O’Keefe & O’Keefe v. OZ Optics
Limited
Filed 6/20/13 O’Keefe & O’Keefe v. OZ Optics Limited
CA1/2
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
TWO
O’KEEFE
& O’KEEFE LLP,
Plaintiff and Respondent,
v.
OZ OPTICS LIMITED, et al.,
Defendants and Appellants.
A131330
(Alameda
County
Super. Ct.
No. RG08412468)
INTRODUCTION
Defendants
and cross-complainants OZ Optics Ltd., Oz Optics, Inc. (collectively OZ), and
Omur Sezerman appeal from a judgment entered after a jury trial in favor of
plaintiff and cross-defendant O’Keefe & O’Keefe, LLP (O&O), defendants’
former attorneys.
title="">[1] O&O sued defendants for failing to pay
for legal services rendered by O&O in connection with two matters:
al. (Alameda County Super. Ct. No. 01-0334488) (the Hakimoglu action) and Reinhard
v. Bitmath, Inc., et al. (Santa Clara County Super. Ct.
No. 1-02-CV-810955) (the Reinhard action). The jury awarded O&O damages against OZ
in the sum of $190,142.54 with interest from the date of entry of judgment,
plus costs.
On
appeal, defendants contend: (1) the trial court improperly
dismissed all causes of action of defendants’ cross-complaint for failure to
comply with the one-year statute of
limitations for attorney malpractice (Code Civ. Proc., § 340.6)
name="_ftnref3" title="">[3]
and erroneously found O&O was not estopped to rely on the statute;
(2) the trial court abused its discretion in allowing defendants’ trial
counsel to withdraw before the outset of trial in circumstances where such
withdrawal prejudiced defendants; (3) the court prejudicially erred when
it struck the opinions of OZ’s expert witness Ronald Mallen, Esq. as
to issues related to OZ’s affirmative defenses that OZ was entitled to
deductions from O&O’s billing where O&O performed negligently and
breached its contract with defendants; and (4) the court erroneously
granted a partial directed verdict for O&O on OZ’s affirmative defense
asserting an offset for sums owing due to O&O’s professional negligence.
BACKGROUND
O&O’s Complaint.
On
September 30, 2008, O&O filed a complaint against defendants OZ and
Sezerman for the sum of $153,000, seeking unpaid legal fees in excess of
$132,289, plus accrued interest, in connection with legal services O&O had
provided in the Hakimoglu action from
January through July 2007, and for $1,775 for legal fees, plus accrued
interest, for services O&O rendered in the Reinhard action.
entered into a written agreement for O&O to represent defendants in the
ongoing Hakimoglu action. Defendants agreed to pay O&O’s fees and
costs in advance, as O&O required such due to a past history by defendants
of refusing to pay prior counsel. In the
Hakimoglu action, defendants
contended that after it purchased semiconductor company, Bitmath, Inc., OZ’s
then vice president of business development, Zeynep Hakimoglu and three
Bitmath officers, Ta-Ming Chi, Jerry Walker, and Addisu Tesfaye,
breached their employment agreements and misappropriated OZ’s trade secrets. Hakimoglu was represented by Greenberg
Traurig LLP and Chi, Walker and Tesfaye were represented by the Law Offices of
Douglas Unsworth. Upon undertaking
defendants’ representation, O&O amended the Hakimoglu action complaint
to allege fraud, defendants’ main claim at trial. Chi, Walker and Tesfaye filed a
cross-complaint against OZ Optics Ltd., alleging under multiple theories that
defendants fraudulently induced them to sell Bitmath and misappropriated
Bitmath’s trade secrets. Hakimoglu also
pursued claims against defendants.
Defendants
had made all fee payments due until trial began on the Hakimoglu action. At that
point, defendants stopped paying O&O’s invoices. O&O continued to represent defendants
through the conclusion of trial on March 15, 2007, resulting in a jury
verdict in favor of defendants.
Thereafter, defendants attempted to force O&O to handle post-trial
motions and the appeal without compensation.
O&O refused. Beginning in
late March 2007, O&O advised defendants that it would be forced to file a
motion to withdraw if defendants did not bring its account current. Defendants promised to pay and to substitute
O&O out of the case if O&O did the post-trial work. Defendants made a single $35,000 payment as
an inducement. However, after O&O
performed the post-trial work, defendants made no further payments. On August 8, 2007, defendants
substituted in GCA Law Partnership LLP as their attorney and O&O ceased
representing defendants.
2. The
Reinhard action. In the Reinhard
action, Bitmath’s landlord Eli Reinhard sued defendants and Bitmath
for abandoning the leased premises and failing to pay rent in violation of the
lease. A jury trial of that matter
resulted in a judgment against defendants for approximately $170,000. The jury also found against defendants on
their cross-complaint. Defendants were
represented by counsel other than O&O at trial and initially on
appeal. In July 2006, O&O
substituted in as defendants’ counsel on the Reinhard action, working with co-counsel Wilson Keon LLP. The Court of Appeal reversed the jury verdict
on the basis of improper instructions and remanded the action for a new
trial. On or about August 8, 2007,
defendants substituted the GCA Law Partnership LLP to take over the
to O&O of $1,775.
B. Defendants’ Answer and Cross-Complaints.
On February 18, 2009, defendants filed an answer
to O&O’s complaint for fees and a
cross-complaint against O&O and O&O partner Garet O’Keefe.
1.
Answer and affirmative defenses.
defendants raised affirmative defenses to O&O’s fee claim. Among other things, defendants alleged
O&O’s claims were barred, in whole or part, by set-off or offset due to
O&O’s legal malpractice (second affirmative defense) and O&O’s breaches
of contract or breaches of fiduciary duty, including excessive billing hours
(third affirmative defense).
O’Keefe alleged legal malpractice, breach of contract, breach of fiduciary duty
and fraud. It alleged that defendants
did not discover and could not reasonably have been expected to discover
O&O and O’Keefe’s malpractice until on or after September 30, 2007,
one year before the date O&O filed the complaint. The second and third causes of action for
breach of contract and breach of fiduciary duty were based on alleged “billing
for excessive hours for the nature and quality of the legal work performed,
billing for work not authorized or approved by [defendants], and billing for
work unnecessary to proper representation of [defendants] in the matter that
was the subject of the contract.†These
claims were substantively the same as the setoff allegations of defendants’
third affirmative defense. The fourth
cause of action for fraud alleged O’Keefe urged defendants to settle with Chi
and Walker in the Hakimoglu action
and represented to defendants that the contents of “apology letters†and
“statements of facts,†received from Chi and Walker action could be used as
evidence against Hakimoglu at trial, that Chi and Walker would give testimony
favorable to defendants at trial, and that the benefits of settling the case
against Chi and Walker would outweigh any detriment from the dismissal of
defendants’ claims against the two.
Relying on this advice, defendants settled with Chi and Walker,
dismissing claims against them. The
“apology letters†and other statements were not admitted at the
testified adversely to defendants, creating a more favorable impression of
Hakimoglu with the jury and adversely impacting the amount of damages awarded
to defendants.
O&O
and O’Keefe demurred to defendants’ cross-complaint and the trial court
sustained the demurrer on the basis that the one-year limitations statute under
section 340.6 applied. The court
found that defendants “sustained actual damage, at the latest, when judgment
was entered in the underlying action in May 2007, and the limitation period was
tolled until [O&O’s] representation of [defendants] ended on August 10,
2007.†O&O had filed its complaint
on September 30, 2008, more than one year after it ceased representing
defendants and the cross-complaint related back to the date of filing of
O&O’s complaint. The court granted
defendants leave to amend the first through third causes of action of the
cross-complaint to attempt to allege facts supporting their claim that
defendants did not discover and could not reasonably have discovered facts
constituting the wrongful act or omission until after September 30,
2007. The court sustained the demurrer
to the fourth cause of action for fraud with leave to amend on the basis that
the facts alleged stated only a claim for malpractice, not actual fraud within
the meaning of section 340.6, and hence the one-year limitations statute
applied and also on the ground that the facts underlying the fraud claim were
not pleaded with sufficient particularity.
cross-complaint contained the same causes of action as previously. The first through third causes of action
alleged O&O and O’Keefe were professionally negligent during trial of the
limited to allegations that O’Keefe had failed to file pretrial motions, had
failed to submit an unclean hands jury instruction, had provided erroneous
advice regarding post-trial motions, had failed to retrieve defendants’ trial
exhibits, had engaged in excessive billing and unauthorized or unnecessary
work, and that O’Keefe had shown his animus toward Sezerman by throwing a pen
at Sezerman during trial. However,
defendants now alleged in support of their estoppel claim that: “As early as March 28, 2007, [defendants]
accused O’Keefe of committing malpractice and threatened to sue it. These threats were repeated, in very clear
and dramatic language, on multiple occasions thereafter. These threats were made in writing (emails)
and orally.†Such allegation was directly
contrary to the allegation of the previous cross-complaint that defendants did
not and could not have discovered O&O’s malpractice before
September 30, 2007. Instead,
defendants asserted that O’Keefe’s continued representation of defendants after
they had accused him of malpractice, placed him in a conflict of interest with
defendants and that he knew defendants were erroneously assuming that any
applicable statute of limitations for malpractice against O&O and O’Keefe
would be tolled or suspended while any appeal was pending. Again, O&O and O’Keefe demurred.
The
trial court sustained the demurrer to these causes of action
defendants’ argument that O&O was estopped to rely on the attorney
malpractice statute of limitations because it “misled†defendants about whether
the appeal, pending at the time O&O withdrew on August 10, 2007, acted
to toll the limitation period for defendants’ malpractice claim against
O&O. Nor did the court agree that
O&O had a fiduciary duty to advise defendants that the limitation period
for a malpractice claim against it was one year or to advise that the period
was not tolled while the appeal was pending.
The court also rejected defendants’ claim that O’Keefe had acted
improperly by continuing to represent defendants after they had accused him of
malpractice. The alleged conflict was
created by defendants, who accused O’Keefe of malpractice, but failed to
terminate O&O’s services. The court
concluded as a matter of law that an attorney has no fiduciary duty to advise a
client of the rules concerning tolling of the limitation period for malpractice
where the client is threatening to sue that attorney for malpractice.
O&O
and O’Keefe’s demurrer to the fourth cause of action for “fraudulent billingâ€
was sustained with leave to amend in
order to require defendants to allege the fraudulent billing with more
particularity. Thereafter, defendants
dismissed this claim and omitted it from their second amended cross-complaint.
The
fifth cause of action for fraud was based on the same allegedly negligent
advice O’Keefe gave regarding the “apology letters†and statements by Chi and
Walker alleged in the previous
cross-complaint. The court sustained the
demurrer to the fifth cause of action for fraud with leave to amend to allow a final opportunity to allege “if
possible and within the required particularity†how the claim based on the
“apology letters†and statements of Chi and Walker could constitute actual
fraud.
The
sixth cause of action for fraud alleged O&O and O’Keefe were estopped to
rely on the statute of limitations because O’Keefe had an affirmative duty to
inform defendants that the statute of limitations on a malpractice action
against O&O was one year and would not be tolled pending appeal. The trial court sustained the demurrer
independent from legal malpractice and was time-barred for the same reasons as
the first through third causes of action.
4.
Second amended
cross-complaint. Defendants filed a second
amended cross-complaint alleging one cause of action for fraud, deceit and
intentional misrepresentation based on the Chi and Walker “apology letters†and
their statements. The complaint alleged
the same facts as before, but also alleged that O’Keefe made the false representations
because he was desperate to get out of the case. On October 2, 2009, the trial court
sustained the demurrer to the second amended cross-complaint
reasoned that the cause of action was not factually distinguishable from the
fifth cause of action of the first amended complaint and was therefore
time-barred by the one-year limitation period for actions against an attorney
for a wrongful act or omission. (§ 340.6.)
The allegation that the testimony of Walker and Chi would be beneficial
to defendants’ case was based on a prediction of future events, which neither
O&O nor defendants could completely control, and on an additional
prediction about the effect of such testimony on the jury. Such was clear from
the allegation of the cross-complaint that defendants predicted Walker and Chi
would be more likely to support Hakimoglu if they were no longer
defendants. Nor did the allegation that
O’Keefe misrepresented that the “apology letters†could be used as evidence at
trial support a fraud claim, because it was based on the provision of incorrect
legal advice that allegedly resulted in the loss of defendants’ claims against
Walker and Chi and damage to its claim against Hakimoglu. The additional allegation that O’Keefe was motivated
to settle with Walker and Chi because O’Keefe wanted to settle the entire case
and did not want to take the case to trial, did not take the claim outside the
realm of malpractice. The nature of the
conduct alleged was still a “judgment call†made by an attorney while providing
legal services, and the only alleged harm resulting from that conduct was
damage to the claims and defenses in the underlying action.
as Defendants’ Counsel and Ouda’s Entry
On May 5, 2010, defendants’ attorney
James M. Braden moved to be relieved as counsel, two months before the
scheduled trial date. Sezerman initially
opposed Braden’s motion to withdraw, asserting that it would prejudice
defendants and that Braden had charged them a fixed fee and had been paid in
full. After an extended hearing on
June 3, 2010, Sezerman agreed not to oppose the motion to withdraw, the
court deemed the motion unopposed, and granted it. The court set a date for the next case
management conference for July 21, 2010, with a substitution of attorney
for the OZ entities to be filed before that date. Sezerman advised the court he would be
representing himself as an individual.
The court continued the trial date to October 4, 2010. The June 19, 2010 discovery cutoff date
remained in place.
OZ
did not substitute new counsel by the July 21, 2010 hearing. Sezerman appeared telephonically and advised
the court that the OZ entities intended to bring in Peter Ouda, a New
Jersey attorney, and that an application to appear pro hac vice would be filed no later than the following Monday,
July 26, 2010. Ouda was allowed to
specially appear at the hearing by phone.
The pro hac vice application
was filed August 16, 2010, and granted by the court on August 19,
2010. At the August 19, 2010
hearing, OZ sought a further 90-day continuance of the trial. The court observed there had been delay and
that it was surprised it took OZ so long to substitute counsel. Although initially finding no good cause to
continue the trial further, because Ouda claimed to have 75 boxes of discovery
to go through, the trial court granted a continuance of trial to
November 15, 2010, to allow Ouda to “get up to speed,†but it refused to
re-open discovery. On October 21,
2010, Ouda sought an additional trial continuance and the court continued the
trial one week to November 22, 2010.
challenges.
On
November 17, 2010, OZ filed a peremptory challenge to the judge. (§ 170.6.) That same day the court denied the challenge
as untimely. On November 19, 2010,
the trial court issued an additional order, “in an abundance of caution,â€
striking the judicial challenges. The
order stated that although the challenges did not cite section 170.3 as
authority and did not appear on their face to be challenges for cause, the
challenges were substantively defective and procedurally untimely under that
section and must be stricken.
On
the first day of jury trial, November 22, 2010, OZ again filed a challenge
for cause against the judge. O&O
objected and the court stated on the record that as defendants provided no
explanation in their papers for the delay in bringing the motion, a question
was raised “whether they deliberately timed the filing of the Challenge to
attempt to delay the commencement of trial.â€
The judge filed a verified answer to the challenge for cause on
December 2, 2010, denying any bias and responding to the specific
allegations with transcript and other references. On December 17, 2010, the Honorable
Susan M. Dauphine, of the Monterey County Superior Court, was assigned to rule
on the disqualification motion. On
February 22, 2011, Judge Dauphine denied OZ’s motion to disqualify the
trial judge, finding the motion was untimely and substantively without merit.
E. Trial
On the first day of trial, O&O dismissed its
action against Sezerman without prejudice.
Jury selection began on November 22, 2010, and was followed by ten
days of trial. During the trial OZ made
several motions for mistrial on various bases that were denied by the court.
OZ
called Ronald Mallen as an expert witness in the context of defendants’
affirmative defenses raising offsets to O&O’s fee claim. Mallen opined that O’Keefe was negligent in
his representation of defendants in the Hakimoglu
action in five areas: (1) O’Keefe’s
attempt to admit the written “apology letters†and statements of fact of
settling defendants Chi and Walker indicated O’Keefe did not understand the
hearsay rule; (2) O’Keefe’s failure to request an instruction on unclean
hands, which defense, if successful, would have eliminated Hakimoglu’s
counterclaim against OZ in the underlying trial, and the resulting conclusion
by trial and appellate courts that any error in failing to so instruct was
deemed waived; (3) O’Keefe’s erroneous advice to the client about the
likely success of a motion for partial judgment notwithstanding verdict (JNOV);
(4) O’Keefe’s leaving the courtroom in the underlying trial on two
occasions to use the bathroom, which left the client unrepresented at trial;
and (5) O’Keefe’s errors in closing argument related to the presentation
of deposition testimony. Mallen limited
his opinions to the alleged violations of the standard of care and expressly
declined to offer any opinions on the value or lack thereof of O&O’s
services with respect to any of these asserted instances of negligence. He did not opine whether anything O&O did
had any impact on the outcome of the Hakimoglu
trial, as he had not been asked to do so and, therefore, he did not render
an opinion on causation. Nor did he
attempt to quantify the amount of any attorney’s fees that should not be
recovered.
On
December 8, 2010, O&O moved for a partial directed verdict on
defendants’ affirmative defenses and setoff.
O&O argued that “with regard to the affirmative defense for a set
off stemming from alleged legal malpractice, OZ has failed to present any
evidence to support the elements of causation or damages for a legal
malpractice claim.†O&O also argued
for a directed verdict on the affirmative defenses of breach of contract and
breaches of fiduciary duty, including O&O’s alleged failure to follow
Sezerman’s instructions and alleged excessive billing claims.
The
trial court found OZ failed to meet its burden of proof with regard to the
defense of legal malpractice as a setoff to O&O’s breach of contract fee
claim and granted a partial directed verdict for O&O as to OZ’s second
affirmative defense for an offset due to O&O’s legal malpractice. The court denied the motion for a directed
verdict on the breach of contract and breach of fiduciary duty affirmative
defenses, allowing the jury to consider them.
It advised counsel that “[a]ny legal opinion [Mallen]
gave . . . on the issue of legal malpractice is out.†At the same time, the court rejected Ouda’s
blanket characterization of its order as preventing counsel from even
mentioning Mallen as a witness at all, stating:
“I think I have made it clear, based on my ruling on plaintiff’s motion
that there’s no legal malpractice setoff claim before the jury.†The court acknowledged it would allow
reference to certain Mallen testimony, such as confirming defendants’ claim
that O&O’s bringing of the JNOV motion below was inappropriate and had no
chance of success. The jury was instructed
that the claim by OZ that it was entitled to a setoff against any award to
O&O in the amount of damages based on legal malpractice by O&O was no
longer an issue in the case and should not be considered during
deliberations. O&O was allowed to
say to the jury that because the legal malpractice issue was no longer in the
case, Mallen’s opinions regarding the standard of care were no longer
relevant. Consequently, the case went to
the jury on O&O’s claim that defendants breached the contract for the
provision of legal services by failing to pay O&O and failing to reimburse
it for costs it advanced and on defendants’ denial of that claim and their
affirmative defenses that they were entitled to a setoff of any award to
O&O in the amount of damages attributable to O&O’s own breach of
contract and breach of fiduciary duty to defendants.
On
December 9, 2010, the jury returned a verdict for O&O, awarding it
$190,142.54, the full amount of O&O’s claimed damages. The jury specifically found O&O did not
breach its fiduciary duty to OZ.
Therefore, OZ was entitled to no setoff.
Judgment was entered on December 28, 2010. Notice of entry of judgment followed on
January 3, 2011. This timely appeal
followed. We denied O&O’s motion to
dismiss the appeal on July 22, 2011.
We denied the application of attorney Peter Ouda to appear as
counsel pro hac vice on behalf of OZ
on August 5, 2011. Defendants’
appellants’ opening brief was filed by attorney Michael Keck, who
apparently had provided some limited assistance to Ouda at trial. On April 11, 2012, O&O filed a
motion for sanctions against defendants and Keck.
DISCUSSION
I. Sezerman’s Standing to Appeal
As a threshold matter, we address O&O’s assertion
that Sezerman lacks “standing†to appeal as the Notice of Appeal was signed and
filed by Ouda who represented only the OZ entities at trial. Sezerman clearly had “standing†to appeal as
a party aggrieved by the court’s sustaining of the demurrers that resulted in
dismissing defendants’ cross-complaint.
It is
true that after Braden’s withdrawal, Ouda represented the OZ entities
propria persona, until he was dismissed as a defendant on November 22,
2010. However, we will “assume counsel
had the necessary authority†to file an appeal for the client unless there is “a
clear and satisfactory showing†that counsel lacked such authority. (In re
Malcolm D. (1996) 42 Cal.App.4th 904, 910; see Eisenberg, Civil
Appeals and Writs, supra, ¶ 3:125.2,
p. 3-55.) Moreover, the attorney
who signs the notice of appeal “need not be appellant’s attorney of record
[citation] so that an attorney newly retained to handle the appeal after trial
may sign even before an association of counsel is filed. Indeed, any person authorized by the
appellant—whether or not an attorney—may sign the notice on appellant’s
behalf. [Citations.]†(Eisenberg, Civil Appeals and Writs, at
¶ 3:125, p. 3-54.)
II. Sustaining of the Demurrers to the
Cross-Complaint
Defendants
maintain the trial court erroneously sustained demurrers to their
cross-complaints based on the one-year statute of limitations for attorney
malpractice. (§ 340.6.)
“On
appeal from a judgment of dismissal following the sustaining of a demurrer
without leave to amend, we assume the truth of all properly pleaded facts. (Evans
v. City of Berkeley (2006) 38 Cal.4th 1, 6; [citation].) We also accept as true all facts that may be
implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th
1397, 1403; [citation].)†(
fn. 3.) If the trial court sustains
a demurrer without leave to amend, appellate courts determine whether or not
the plaintiff could amend the complaint to state a cause of action. (Id.
at p. 637.) Plaintiff bears the
burden of proving the trial court abused its discretion in denying leave to
amend. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318;
206 Cal.App.4th 1274, 1282.)
and section 340.6.
Defendants contend they reasonably could not have
discovered O&O’s malpractice until on or after September 30, 2007, and
that O&O was estopped from alleging an accrual date before then because it
had misled or concealed the applicable statute of limitations from them. The trial court properly rejected this claim.
O&O
ceased representing defendant on or before August 10, 2007. More than one year later, on September 20,
2008, O&O filed its action for fees for services rendered. Defendants’ cross-complaint related back the September 30,
2008, filing of O&O’s fee action. As
the trial court found when it sustained the demurrer to the first three causes
of action of the first amended cross-complaint without leave to amend, the cross-complaint
showed on its face that these claims were time-barred. Defendants conceded they were aware of facts
supporting their malpractice claim before August 10, 2007, when O&O’s
representation of defendants ended.
Indeed, that cross-complaint contains allegations that “[a]s early as
March 28, 2007, [defendants] accused O’Keefe of committing malpractice and
threatened to sue it.â€
In
606, the California Supreme Court held that the limitations period of
section 340.6 commences when a client suffers an adverse judgment or order
of dismissal in the underlying action on which the malpractice action is
based. It held that the plaintiff
sustained actual injury when the trial court dismissed her underlying action
and she was compelled to incur legal costs and expenditures in pursuing an
appeal. It further held that the
limitations period was not tolled
pending an appeal of the adverse judgment or dismissal. (Id. at
pp. 609, 615.)
Defendants
contend here, as they did below, that O&O was estopped to rely on the
statute of limitations where defendants alleged that O&O misled them about
the statute of limitations for malpractice, failing to advise them that the
statute of limitations for attorney malpractice was one year and that the
one-year limitation period would not be tolled while the appeal was
pending. As the trial court cogently
explained in rejecting this argument:
“An attorney does not have a fiduciary duty to a client to advise the client
regarding how best to sue the attorney for malpractice once the representation
ends, even if the client has expressed an inclination to do so. The scope of the representation by O’Keefe
encompassed the claims in the underlying action. O’Keefe was not hired to provide legal advice
about potential malpractice claims against itself. In addition, the fact that a client does not
have specific information about legal theories and rules relating to a claim of
malpractice is irrelevant to the running of the limitation period. Thus, failure to disclose this type of
information cannot serve as a basis for tolling the limitation period. [(]Graham
v. Hansen (1982) 128 Cal.App.3d 965, 972[.)]†Graham
v. Hansen, cited by the trial court, reiterates the “well-settled principle
that ignorance of a legal theory of recovery against defendants is
irrelevant. ‘The statute of limitations
is not tolled by belated discovery of legal
theories, as distinguished from belated discovery of facts. In legal and medical
malpractice cases, the courts are often confronted with such claims that the
statute of limitations has been tolled.
However, the Supreme Court repeatedly has explained that it is the
knowledge of facts rather than discovery of legal theory, that is the
test. The test is whether the plaintiff
has information of circumstances sufficient to put a reasonable person on
inquiry, or has the opportunity to obtain knowledge from sources open to his or
her investigation.’ [Citations.]†(Ibid.)
No
case cited by defendants or found by us holds that an attorney has a fiduciary
duty to advise a client regarding how best to sue the attorney for malpractice,
or of the applicable statutes of limitation.
We conclude there is no such duty.
(See Expansion Pointe Properties
Limited Partnership v. Procopio, Cory, Hargreaves & Savitch, LLP (2007)
152 Cal.App.4th 42, 55 [“no authority suggesting an attorney has a duty to
discuss—either at the inception of the attorney-client relationship or later in
the representation—the various types of recovery a client may obtain in a
potential malpractice action against him or herâ€]; Mallen and Smith,
3 Legal Malpractice (2012) § 24:5, pp. 622–623 [“there is no
civil cause of action for a lawyer’s failure to confess legal malpractice,
which consists simply of nondisclosure of prior negligent conduct, unless there
was an independent tort or risk of additional injuryâ€].)
Absent
such duty, the failure of O&O to advise defendants of the one-year statute
of limitations for malpractice or that it was not tolled by the appeal does not
estop O&O from relying on the statute of limitations with respect to the
cross-complaint. Nor did such
allegations state a cause of action for breach
of fiduciary duty or for actual fraud.
The
cases cited by defendants do not persuade us otherwise:
Defendants
rely upon Jordache Enterprises, Inc. v.
Brobeck, Phleger & Harrison (1988) 18 Cal.4th 739, 763 (
malpractice claim does not necessarily accrue on entry of adverse judgment,
dismissal or settlement of the underlying action and that the application of
the delayed discovery rule makes the determination of accrual of a malpractice
action an issue of fact. We agree with
this statement, as a general proposition.
However, in recognizing that “[t]he resolution of litigation related to
alleged malpractice may or may not mark the point at which a plaintiff first
sustains actual injury under section 340.6†(ibid.), the Supreme Court
found the statute had run before the
client settled with the insurer for less than the full benefits claimed where,
as here, the client acknowledged it discovered its attorneys’ alleged
malpractice more than one year before it commenced the action. (Id. at
p. 743.) Further, although
circumstances of each case, analyzed in light of the alleged negligence and its
consequences as revealed by the evidence, can establish when the plaintiff
sustained actual injury under section 340.6,†(id. at p. 764), it also acknowledges in the context of a
summary judgment motion that “[w]hen the material facts are undisputed, the
trial court can resolve the question as a
matter of law. . . .â€
(Ibid., italics added.)
Similarly, defendants’ citation of Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 946, 967, for
the undisputed proposition that an attorney’s error may not cause damages and a
client may not discover the error for years after the fact misses the
point. As the Supreme Court recognized
in Samuels v. Mix (1999)
22 Cal.4th 1,7: “On its face,
section 340.6(a) states ‘two distinct and alternative limitation
periods: one year after actual or constructive discovery, or four years
after occurrence (the date of the
wrongful act or omission), whichever occurs first.’ (Radovich
v. Locke-Paddon[, supra,]
35 Cal.App.4th 946, 966, italics in original; [citation].)â€
Here defendants alleged
they had discovered malpractice and accused O&O of the same as early as
March 2007. Therefore, even under the
most generous reading of the statute of limitations, as a matter of law,
defendants accrued damages at the time the judgment was rendered. The statute was tolled pursuant to
section 340.6, subdivision (a)(2) until O&O ceased
representing defendants on the matter—still more than a year before they filed
the complaint to which defendants’ cross-complaint related back.
Defendants maintain that the court erroneously
sustained the demurrer as to their fraud claims. The one-year limitations period contained in
section 340.6 does not apply to claims of “actual fraud.†In sustaining the demurrer to the fraud
claims, the trial court concluded that the allegations of the first and second
amended cross-complaints demonstrated that the intentional fraud and
misrepresentation claims were no more than a re-labeled version of defendants’
legal malpractice claims and should be subject to the same
even if the facts alleged support a claim for malpractice, those same facts may
support a claim for fraud where defendants alleged the specific
misrepresentations made by O&O regarding the Chi and Walker “apology
letters†and statements and where defendants settled with Chi and Walker and
changed its position in the lawsuit to its detriment in reliance thereupon.
Mallen
and Smith observe with regard to the element of reliance, that “[t]he rule that
an opinion is not actionable does not necessarily apply to an attorney’s
representations to a client. A
representation of the state of law or of legal principles by an attorney can be
a representation of fact. Therefore, an
attorney’s advice or opinion, if knowingly false, can be fraud.†(Mallen and Smith, 1 Legal Malpractice,
fns. omitted, citing non-California cases.)
At the same time, the treatise acknowledges, “[a] statement of intended
conduct, however, can be the basis of fraud only if the statement was false
when made.†(Id. at p. 990, fn
the anticipated result in litigation, however, is not a representation of
material fact.†(Ibid., fn. omitted.)
Defendants
alleged in their second amended complaint that O&O made knowingly false
statements that the Chi and Walker “apology letters†and statements would be
admissible at trial, intending to induce defendants to settle with the pair and
that defendants did so in reliance upon those statements. As the trial court observed, such statements
were “based on a prediction of future events, which neither [plaintiff] nor
[defendants] could completely control, and on an additional prediction about
the effect of such testimony on the jury.â€
That O&O was motivated to end the action did not change the tenor of
the claim from malpractice to fraud. As
the trial court concluded, “The nature of the conduct alleged was still a
‘judgment call’ made by an attorney while providing legal services, and the
only alleged harm resulting from that conduct is damage to the client’s claims
and defenses in the underlying action.â€
Defendants
contend the trial court misapplied Jackson
v. Rogers & Wells (1989) 210 Cal.App.3d 336 (Jackson), which held that a fraud cause of action that was
essentially a cause of action for legal malpractice could not be assigned. In Jackson,
Jackson sued Mix for legal malpractice and securities fraud. On the advice of the attorneys representing
him and his malpractice insurers, Mix rejected various settlement offers by
Jackson and proceeded to trial, which resulted in a $1 million-plus judgment in
favor of Jackson. Based on the refusal
of Mix and his insurers’ and counsel’s refusal to settle, Jackson filed suit
against them, eventually settling with the insurance company, who assigned to
Jackson their claims against the attorneys formerly representing Mix and
insurers. Jackson alleged, among other
things, that the attorneys misrepresented and omitted to disclose the content
of documentary and testimonial evidence to the carriers, purposefully underestimated
to them Mix’s potential for liability, performed unnecessary and improper legal
services only to prolong litigation and prevent settlement and that but for
this fraud, Mix would have settled earlier with Jackson, for a smaller sum than
the eventual judgment. (
defendants’ demurrer on the theory that legal malpractice claims were not
assignable, whether sounding in negligence or in intentional conduct.
The
Court of Appeal affirmed (Jackson,
p. 338), holding that the plaintiff’s allegations of fraud in reality
stated only a legal malpractice claim.
The court’s holding rested on its conclusion that “[t]he conduct
alleged, representations regarding evidence and the state of the law,
evaluations of the probability the client would prevail in the action, and
allocation of resources to the client’s case, all constitute ‘judgment calls’
within the scope of the attorney’s legal representation of the client.†(Id.
at p. 346.) The same is true in the
instant case.
Defendants’ reliance on
145 Cal.App.4th 170, 185 (Charnay)
does not convince us otherwise. There
the appellate court reversed the trial court’s sustaining of a demurrer to
causes of action for malpractice, intentional fraud and negligent
misrepresentation. However, the case is
distinguishable. As the trial court recognized, in Charnay, the gravamen of the plaintiff’s claim for fraud was
fraudulent billing practices and false representations designed to generate
excessive attorney’s fees at plaintiff’s expense. Here, the claim is founded on the provision
of incorrect legal advice that
allegedly resulted only in the loss of defendants’ claims against Walker and
Chi and damage to its claim against Hakimoglu.
Defendant’s
reliance on Pollack v. Lytle (1981)
120 Cal.App.3d 931, is also unpersuasive as that case was an action
between co-counsel, not by a client
against his or her attorney. (
adequately stated a cause of action for breach of fiduciary duty and fraud, but
determined that the claim of legal malpractice was subsumed by either the
breach of contract action or was subsumed in the breach of fiduciary duty cause
of action. (Id. at p. 944.)
disapproved by the California Supreme Court in Beck v. Wecht (2002) 28 Cal.4th 289, 292–298, which held that
one co-counsel may not sue another for breach of fiduciary duty on the theory
that the latter’s malpractice in handling their mutual client’s case either
reduced or eliminated the fees the former expected to realize. (Id.
at pp. 290–291.)
The
trial court did not err in sustaining the demurrers to the fraud causes of
action of defendants’ cross-complaints.
To hold otherwise in this case would conflate the torts of malpractice
and actual fraud, turning every attorney malpractice claim into a fraud cause
of action, and undermining the statute of limitations for attorney malpractice.
II. No Error in Permitting Trial Counsel’s
Withdrawal
Defendants contend the court improperly permitted
defendants’ trial counsel, Braden, to withdraw two months before the scheduled
trial date. Defendants assert that it
was “highly prejudicial for the court to allow the Braden firm to withdraw and
to do so without extending discovery indefinitely.†(Italics added.)
To
support their prejudice claim, defendants assert that the matter had been
pending for several years, that no depositions had been taken and paper
discovery was outstanding, that motions to compel discovery and for sanctions
were pending, O&O’s motion for a writ of attachment was pending, and that
no expert had been retained for defendants except Mallen, who had prepared a
declaration in opposition to the writ of attachment. Defendants further assert that Braden had
done nothing to establish any of the defenses defendants had to the fee claim,
that papers accompanying Braden’s motion to withdraw were highly prejudicial to
Sezerman, that Braden poisoned the court against defendants by disclosing
confidential communications between Braden and defendants, and the court failed
to give defendants adequate time to prepare for trial. These prejudice assertions are disputed by
O&O and, for the most part, are unsupported by the record. More importantly, they are irrelevant here,
where defendants consented to
Braden’s withdrawal.
The
only authority cited by defendants in support of this claim is rule 3-700
of the State Bar Rules of Professional Conduct regarding “Termination of
Employment.†(Rules Prof. Conduct, rule
3-700(A)(2), (C).)
title="">[6] These relate to the attorney’s
responsibilities to the client, but do not determine whether counsel has shown
“good cause†for withdrawal. Defendants
do not cite the relevant statute, section 284, which provides: “The attorney in an action or special
proceeding may be changed at any time before or after judgment or final
determination, as follows:
[¶] 1. Upon the consent
of both client and attorney, filed with the clerk, or entered upon the minutes;
2. Upon the order of the court, upon the application of either client or
attorney, after notice from one to the other.â€
(Italics added.)
Defendant
consented to the substitution and our
review of the record persuades us that his consent was both knowing and
voluntary and that no undue pressure was exercised by the court to secure his
consent to counsel’s withdrawal. Indeed,
Sezerman engaged in what appeared at times to be a protracted “negotiationâ€
with the court, trying to have it both ways—Braden staying in
discovery and trial. That the court gave
him a clear choice in the circumstances does not amount to an abuse of
discretion.
title="">[7] We find no abuse of discretion in the court’s
granting of Braden’s motion to withdraw.
(Manfredi & Levine v. Superior
Court (1998) 66 Cal.App.4th 1128, 1133.)
III. Mallen’s Expert Testimony and Directed
Verdict
Defendants contend the court prejudicially erred when
it struck the opinions of OZ’s expert witness Ronald Mallen as to issues
related to OZ’s affirmative defenses that OZ was entitled to deductions from
O&O’s fees where O&O performed negligently and where O&O breached
its contract with defendants. O&O
counters that the court never struck Mallen’s testimony, but rather, it granted
O&O’s motion for a partial directed verdict as to OZ’s setoff defense of
legal malpractice on the ground that OZ had presented no evidence of causation
or damages. Citing Orrick Herrington & Sutcliffe v. Superior Court (2003)
107 Cal.App.4th 1052 (Orrick)
and our opinion in Fair v. Bakhtiari (2011)
195 Cal.App.4th 1135 (Fair),
defendants maintain that OZ need not identify proximate causation or damages to
seek a reduction in billing via this affirmative defense. We find no error.
First,
as O&O points out, the court did not strike Mallen’s opinions. The court admonished counsel that Mallen’s
opinions could be referenced in closing argument only if relevant to OZ’s affirmative defenses other than malpractice—“there’s no legal malpractice setoff claim
before the jury.†The court acknowledged
that references could be made to Mallen’s testimony regarding the likelihood of
success of the motion for judgment notwithstanding verdict in the
would have authorized O&O to go forward with that motion had they known it
would have been futile, so long as defendants did not attempt to argue legal
malpractice. “Otherwise everything else
he said was for malpractice.â€
Second,
“[i]n California a viable legal malpractice claim requires proof of ‘(1) the
duty of the attorney to use such skill, prudence, and diligence as members of
his or her profession commonly possess and exercise; (2) a breach of that
duty; (3) a proximate causal connection between the breach and the
resulting injury; and (4) actual loss or damage resulting from the
attorney’s negligence.’ (
25 Cal.4th 1194, 1199.) The third
and fourth elements cannot be overlooked.
(Viner v. Sweet (2003)
30 Cal.4th 1232, 1242.)†(
Bockius, LLP (2010) 183 Cal.App.4th 238, 247–248.)
We
reject defendants’ assertion that neither causation nor damages are required
elements of a legal malpractice claim raised as an affirmative defense to an
attorney’s action against the former client for unpaid fees. Defendants maintain the court’s partial
directed verdict on defendants’ legal malpractice defense runs counter to the
teaching of Orrick, supra, 107 Cal.App.4th
1052 and Fair, supra, 195 Cal.App.4th
1135.
In
1052, a former client (Malcolm), sued his former attorneys for professional
negligence, breach of contract, and breach of fiduciary duty in preparing a
marital settlement agreement for him.
The law firm cross-complained for attorney’s fees owed and moved for
summary adjudication on the individual causes of action, asserting Malcolm
could not prove actual damages, an essential element of each of his causes of
action. (Id. at p. 1055.) The
trial court denied summary judgment for the law firm and Division Four of this
court issued a peremptory writ vacating the trial court’s order and directing
it to grant summary adjudication in favor of the law firm on Malcolm’s
professional negligence and breach of fiduciary duty causes of action. (Id.
at pp. 1057–1060.) The court
allowed the case to proceed on the client’s contract
claim on the ground that if the client were overcharged for defendant’s
services, such constituted contract damages.
(Id. at p. 1061.) In the course of its determination, the appellate
court rejected the client’s claim that the fees he paid the law firm
constituted actual damages in his malpractice case. According to the court, that “proposition is
true only so far as Malcolm is claiming he paid more than the value of the
legal services he received. ([
If he can prove he did not receive value for his payment, he may recover
damages ‘to the extent’ the fees exceeded the value of the services
received. [Citation.] Thus, Malcolm’s recovery is limited to the
amount of fees paid.
[¶] . . . [W]e believe it is evident that an
overpayment for services is contract damages.
As we have already explained, where the law to be otherwise, tort
damages would exist in every instance an attorney collected a fee.†(Id.
at p. 1060, fn. omitted.)
Nowhere
in the foregoing did the appellate court in Orrick,
supra, 107 Cal.App.4th 1052, indicate that the elements of causation
and damages would not apply to any affirmative defense based on legal
malpractice. It addressed only the
causes of action raised in Malcolm’s complaint.
The case does not stand for the proposition that causation and damages
are not essential elements of a legal malpractice claim raised as an
affirmative defense to a fee claim. (See
also, Callahan v. Gibson, Dunn &
Crutcher LLP (2011) 194 Cal.App.4th 557, 577–578 [payment of legal
fees for services negligently performed does not constitute “actual injury†for
purposes of a malpractice injury].) As
observed by the court in Callahan v.
Gibson, Dunn & Crutcher LLP, “Legal fees for defective services will
inevitably be ‘excessive’: The client
received less than it had agreed to pay for (that is, services performed with
ordinary skill and knowledge). To equate
these potential damages with actual injury would return California to a strict,
occurrence-based limitations period for malpractice claims, contrary to the
Legislature’s express purpose in adopting section 340.6 [citation].†(Ibid.)
Further,
in the case before us, the court denied
O&Os motion for directed verdict on the affirmative defenses alleging
breach of contract and breach of fiduciary duty and OZ was allowed to
present those defenses to the jury.
Nor
does our opinion in Fair, supra, 195 Cal.App.4th
1135, assist defendants. It arises in
the context of a former client’s claim that an attorney seeking quantum meruit
recovery of fees and other sums owed for services rendered had
client, where the trial court had declared a business agreement between the
attorney, client and client’s businesses to be void and unenforceable due to
the fiduciary breaches. The business
agreements conferred significant financial advantages on the attorney before
they were voided at the clients’ election, and the material terms and
conditions of the business transactions were not fully explained to and
understood by the client at the time. We
held that the attorney seeking quantum meruit recovery failed to rebut the
presumption that his business transactions with his clients were a breach of
his fiduciary duty and the product of undue influence, thus supporting the
trial court’s denial of quantum meruit recovery for the value of the attorney’s
services, even if each of the business transactions was fair and reasonable, and
the business was very successful. (
required where the client sought forfeiture of attorney’s fees rather than tort
compensation for the fiduciary duty violations.
In so concluding, we observed that the attorney had “conflate[d] the
tort cause of action for breach of fiduciary duty, which requires damages as an
element [citation] with the breach of a fiduciary duty to a client under
[Probate Code] section 16004, sufficient to warrant voiding of an
agreement. Breach and damages are two
distinct elements of the tort cause of action.
An attorney may violate the statute and breach his or her fiduciary
duties to the client without causing the client damages. It makes sense to require proof of damages
where the client seeks compensatory damages as a tort remedy for breach of
fiduciary duty, but not if the client seeks only forfeiture of fees. The purpose of compensatory damages is to
make plaintiffs whole for harm caused by defendants. (See Rest.2d Torts, § 903, com. a,
pp. 453–454.) Forfeiture of legal
fees serves several different purposes.
It deters attorney misconduct and recognizes that damage caused by
attorney misconduct is often difficult to assess. (Rest.3d The Law Governing Lawyers,
§ 37, com. b, p. 272.) It
prevents fiduciaries from profiting from their fiduciary breach and
disloyalty. [Citations.] Like compensatory damages, it compensates
clients for harm they have suffered, but it reflects not the harms the clients
suffer from the tainted representation, but the decreased value of the
representation itself. [Citation.]†(
proved damages by showing the attorney had received “disproportionate back-end
interests and profits from those investments to which [the attorney] claimed
entitlement.†(Id. at p. 1154.)
Our
holding and discussion in Fair, supra, 195 Cal.App.4th
1135, arose in the specific context
of the claimed violations of fiduciary duty under the Code of Professional
Responsibility and the Probate Code and our discussion was limited to that
context. We are aware of no authority
extending either our holding or its rationale to the context of legal
malpractice raised as an affirmative defense.
Furthermore, unlike the Fair case,
the fee agreement between O&O and defendants was not declared void. The jury found the fee agreement was fully
performed by O&O. Finally, the jury
specifically rejected defendants’ affirmative defense that O&O had breached
its fiduciary duty to defendants.
Consequently,
we conclude the trial court did not err in granting the partial directed
verdict in favor of O&O on defendants’ legal malpractice affirmative
defense, as defendants failed to present substantial evidence of the requisite
legal elements of causation or damages.
The court did not err in admonishing the jury that legal malpractice by
O&O was no longer an issue in the case.
Nor did the court err in admonishing counsel that they were not to refer
to Mallen’s testimony insofar as it related to OZ’s legal malpractice
IV. Other Claims of Error Forfeited
Defendants
raise the following claims of reversible error, including: (1) the court erroneously denied them
access to O&O’s billing records for other clients, preventing them from
establishing their fraudulent billing claim; (2) the court abused its
discretion in refusing to extend discovery to allow defendants and new counsel
to prepare for trial; (3) the trial judge should have disqualified herself
where there was evidence she was biased against defendants; (4) the court
erroneously denied OZ’s requests for mistrial where witnesses made inflammatory
comments against Sezerman; and (5) the court erroneously denied OZ’s
mistrial request where the court committed judicial misconduct during the trial
by reprimanding Sezerman for being nonresponsive, removing him from the
courtroom on two occasions, calling police officers into the courtroom because
of a mistaken belief Sezerman was being disruptive, interfering with the
communications between Sezerman and his attorney, and interfering with the
order of witnesses.
Defendants
have waived the foregoing claims by failing to support them by citation to
legal authority. (Eisenberg, Civil
Appeals and Writs, supra, ¶¶ 8:17.1,
8:17.2, pp. 8-6 to 8-7, and cases there cited.) “ ‘An appellate brief “should contain a
legal argument with citation of authorities on the points made. If none is furnished on a particular point,
the court may treat it as waived, and pass it without consideration.†[Citation.]’
[Citation.] Again, ‘This court is
not inclined to act as counsel for . . . any appellant and
furnish a legal argument as to how the trial court’s rulings in this regard constituted
an abuse of discretion’ [citation], or a mistake of law.†(Niko
v. Foreman (2006) 144 Cal.App.4th 344, 368.)
In
addition, record citations for many of defendants’ claims on appeal are
inadequate or missing altogether.
Defendants frequently mischaracterize what occurred in the proceedings
below or the tenor of the court’s rulings.
Particularly with respect to defendants’ claims that the trial judge was
biased and committed judicial misconduct, our review of the record convinces us
this trial judge (Hon. Ronni MacLaren) exercised great patience and
restraint in dealing with counsel and with the parties, particularly with
Sezerman, who was disrespectful to the court and frequently disruptive to the
proceedings. Although we find the judicial misconduct claim was waived, we also
find it to be completely without merit.
V. Sanctions Motion
O&O
seeks sanctions of $43,795 against defendants OZ and Sezerman and against
appellate counsel Michael Keck. O&O
argues the appeal was objectively and subjectively frivolous and intended to
harass O&O and to delay proceedings.
O&O further contends that defendants’ and Keck’s numerous violations
of the appellate rules warrant sanctions in connection with this appeal.
In
connection with oral argument, we notified the parties we were considering
imposing sanctions and allowed defendants and Keck to file written opposition
and O&O to file a reply.
(Rule 8.276(c).) Our review persuades
us that sanctions are warranted in this case.
“Our
Supreme Court in In re Marriage of
Flaherty [(1982)] 31 Cal.3d 637,
set forth the applicable standard:
‘an appeal should be held to be frivolous only when it is prosecuted for
an improper motive—to harass the respondent or delay the effect of an adverse
judgment—or when it indisputably has no merit—when any reasonable attorney
would agree that the appeal is totally and completely without merit. [Citation.]’
([Id.] at p. 650.)†(Pollock
v. University of Southern California (2003) 112 Cal.App.4th 1416,
1432.) In addition, under the California
Rules of Court, rule 8.276, we may impose sanctions not only for the
taking of a frivolous appeal or appealing solely to cause delay, (rule
8.276(a)(1)), but also for the following:
“(2) Including in the r
| Description | Defendants and cross-complainants OZ Optics Ltd., Oz Optics, Inc. (collectively OZ), and Omur Sezerman appeal from a judgment entered after a jury trial in favor of plaintiff and cross-defendant O’Keefe & O’Keefe, LLP (O&O), defendants’ former attorneys.[1] O&O sued defendants for failing to pay for legal services rendered by O&O in connection with two matters: OZ Optics Limited, et al. v. Hakimoglu, et al. (Alameda County Super. Ct. No. 01-0334488) (the Hakimoglu action) and Reinhard v. Bitmath, Inc., et al. (Santa Clara County Super. Ct. No. 1-02-CV-810955) (the Reinhard action). The jury awarded O&O damages against OZ in the sum of $190,142.54 with interest from the date of entry of judgment, plus costs. [2] On appeal, defendants contend: (1) the trial court improperly dismissed all causes of action of defendants’ cross-complaint for failure to comply with the one-year statute of limitations for attorney malpractice (Code Civ. Proc., § 340.6) [3] and erroneously found O&O was not estopped to rely on the statute; (2) the trial court abused its discretion in allowing defendants’ trial counsel to withdraw before the outset of trial in circumstances where such withdrawal prejudiced defendants; (3) the court prejudicially erred when it struck the opinions of OZ’s expert witness Ronald Mallen, Esq. as to issues related to OZ’s affirmative defenses that OZ was entitled to deductions from O&O’s billing where O&O performed negligently and breached its contract with defendants; and (4) the court erroneously granted a partial directed verdict for O&O on OZ’s affirmative defense asserting an offset for sums owing due to O&O’s professional negligence.[4] We shall affirm the judgment. |
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