told Sommer that Moser thought she was trying to take his property and
the change by her mother was probably invalid.
Brave
relied on Civil Code section 1207 to contend that when the quitclaim deed was
prepared and recorded in December 2006, Sommer was placed on notice of the
status of the property and she must have reasonably understood that the deed
was dispositive of her interests, and that any type of problem with the deed
might adversely affect her interests.
of joint tenancy between spouses].)
Sommer
opposed the motion on the ground that the applicable statute of limitations had
not run, because she was not placed on notice of any facts about the role that
legal malpractice by Brave might have played in the property dispute until
approximately October 2008, when she was compelled to retain her probate
counsel.
she was injured until January 2009, when Moser's next attorney rejected her
claim. In reply papers, Brave raised
evidentiary objections to portions of Sommer's declaration.
C. Ruling
After
argument, the trial court issued a ruling in favor of Brave, determining that
the action filed October 5, 2009 was time-barred because Sommer
discovered, or through the use of reasonable diligence should have discovered,
the facts constituting Brave's alleged malpractice no later than January 31,
2007, when Moser's first attorney told Sommer she may not own half of the
property. Sommer knew her ownership
interest in the property was predicated on the
knew that Moser was disputing her ownership interest in the property, based
upon questions about the validity of the December 2006 quitclaim deed. The court ruled that Sommer was contradicting
her own pleading (Oct. 2008 discovery) by claiming late discovery (Jan. 2009)
of any malpractice injury.
The trial
court relied on Civil Code section 1207 as providing constructive notice to
Sommer of the contents of the quitclaim deed, notwithstanding any defects in
the execution of the instrument. Off and
on through 2006-2008, Sommer spent time researching title at the county
recorder's office. The court ruled she
had not provided sufficient evidence to raise a
of her knowledge about the property interest and about Brave's role in the
transaction.
In its
ruling, the trial court sustained several evidentiary objections lodged by
Brave in reply to Sommer's opposition papers, particularly portions of Sommer's
declaration (speculation, legal conclusions, lack of foundation).
granted on limitations grounds, and the court did not rule upon any issues
about breach of professional duty in preparing the deed or causation of harm.
Sommer
appeals the judgment.
DISCUSSION
Under section
340.6, subdivision (a)(1), the date of actual injury occurs when a right,
remedy or interest is lost. (
see 3 Legal Malpractice (Mallen & Smith, 2012 ed.) § 23:12, pp.
429-437 (Mallen & Smith).) We
inquire whether the trial court correctly found that only one reasonable
inference could be drawn from this essentially undisputed set of facts, that
Sommer must reasonably be deemed to have learned of all facts essential to her
claims against Brave earlier than one year before the complaint was filed
October 5, 2009. We examine the record
to determine the point or points at which Sommer arguably sustained actual
injury or loss of her property rights due to legal malpractice, as alleged.
I
A. Standard of Review
Section
437c provides for a motion for summary judgment to be granted "if all the
papers submitted show that there is no triable issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law." (§ 437c, subd. (c).) "[I]n moving for summary judgment, a
'defendant . . . has met' his 'burden of showing that a cause of action has no
merit if' he 'has shown that one or more elements of the cause of action . . .
cannot be established, or that there is a complete defense to that cause of
action. Once the defendant . . . has met
that burden, the burden shifts to the plaintiff . . . to show that a triable
issue of one or more material facts exists as to that cause of action or a
defense thereto. The plaintiff . . . may
not rely upon the mere allegations or denials' of his 'pleadings to show that a
triable issue of material fact exists but, instead,' must 'set forth the
specific facts showing that a triable issue of material fact exists as to that
cause of action or a defense thereto.' " (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849; § 437c, subd.
(p)(2).)
We review
the court's summary judgment ruling de novo, "considering all of the
evidence the parties offered in connection with the motion . . . and the
uncontradicted inferences the evidence reasonably supports." (Merrill
v. Navegar, Inc. (2001) 26
Cal.4th 465, 476.) "[S]ummary
judgment may not be granted by the court based on inferences reasonably
deducible from the evidence, if contradicted by other inferences or evidence,
which raise a triable issue as to any material fact." (§ 437c, subd. (c).)
In deciding
if the plaintiff has demonstrated the existence of a triable issue of fact, the
courts do not "weigh the evidence in the manner of a fact finder to
determine whose version is more likely true.
[Citations.] Nor may the trial
court grant summary judgment based on the court's evaluation of credibility. [Citations.]
[¶] The court must consider not
only the bare evidence, but also the reasonable inferences deducible from the
evidence [citation], and determine whether the evidence is sufficient to
support a potential judgment in favor of the opposing party." (Binder
v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 840.) In light of these principles, we consider if
the facts viewed most favorably to the plaintiff would permit a reasonable
finder of fact to rule in her favor. (
In this
legal context, it is normally for the trier of fact to determine when the
client-plaintiff was actually harmed, and whether the harm was a consequence of
the attorney-defendant's negligence. (
"Of course, if the facts are undisputed, the trial court can
resolve the question as a matter of law in accordance with the general
principles governing summary judgment."
(Ibid.; Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112
["While resolution of the statute of limitations issue is normally a
question of fact, where the uncontradicted facts established through discovery
are susceptible of only one legitimate inference, summary judgment is
proper."]; Cleveland v. Internet
Specialties West, Inc. (2009) 171 Cal.App.4th 24, 32 (Cleveland).)
II
REQUIREMENT
A. Applicable Legal Principles
To prove
professional negligence against an attorney, the former client must satisfy
these elements: (1) the professional had
a duty to use such skill, prudence and diligence as other members of the
profession commonly exercise; (2) the defendant breached the duty, failing to
meet this standard of conduct; (3) there was causation between negligence and
claimed loss or injury; and (4) actual loss or damage resulted from
professional negligence. (
in Laird, supra, 2 Cal. 4th 606.)
A
plaintiff's discovery (actual or constructive) of the defendant's alleged
wrongful conduct is not an element of a cause of action for legal malpractice,
but an untimely discovery of injury can be pleaded as an affirmative defense to
a claim of malpractice. (
7-8.) Although section 340.6 specifies
that the limitations period begins to run upon the plaintiff's discovery of
such facts as will show the defending attorney acted wrongfully (or ability to
discover), the section further provides for tolling of that time period until
actual injury is sustained.
(§ 340.6, subd. (a)(1).)
In the
briefing as originally presented to us, the parties discussed the limitations
issues mainly in terms of a generic delayed discovery rule, regarding when
Sommer's cause of action accrued and the statute of limitations began to
run. In Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 803, a
personal injury and medical malpractice case, the court identified that time of
accrual as the point "when the plaintiff has reason to suspect an injury
and some wrongful cause."
Legal
malpractice actions, however, incorporate more specialized limitations
provisions, as definitively decided in Jordache,
supra, 18 Cal.4th at page 764. We
requested and received supplemental briefing on the effect of the one-year
limitations period imposed under section 340.6, subdivision (a)(1). The question of whether the former client has
suffered actual injury at any particular point, attributable to the breach of a
professional duty by the attorney, may be decided "entirely aside from the
discovery rule." (
32.) The reason is that the facts
justifying a finding of constructive notice of wrongdoing by the defendant must
also include the plaintiff's ability to plead, upon such facts, that damage has
been incurred from the alleged malpractice.
An injury requires a wrongful cause for the loss, and the client is not
wronged until there is an injury in fact, that is not contingent or speculative
in nature. (Id. at p. 32; Jordache,
We next
address whether triable issues of fact exist regarding (1) when Sommer knew or
should have known of the facts that constituted Brave's wrongful act or
omission against her interests; (2) whether determination of actual injury
("the fact of damage") is predominantly a factual inquiry under these
circumstances; and (3) when Sommer suffered "any loss or injury legally
cognizable as damages in a legal malpractice action based on the acts or
omissions." (Jordache, supra, 18
Cal.4th 739, 743, 751, 762.)
name="_ftnref9" title="">[9]
Whether
attorneys have breached professional duties turns upon whether the legal work
was "so legally deficient when it was given that they 'may be found to
have failed to use "such skill," prudence, and diligence as lawyers
of ordinary skill and capacity commonly possess and exercise in the performance
of the tasks which they undertake.' "
(Camarillo v. Vaage (2003) 105
Cal.App.4th 552, 561.) Applying these
rules to this record requires some understanding of quitclaim deed principles
and an awareness of the sequence of events and relationships in the
transactions.
B. Relevance of Real Property Transactions
It is not
disputed that Gloria had the power to sever her joint tenancy interest in the
property with Moser and convey it to herself or another. Civil Code section 683.2, subdivision (a)
allows a joint tenant, without the joinder or consent of other joint tenants,
to sever her interest in a joint tenancy in real property in several ways, by
preparing documents showing there was an intent to sever the joint tenancy
(such as a deed that names the joint tenant as transferee). (See 12 Witkin, Summary of Cal. Law (10th ed.
2005) Real Property, § 61, p. 110, citing Civil Code, § 683.2, subd.
(a)(1), (2).) "These means of
severance are in addition to any other methods by which a joint tenancy may be
severed." (12 Witkin, Summary of
Cal. Law, supra, at p. 110.)
Sommer
contends the trial court erred in relying on the provisions of Civil Code
section 1207, to find she must have been on constructive notice of all the
terms and effect of the recorded quitclaim deed after one year, notwithstanding
any defects in the execution of the instrument.
understood that her claims were founded upon the quitclaim deed, she had actual
and constructive notice of its terms and its recording, and therefore she must
have had early notice of her injury and its cause, a defective deed, within the
meaning of this section.
Civil Code
section 1207 is commonly interpreted as providing that even a defective
acknowledgment of a deed "cures itself by recordation, after 1
year." (12 Witkin, Summary of Cal.
Law, supra, § 284, p. 341.) But here, the claim is not that the
acknowledgment or format of the deed was defective, but that its substantive
content and provisions were substandard, allegedly due to Brave's legal
malpractice. We next seek to identify
the various junctures in the transactions at which Brave's actions arguably
created in Sommer an actual injury, that was redressable in "a present
cause of action for any compensable damage." (Mallen & Smith, supra, § 23:11, p. 412.)
C. Actual Injury Criteria
Both in
to 591, and in Jordache, supra, 18
Cal.4th 739 at page 743, the Supreme Court emphasized that the running of the
applicable statutory time period under section 340.6 will begin when the fact
of a plaintiff's damage from legal malpractice can be established. (See Budd,
supra, 6 Cal.3d at p. 201; Laird,
supra, 2 Cal.4th at p. 625.)
"[T]here are no short cut 'bright line' rules for determining
actual injury under section 340.6.
[Citations.] Instead, actual
injury issues require examination of the particular facts of each case in light
of the alleged wrongful act or omission."
(Jordache, supra, at p. 761,
fn. 9.)
In Mallen
& Smith, the authors state that "judicial confusion and inconsistency"
have resulted from "concern about the amount of damage or its apparent
actuality. Discovery of injury, however, is different from knowledge of injury.
Whether a lawyer has erred or the client has suffered injuries are factors that
typically are litigated in a legal malpractice action.
. . . [I]f other jurisdictional considerations do not
alter the analysis, the simplest, logical and pragmatic approach is to ask
whether the attorney's alleged error created a present cause of action for any
compensable damage. If the client has a remedy upon which to sue, the statute
of limitations should commence."
(Mallen & Smith, supra, §
23:11, pp. 411-412, fns. omitted.)
In the
above analysis, it is not determinative that the fact of damage can be
established, while its extent remains uncertain. "The loss of a right, remedy or property
interest, or the imposition of a liability is the injury, though the measure of
the damages depends on a contingent event. Thus, a defect in title causes the
loss of a property interest at the time of the error, but the fact and extent
of the damage may be discovered only when the title is challenged. A client who is aware of the defect has a
viable legal malpractice action, though there is no adverse
claimant." (Mallen & Smith,
omitted.)
The courts
utilize various terms to identify when such "actual injury" is
sustained, thus putting a stop to any suspension or tolling period that might
otherwise have applied. (§ 340.6,
subd. (a)(1).) These include such
situations as:
1. A client suffers some "appreciable and
actual" damage as a result of the attorney's allegedly negligent act(s),
such as the " 'impairment or diminution, as well as the total loss or
extinction, of a right or remedy.' "
(Village Nurseries v. Greenbaum
(2002) 101 Cal.App.4th 26, 41; Jordache,
supra, 18 Cal.4th at p. 750.) The character of the injury must be
"manifest and palpable." (
be "speculative or inchoate," despite difficulty of proof or
unknown amount. (Id. at p. 590.)
2. A client is injured by altering his or her
legal position, such as by entering into a contract that creates an obligation,
and doing so in reliance on the attorney's negligent advice. (Hensley
v. Caietti (1993) 13 Cal.App.4th 1165, 1168, 1175; Truong v. Glasser (2009) 181 Cal.App.4th 102, 108 (
litigation that was based upon lease provisions that the defendant attorney
negligently advised it to sign]; Apple
Valley Unified School Dist. v. Vavrinek,
Trine, Day & Co. (2002) 98
Cal.App.4th 934, 951 ["a party's alteration of its legal position in
reliance on its counsel can constitute actual injury even though the party may
be able to avoid or reduce the injury through subsequent legal action"].)
3. A client incurs actual loss due to the
actions or inactions of the attorney, and this loss is not contingent, nor
speculative, nor does it represent only a potential of future harm. (Adams,
supra, 11 Cal.4th 583, 590;
heir, could not sue the client's attorney for professional negligence in
preparing a will, until the beneficiary would have had a right to inherit upon
the death of the client, but could not do so due to the professional
negligence].)
4. Even where the attorney's actions resulted in
some kind of potential, contingent or speculative harm, such harm can become
actualized injury at some point, without any required "form of final
adjudication, as by judgment or settlement. ' "[A]n injury does not
disappear or become suspended because a more final adjudication of the result
is sought."
[Citation.]' " (
be taken into account in determining whether the client's actual injury, from
attorney malpractice, has arisen "at some point short of an adverse
judgment or settlement . . . depending upon the
facts." (Adams, supra, at p. 592.)
5. Actual injury may consist of the cost of a
lost opportunity (e.g., a missed development or property right due to passage
of time; Foxborough v. Van Atta
(1994) 26 Cal.App.4th 217 (Foxborough)
[lost right to annex a parcel of property due to undisclosed regulatory time
bar].) Actual injury may also consist of
expenses to the client who is compelled to incur and pay attorney's fees and
legal costs and expenditures, in seeking to correct the result of the
malpractice. (Truong, supra, 181 Cal.App.4th 102, 114; Sindell v. Gibson, Dunn & Crutcher (1997) 54 Cal.App.4th 1457,
1470 [where the transaction that was the purpose of a lawyer's retention was
intended to "place the client and his or her intended beneficiaries in a
posture of quiet ownership of assets, [but] the lawyer [acts] negligently [],
the mere fact of such [costly resulting] litigation is the unwanted
consequence," constituting damage to the client; italics omitted];
(2011) 194 Cal.App.4th 557, 575 (Callahan).)
III
Generally,
"[i]t would be for the trier of fact to determine when the requisite harm
actually did occur as a consequence of the attorney's negligence. [Citations.]
Of course, if the facts are undisputed, the trial court can resolve the
question as a matter of law in
accordance with the general principles governing summary judgment." (Adams,
supra, 11 Cal.4th 583, 591-592.)
Here,
several considerations must be included in deciding whether triable issues of
fact remain as to whether and when actual injury was sustained: (a) the nature of the quitclaim deed
transaction, (b) when loss attributable to it became actual and not contingent,
viewed in light of the nature and stages of the dispute between Sommer and
Moser. It is interesting to note that
Brave continues to contend that the quitclaim deed was not defective, or no
judicial finding has determined that it was (because of the probate
settlement). It is not now before us
whether Brave's representation of Gloria and the intended beneficiary, Sommer,
in the quitclaim deed portion of the transaction met the applicable standard of
care. We are only examining the
limitations question on a given set of facts.
A. Nature of Quitclaim Deed Transaction
The trial
court reasoned that Sommer knew her ownership interest in the property was
predicated on the quitclaim deed, of which she had a copy. She reviewed records at the county recorder's
office, knew of Moser's lack of cooperation with her, and talked to Gloria's
attorneys, Brave and Ladner, about her interests. Sommer heard from Moser's attorney Stein that
"she may not own half the property" as of January 2007. In March 2008, Moser's friend told her that
the change of title was not valid. All
these facts show that Sommer knew the deed transaction was not going smoothly,
but different inferences from the facts can be drawn about why that was
so. (Binder,
supra, 75 Cal.App.4th 832,
840-841.) Even though Sommer knew Brave
had prepared a quitclaim deed for a certain purpose, and she could see what the
face of the deed said, different inferences are possible about whether she, as
a layperson, necessarily understood its contents, or whether its contents were
defective due to legal malpractice by Brave, if indeed that turns out to be the
case. (See Mallen & Smith,
[awareness of defect can stop tolling].)
The authors
of 5 Miller & Starr, California Real Estate (3d ed. 2000) section
11:60, page 11-196, explain the effect of Civil Code section 1207: "If the instrument is recorded despite a
missing or defective acknowledgment, however, it will impart constructive
notice after a period of one year even if not corrected." (Fn. omitted.) For illustration, in Osterberg v. Osterberg (1945) 68 Cal.App.2d 254, 261-264, the face
of a deed naming a grantee/son was altered (after signing, but before
recording) to reserve a life estate in favor of the grantor/father. On appeal of judgment for the grantee/son, it
was held that the later claimant (surviving wife of the grantor/father)
effectively had notice of the contents of the recorded deed after one year's
time of the recording, notwithstanding any informality, alteration or defect in
it. Our case is distinguishable. The mere recording of the quitclaim deed was
not dispositive because it is not obvious on the face of this deed that any
interest of the claimant-daughter (a third party) was being changed or
interfered with, when the grantor/mother severed the joint tenancy by naming
herself and the stepfather/husband as tenants in common. Other legal
interpretation is necessary, and remains in dispute here, about the effect
on Sommer.
The type of
knowledge that Sommer had from the act of recording the deed is confined to the
deed's contents, and recording did not change or encompass its merits or
validity. By comparison, if a document
is void, recording does not convert it into a binding instrument, "simply
because it was recorded." (
Silver (1983) 140 Cal.App.3d 964, 971.)
"The purpose of recording is to protect innocent purchasers and
encumbrancers of property by giving notice of potential limitations on
title. [Citation.] Recording itself grants no interest in the
property [citation], and a void document 'derives no validity from the mere
fact that it is recorded.'
[Citation.]" (
Where property interest owners are misled by recorded documents about
any limitations upon their interests, then "equity might require
enforcement of the provisions despite their invalidity," but this is
rare. (Ibid.) The state of the
record title and the contents of the recorded instrument are considered
separately. (Ibid.)
We cannot
conclude that the recording of this quitclaim deed necessarily gave
constructive notice of any problems with its contents or provisions, that were
possibly attributable to Brave's defective preparation or substance of the
deed. Reliance on Civil Code section
1207 as giving constructive notice begs the relevant questions, such as (1)
what notice was given of what interest that was actually transferred, and was
the transfer in compliance with Gloria's wishes and instructions to Brave, (2)
when did the quitclaim deed's existence actually alter Sommer's legal position,
in the absence of any further transfer of title or possession of the property,
or other event that served to fix the time and amount of actual injury, and (3)
did Sommer act as a reasonable layperson in investigating the quitclaim deed
transactions and Moser's reasons for resistance to her position
Here, the
running of the limitations period could have been triggered if a sale of the
property took place, from which proceeds would be divided, and then, any
"actual injury" would no longer be contingent or speculative, and
could then be attributed to Brave's alleged negligence. The nature of this quitclaim deed
transaction, followed up by the trust transaction, did not directly bring
matters to a head in the same way that a sale of the property or a partition
action would have done. In other words,
Brave's activities on behalf of Gloria, in merely severing a joint tenancy
interest, with the anticipated transfer to a trust and then to Sommer, in some
sense remained paper transactions that might or might not create any real world
implications, such as receipt of rents/profits or payment of property
taxes. Different inferences can be drawn
about the type of knowledge that was gained by Sommer, and when, upon her
investigation of the recorded title status and her informal communications with
Gloria's attorneys, as well as Moser's representatives, about her interests.
B. Nature of Dispute and Proceedings
After
Gloria died in January 2007, Moser's attorney Stein told Sommer that she may
not own a half interest in the property.
In response, Sommer continued to communicate with Gloria's attorneys
into 2008, and inferences can be drawn about whether it was reasonable for her
to think that things could still be straightened out in her favor, or to
believe there might be other reasons for Moser's lack of cooperation with her
(such as locking her out of the property).
Ladner told Sommer that if the deed prepared by Brave was accurately
prepared from the most current prior deed, it should be fine, but Ladner said
she had not seen the previous deed, and it is unclear whether Sommer could
reasonably still have been left in doubt about whether Gloria's wishes had been
followed properly. These are triable
issues of fact on the tolling issue.
In March
2008, Sommer was again told by a friend of Moser that Gloria's transaction
might not have been valid. Apparently in
September 2008, she discovered Moser had written a new trust and will, and
those events could have further altered the legal position that she was placed
in by Brave's professional activities. (
Shortly
thereafter, in October 2008, Sommer engaged a probate attorney to pursue her
property interest. In March 2009, the
probate attorney obtained a declaration from Brave in support of Sommer's
position, then filed the action and ultimately settled it.
In some
cases, entry into a contract can mark the time of actual injury, such as in
was held to be created when she signed an unfavorable marital settlement
agreement, based on the advice of her counsel (not later when judgment issued
on the agreement). (Id. at pp. 1168, 1175 ["Entering a contract is a jural act
which alters the legal relations of the parties and creates an
obligation"], see Mallen & Smith,
supra, § 23:12, p. 444.) Here, it
was Gloria who was the client who requested and carried out the quitclaim deed
transaction, not Sommer, and it is not yet clear when and whether Sommer
sustained actual injury from the execution of the quitclaim deed, since further
trust transactions had to be carried out, along with other contingencies,
before Sommer could benefit from an interest in the property.
Because
actual injury can be incurred prior to a judgment date regarding a particular
dispute, the settlement of the probate action (well after Jan. 2009) does not
appear particularly relevant here. (
That settlement merely followed up on legally cognizable damage, but it
is still unclear when the loss became identifiable. (Truong,
supra, 181 Cal.App.4th 102, 113-115.)
There was no transfer of possession of property or other event that had
taken place to clearly fix the time and amount of actual injury, or to enable
identification of wrongdoing, to start the statutory limitations period
running. (§ 340.6, subd. (a)(1);
227.)
From this
sequence of events, different inferences can be drawn about the types of
knowledge that Sommer had, over time, about the source of problems with her
interest in the property, and also about when she was financially injured, in
such a way as to constitute any potential legal malpractice damages. Based on Gloria's instructions to Brave,
Sommer had an expectancy of inheriting a portion of the property, but Sommer
apparently knew that Moser intended to continue to live in it for the immediate
future, and until September 2008 she thought she was still one of his
heirs. There is no evidence about
whether a transfer was contemplated earlier, possibly giving her some
contingent right to receive a share of the proceeds, or altering her legal
position, or affecting the permanency of actual injury. (Foxborough,
supra, 26 Cal.App.4th at p. 227; Callahan,
supra, 194 Cal.App.4th 557, 575.)
Under the
various definitions of actual injury described above, we cannot conclude that
summary judgment was proper against Sommer on the grounds that her complaint
was time-barred. Arguably, there are
several points at which the running of the limitations period could have been
triggered here, by the suffering of "actual injury" that was not
contingent or speculative, as a result of Brave's alleged negligence in
preparing the deed. However, Sommer's
complaint alleges her discovery of her injury occurred in October of 2008, and
currently, there is no reason to accept her belated contention in the briefs
that her actual injury was not incurred until January 2009, when Moser's
attorney communicated with Sommer's probate counsel, to contest her claim in a
letter. By that time, Sommer had already
recognized the situation was problematic and had taken steps to protect her
interest in probate court, and the record does not show that any appropriate
leave to amend these pleadings has been sought to support a later discovery
date. (See fn. 4,
In any
case, each of the other disputed dates should be evaluated in terms of how they
showed Sommer's actual or constructive knowledge of the facts that constituted
a loss that was directly attributable to wrongful acts or omissions by Brave,
not by someone else. That recognition
required some legal knowledge about recorded deeds, and even now, the parties
are arguing about whether Brave's legal representation was substandard in
preparing the quitclaim deed.
Under a
proper interpretation of statutory tolling principles for determining the time
Sommer sustained "actual injury," triable issues of material fact
remain about when she suffered or became aware of "any loss or injury
legally cognizable as damages in a legal malpractice action based on the
asserted errors or omissions." (
examination of the particular facts of each case in light of the alleged
wrongful act or omission." (
judgment on limitations grounds.
(§ 340.6, subd. (a)(1).) We
need not address the remaining arguments on appeal.
DISPOSITION
Summary
judgment is reversed with directions to the trial court to enter a new order
denying the motion. Appellant shall
recover her costs on appeal.
HUFFMAN, Acting P. J.
WE CONCUR:
NARES, J.
McINTYRE, J.
name="_ftn1" title="">[1] Ladner
was originally named as a defendant in this malpractice action, but she has
settled and been dismissed from it.
name="_ftn2" title="">[2] No
such incapacity theory was pursued in the trial court or this court.
