Orton v. Gibbs

Filed 4/24/07 Orton v. Gibbs CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Daniel S. Pratt, Judge. (Judge of the L.A. Super. Ct. assigned by the Chief Justice pursuant to art. VI,  6 of the Cal. Const.) Affirmed.

Kevin Orton, in pro. per., for Plaintiff and Appellant.

Law Offices of Ronald J. Cozad and Ronald J. Cozad for Defendants and Respondents.

* * *

Plaintiff Kevin Orton appeals from a judgment in favor of defendants Timothy J. Gibbs and The Gibbs Law Firm in his legal malpractice action. This appeal arises out of an action previously before us (Orton v. Virtual Fonlink, Inc. (Nov. 18, 2004, G032862) [nonpub. opn.]). As set forth in that opinion, plaintiff sued Virtual to foreclose on a security interest in a patent assigned to it. Plaintiff prevailed in his action but filed a cross-appeal from the $60,000 limit on the amount of debt secured by the patent, claiming he was entitled to $180,000. (Id. at p. 2.)

There were two security agreements and financing statements at issue in the first appeal. (Orton v. Virtual Fonlink, Inc., supra, G032862, pp. 2-3.) The first security agreement and financing statement secured a $60,000 loan with a patent. (Id. at pp. 2-3, 5, 6.) A second security agreement and financing statement secured a $120,000 loan. (Id. at p. 3.) The collateral securing the loan was described as telephone units. (Ibid.) The financing statement contained the following language: Additional security as referred to under [first financing statement] U.S. patents of debtor . . . amount increased to $180,000. (Ibid.)

Plaintiff argued in the first appeal that that language of the second financing statement increased the loan amount secured by the patent to $180,000. (Orton v. Virtual Fonlink, Inc., supra, G032862, p. 8.) We rejected this argument and affirmed the judgment for $60,000. (Id. at p. 2.)

Plaintiff sued defendants, his trial counsel, claiming that in the trial court they had negligently failed to argue plaintiffs claim of a security interest in the amount of $180,000. Defendants moved for summary judgment, arguing that our opinion limiting recovery to $60,000 was the law of the case. Defendants asserted in their separate statement that, on appeal, plaintiffs new counsel had made the argument plaintiff claimed they should have made at trial and had not prevailed.

Plaintiff disputed these claims. He maintained that defendants should have argued that the combined language of the two financing statements, plaintiffs testimony, and deposition testimony of the debtor would have demonstrated the security interest was $180,000. Because the deposition testimony was not introduced, however, the trial court refused to consider it. Plaintiff further argued that the appellate court never considered the deposition testimony or his argument as to the combined evidence in reaching its decision.

In its initial tentative ruling, the trial court granted the motion, stating that the interpretation of the second financing statement by both the trial court in the underlying action and the appellate court that the secured amount was $60,000 became law of the case. It further ruled that plaintiff was barred by collateral estoppel from relitigating the merits of the case. After argument, the court allowed supplemental briefing.

In the subsequent portion of the tentative ruling, dealing with the deposition testimony, the court stated that [p]laintiff failed to provide any evidence in the underlying action that the contract was ambiguous or, in connection with this motion, that he could have achieved a more favorable result [and] failed to meet his burden of creating a triable issue of material fact.

The following is the deposition testimony of the debtor about the second financing statement that plaintiff contends defendants should have introduced:

Q. What was your understanding of the meaning of that statement at the time that [it] was prepared? [] A. I believe that it goes back to [the first financing statement], and that means that the increased value of [$]180,000 is applicable, in lieu of the amount of $62,500 [sic].

To recover on a legal malpractice claim, plaintiff must prove (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 attorneys negligence. [Citations.] (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199.) To show damages proximately caused by the breach, the plaintiff must [prove] facts establishing that, but for the alleged malpractice, it is more likely than not the plaintiff would have obtained a more favorable result. [Citations.] (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 179.)

Assuming that the testimony had been offered, plaintiff did not and could not prove it is more likely he would have received a better result, that is, that he would have obtained a judgment of $180,000 instead of $60,000. The deposition testimony was parol evidence, which is admissible only if it is relevant to prove a meaning to which the language of the instrument is reasonably susceptible. [Citations.] (Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37; see also Founding Members of the Newport Beach County Club v. Newport Beach County Club, Inc. (2003) 109 Cal.App.4th 944, 955.) This can be determined from the language of the contract itself [citation] or from extrinsic evidence of the parties intent [citation]. (Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 848.)

In our first opinion we stated that plaintiffs interpretation of the second financing agreement that the patent secured $180,000 was not the only or even the correct reading of the language. (Orton v. Virtual Fonlink, Inc., supra, G032862, p. 8.) This holding is a determination that the language of the financing statement was not reasonably susceptible to the meaning plaintiff suggests. The deposition testimony does not change that determination.

None of plaintiffs arguments persuades otherwise. Plaintiff contends that the second financing statement is itself a security agreement, with the power to modify (increase) the lien amount of prior documents. (Underscoring omitted.) But the second financing statement had an accompanying security agreement that could not be ignored. Further, even considering it independently, it still contains the language that we determined did not mean the patent secured $180,000.

Plaintiff seems to suggest his attorney in the first appeal may have committed malpractice. But this was not alleged in the complaint nor a subject of the motion for summary judgment. We may not consider it.

Plaintiff also challenges the trial courts reliance on collateral estoppel in granting the motion for summary judgment. That is not a basis for our decision. Finally, the value of the patent is not relevant to the issue before us.

The judgment is affirmed. Respondents are entitled to costs on appeal.

RYLAARSDAM, ACTING P. J.

WE CONCUR:

BEDSWORTH, J.

FYBEL, J.

Publication Courtesy of California attorney referral.

Analysis and review provided by Vista Property line attorney.