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1 Jason E. Fellner - 245364
JFellner@mpbf.com
2 Kevin D. Cardona - 314033
KCardona@mpbf.com ELECTRONICALLY
3 MURPHY, PEARSON, BRADLEY & FEENEY
580 California Street, Suite 1100 F I L E D
Superior Court of California,
4 San Francisco, CA 94104-1001 County of San Francisco
Telephone: (415) 788-1900
5 Facsimile: (415) 393-8087 11/09/2020
Clerk of the Court
BY: SANDRA SCHIRO
6 Attorneys for Cross-Defendants Deputy Clerk
LUSCUTOFF, LENDORMY & ASSOCIATES and
7 JEAN-YVES LENDORMY
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SAN FRANCISCO
11
LUSCUTOFF, LENDORMY & ASSOCIATES; Case No.: CGC-19-576483
12 and JEAN-YVES LENDORMY,
MEMORANDUM OF POINTS AND
13 Plaintiffs, AUTHORITIES IN SUPPORT OF CROSS-
DEFENDANTS LUSCUTOFF, LENDORMY
14 v. & ASSOCIATES AND JEAN-YVES
LENDORMY'S MOTION FOR SUMMARY
15 OLIVIER AUFFRET; and VIRGINIE LECLAIR, JUDGMENT, OR IN THE ALTERNATIVE,
MOTION FOR SUMMARY
16 Defendants. ADJUDICATION, OF OLIVIER AUFFRET
AND VIRGINIE LECLAIR’S FIRST
17 AMENDED CROSS-COMPLAINT
OLIVIER AUFFRET; and VIRGINIE LECLAIR,
18
Cross-Complainants, Reservation Number:
19
v. Date: January 22, 2021
20 Time: 9:30 a.m.
LUSCUTOFF, LENDORMY & ASSOCIATES; Dept.: 302
21 JEAN-YVES LENDORMY; and Does 1 to
100, inclusive, Complaint Filed: June 5, 2019
22 Cross-Complaint Filed: November 27, 2019
Cross-Defendants. Trial Date: February 22, 2021
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ............................................................................................................. 4
4 II. STATEMENT OF UNDISPUTED MATERIAL FACTS................................................. 6
5 III. LEGAL ARGUMENT ....................................................................................................... 9
6 A. The Entire Cross-Complaint and Each Cause of Action is Time-barred by the
Legal Malpractice Statute of Limitations, C.C.P. § 340.6 ..................................... 9
7
1. The Gravamen of Cross-Complainants’ Causes of Action Pleads Legal
8 Malpractice, Thus C.C.P. § 340.6’s Statute of Limitations Provisions
Apply.......................................................................................................... 9
9
2. Even Under the Most Generous Interpretation of C.C.P. § 340.6’s Statute
10 of Limitations Provisions, the Cross-Complaint is Untimely and Legally
Barred....................................................................................................... 12
11
b. Even under C.C.P. § 340.6’s generous tolling provision, the Cross-
12 Complaint was untimely .......................................................................... 13
13 3. The Court Has Grounds to Dismiss the Entire Cross-Action on the
Statute of Limitations Affirmative Defense and Need Not Address the
14 Merits of the Cross-Complaint................................................................. 15
15 B. Cross-Complainants Fail To Establish Each Essential Element Of Their Implicit
Legal Malpractice Claim...................................................................................... 16
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1. Cross-Complainants do not assert they could have achieved a better
17 outcome but for the alleged legal malpractice ......................................... 16
18 2. The alleged violations of the Rules of Professional Conduct are not
actionable for damages............................................................................. 17
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C. Cross-Complainants Fail To Establish Each Essential Element Of Their Cause
20 Of Action For An Accounting ............................................................................. 17
21 D. Cross-Complainants Fail To Establish Each Essential Element Of Their Cause
Of Action For Disgorgement Of Fees.................................................................. 18
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1. “Disgorgement of Fees” is a remedy, not a standalone cause of action .. 18
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2. Disgorgement is not an available remedy, nor authorized by law ........... 19
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a. Lendormy cannot be his own runner and capper ......................... 19
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b. Disgorgement is not an available remedy because Cross-
26 Complainants have not suffered any damages ............................. 20
27 E. Cross-Complainants Fail To Establish Each Essential Element Of Their Cause
Of Action For Conversion.................................................................................... 21
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 IV. CONCLUSION ................................................................................................................ 22
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 I. INTRODUCTION
2 Pursuant to C.C.P. § 437c, Cross-Defendant attorney Jean-Yves Lendormy (“Lendormy”), and
3 Cross-Defendant law firm Luscutoff, Lendormy & Associates (“LLA”) (collectively “Plaintiffs”1 and
4 “Cross-Defendants”) herein move for summary judgment, or in the alternative, summary adjudication,
5 of all causes of action alleged against them by Cross-Complainants Olivier Auffret (“Auffret”) and
6 Virginie Leclair (“Leclair”) (collectively “Defendants” and “Cross-Complainants”). Each of Cross-
7 Complainants’ causes of action, and their entire First Amended Cross-Complaint (hereinafter “Cross-
8 Complaint”), fail as a matter of law, and should be summarily adjudicated, because (1) California’s one-
9 year statute of limitations to bring a legal malpractice claim under C.C.P. § 340.6 acts as an affirmative
10 defense to the entire Cross-Complaint; and (2) Cross-Complainants cannot establish all essential
11 elements of each of their first cause of action for an accounting, second cause of action for disgorgement
12 of fees, and third cause of action for conversion (collectively “Cross-Claims”).
13 On April 28, 2009, Defendants, French tourists, were seriously injured in a bus accident in
14 Monterey County. They and the majority of the other 31 bus passengers retained Plaintiffs as their
15 attorneys to prosecute personal injury actions against the tour company and other defendants (“bus
16 accident defendants”) on a contingency basis. Throughout nine (9) years of litigation, LLA advanced
17 payments to the Defendants for medical or other expenses2 which, due to an oversight in accounting, led
18 to an accidental overpayment to the Defendants once final settlement funds were disbursed. After
19 Plaintiffs were unsuccessful in obtaining reimbursement of the funds from the Defendants informally,
20 on June 5, 2019, they filed the instant action (i.e., Plaintiffs’ “Fee Claim”).
21 On November 27, 2019, Auffret and Leclair filed retaliatory Cross-Claims seeking principally
22 reimbursement of litigation expenses deducted from their settlement sums which were allegedly not
23 authorized by the legal services agreements; and, due to Cross-Defendants’ alleged ethical violations,
24 all of the attorney’s fees Cross-Defendants earned from Cross-Complainants’ settlements.
25 Notwithstanding the Cross-Complaint’s (deliberate) omission of the term “legal malpractice” in
26
1
Plaintiffs represent themselves in pro per with respect to the fee claims they filed against Defendants on June 5, 2019.
27 2
To avoid their financial hardship resulting from the receipt of local medical care while being uninsured in the U.S.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 their pleadings, the gravamen of the Cross-Claims alleges that Cross-Defendants violated their
2 professional obligations in the provision of legal services. Specifically, all of the Cross-Claims arise
3 from Cross-Complainants’ engagement of Cross-Defendants’ legal services to prosecute personal injury
4 actions on their behalf for injuries they sustained during the 2009 bus accident.
5 Cross-Complainants employ artful pleading in an apparent attempt to circumvent the one-year
6 statute of limitations applicable to their Cross-Claims. However, each of the accounting, disgorgement
7 of fees, and conversion causes of action seek to recover damages on a violation of the same primary
8 right, i.e. to receive professional legal services within the applicable standard of care. Therefore they
9 each fall within the ambit of C.C.P. § 340.6. While not styled as separate causes of action, to support
10 their recovery of damages, Cross-Complainants allege that Cross-Defendants breached contractual
11 obligations and fiduciary duties owed to them by virtue of being their attorneys. Such claims are
12 governed by C.C.P. § 340.6 just the same as actions claiming an attorney made a poor argument or
13 procedural mistake that resulted in an adverse outcome for the client.
14 Cross-Defendants represented the Cross-Complainants in the personal injury actions from
15 approximately May 12, 2009, until Nov 13, 2017, at which time Cross-Defendants wired the last
16 settlement payments to the Cross-Complainants. Cross-Complainants admit, as is also supported by
17 other evidence cited herein, that their attorney-client relationship with Cross-Defendants ended more
18 than one (1) year before the Cross-Complainants filed their cross-action on November 22, 2017.3 In fact,
19 at the time the Cross-Claims were filed, they were already one (1) year outside of the limitations period.
20 Cross-Complainants’ failure to bring their causes of action within the applicable statute of
21 limitations serves as an absolute affirmative defense to their cross-action, and the Court should grant this
22 motion for summary judgment on those grounds alone. The Court need not examine the evidence (or
23 lack thereof) relating to the merits of the Cross-Claims. However, should the Court find that the Cross-
24 Claims are timely, they still fail as a matter of law because Cross-Complainants cannot establish each
25 essential element with evidence. Thus, no triable issues of fact remain.
26
3
Cross-Complainants subsequently filed a First Amended Cross-Complaint on December 11, 2019, which is the operative
27
pleading, but contains identical causes of action.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 (1) Cross-Complainants’ implicit legal malpractice claim fails because (a) Cross-Defendants
2 cannot establish, and do not allege, that Cross-Complainants could have obtained a better result
3 (settlement, judgment, or otherwise) but for Cross-Defendants’ breach of the standard of care;
4 (2) The first cause of action for an accounting fails because the sums Cross-Defendants seek are
5 certain and ascertainable by them without involvement of the Court;
6 (3) The second cause of action for disgorgement of fees fails because (a) the remedy Cross-
7 Complainants seek is not authorized by any statutory or common law, including any authority cited in
8 the pleadings, and (b) because “disgorgement of fees” pleads a remedy but not an indivisible primary
9 right or violation; and
10 (4) The third cause of action for conversion fails because Cross-Complainants did not have a
11 legal right of ownership to the funds deducted for litigation expenses or attorney’s fees; their deduction
12 was lawfully authorized by contract.
13 As demonstrated in further detail herein, the undisputed material facts and legal authority
14 establish that Cross-Defendants are entitled to summary judgment and/or adjudication as a matter of law
15 as to all of the causes of action alleged against them by Cross-Complainants.
16 II. STATEMENT OF UNDISPUTED MATERIAL FACTS
17 Lendormy has been an attorney for the law firm LLA, and a principal of LLA since its inception
18 in 1987. (Undisputed Material Fact (“UMF”) 1.) Since the 1990s, Lendormy has served as one of two
19 appointed legal counsel to the French Consulate General in San Francisco, and the only one whose law
20 firm engaged in personal injury matters in California. (UMF 2.) On April 28, 2009, a tour bus on its way
21 to Monterey, California, with 34 French tourists on board, including Cross-Complainants, got into an
22 accident that killed or injured many passengers, the driver, and tour guide (the “bus accident”). Cross-
23 Complainants were injured in the bus accident. (UMF 3.) On April 28, 2009, a French consular official
24 contacted Lendormy, informing him that a passenger injured in the bus accident sought legal advice, and
25 requesting that Lendormy offer his legal assistance to the other injured passengers as well. Lendormy
26 agreed to this request. (UMF 4.) On April 30, 2009, Lendormy met with the French tourists who had
27 first called the French consulate to request legal assistance at the Regional Medical Center San Jose
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 (“RMCSJ”). They requested and did retain Lendormy and LLA as their attorneys. (UMF 5.) Over the
2 next couple of days, Lendormy met with victims of the bus accident who had already become clients,
3 and others at their request for legal consultation, and became their attorney. (UMF 6.)
4 During a subsequent visit to the RMCSJ, Lendormy introduced himself to Auffret as an attorney
5 for the French consulate, and asked basic questions about Auffret’s condition. (UMF 7.) A close relative
6 of Auffret and Leclair arranged for a meeting with Lendormy and Auffret at RMCSJ on May 3, 2009 to
7 discuss their legal options in connection with the bus accident and expressed interest in retaining Cross-
8 Defendants at their attorneys. (UMF 8.) On or about May 7, 2009, Auffret signed a legal services
9 agreement to retain Cross-Defendants as his attorneys. (UMF 9.) After Auffret signed a legal services
10 agreement to retain Cross-Defendants, Auffret introduced Lendormy to Leclair and told her that
11 Lendormy would provide them with legal assistance. (UMF 10.) The next time Lendormy returned to
12 RMCSJ, Auffret handed him Leclair’s executed legal services agreement. (UMF 11.) Cross-
13 Complainants’ legal services agreements with LLA provided for a one third (33.3%) contingency fee
14 from Cross-Complainants’ recovery in their personal injury actions, less advanced litigation costs and
15 expenses. (UMF 12.) Cross-Complainants never informed Lendormy that they were not interested in
16 meeting with or retaining Cross-Defendants as their attorneys. (UMF 13.) Ultimately all 34 French
17 tourists who were passengers in the bus accident, or their heirs and relatives, retained Cross-Defendants
18 to prosecute their claims against the bus accident defendants. (UMF 14.)
19 On June 22, 2009, Cross-Defendants filed a complaint on behalf of Cross-Complainants and
20 other bus accident victims in the Superior Court of California, Monterey County, bearing case number
21 M99601 (California litigation). (UMF 15.) Cross-Defendants litigated the personal injury actions for
22 eight (8) years, during which time the case took complicated procedural turns, including removal to
23 France where Cross-Complainants were also sued by the bus accident defendants, and appeals in France
24 and California. (UMF 16.) Cross-Defendants hired attorneys in France (“French attorneys”) to defend a
25 lawsuit filed by the principal bus accident defendant against all plaintiffs in Paris, including Cross-
26 Complainants. The litigation in France lasted seven (7) years. (UMF 17.) Cross-Defendants advanced
27 the costs of the French attorneys, which pursuant to the legal services agreements, were to be paid by
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 Cross-Complainants only in case of a recovery in their personal injury actions. (UMF 18.)
2 Judges of the California Superior Court ordered the California litigation to mediation on three
3 (3) separate occasion – twice in 2011 and once in 2017. (UMF 19.) Proposed settlements resulting from
4 the mediations were all approved by judges as made in good faith. (UMF 20.) Cross-Defendants kept
5 Cross-Complainants informed about the mediation process, their ability to participate, and the mediator’s
6 determination of their allocated percentage share of the settlements with each bus accident defendant.
7 (UMF 21.) Cross-Defendants set up a website to communicate with clients regularly regarding case
8 updates, including with Cross-Complainants. Each client had a separate account log-in and password to
9 access the information. (UMF 22.) Cross-Complainants executed releases to settle their cases with the
10 various bus accident defendants on three (3) occasions – March 7, 2011, April 21, 2011, and the last one
11 on June 18, 2017. (UMF 23.) Each of the settlement agreements that Cross-Complainants executed with
12 the bus accident defendants conditioned the agreement on the execution of identical releases by all other
13 bus accident plaintiffs. (UMF 24.) On October 25, 2017, Cross-Defendants received the final settlement
14 payment from the remaining bus accident defendants. (UMF 25.) On October 26, 2017, Cross-
15 Defendants made a partial payment of settlement proceeds to Cross-Complainants while Cross-
16 Defendants negotiated payment of liens RMCSJ had placed on the settlements. (UMF 26.) On October
17 26, 2017, Lendormy filed a request for dismissal with prejudice as to the entire action. (UMF 27.) On
18 June 29, 2017, Cross-Defendants communicated with Cross-Complainants regarding the disposition of
19 their client files for the entire 8-year litigation in California. (UMF 28.) On July 17, 2017, Cross-
20 Defendants emailed all of the personal injury plaintiffs to inform them that final payment would follow
21 on November 1, 2017. (UMF 29.) On July 17, 2017, Cross-Defendants also informed all of the personal
22 injury plaintiffs, including Cross-Complainants, that the fees paid to French experts and attorneys for
23 litigation conducted there, would be deducted from their recovery as litigation costs. Leclair expressed
24 her discontent with the deduction of the cost of French attorneys from her recovery. (UMF 30.) Lastly,
25 Lendormy also advised Cross-Complainants that the email and the corresponding settlement payments
26 concluded Cross-Defendants’ representation of them to obtain personal injury damages from the bus
27 accident defendants. (UMF 31.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 On November 3, 2017, Lendormy informed Cross-Complainants that Cross-Defendants received
2 the last payment from Capitales Tours, one of the last settling bus accident defendants. (UMF 32.) On
3 November 13, 2017, Cross-Defendants wired to Auffret and Leclair the last disbursement of funds from
4 their client trust accounts. (UMF 33.) After November 2017, Cross-Defendants no longer communicated
5 with Auffret and Leclair about the personal injury actions, until about February 16, 2019, when
6 Lendormy contacted them regarding an accounting error that led to an accidental overpayment to Cross-
7 Complainants. (UMF 34.) During pre-litigation discussions, including in or around March 2019, Cross-
8 Defendants provided a full accounting to Cross-Complainants and their counsel of their recoveries and
9 deductions for costs and attorney’s fees in the personal injury actions. (UMF 35.) The attorney-client
10 relationship between Cross-Complainants and Cross-Defendants ended at the very latest with the last
11 client trust account payment Cross-Complainants received from Cross-Defendants, on or around
12 November 14, 2017. (UMF 36.) Cross-Complainants never made efforts to determine the adequacy of
13 any costs deducted from their recoveries in the personal injury actions, until they demanded an
14 accounting in or after February 2019. (UMF 37.) Cross-Defendants made no mistake in prosecuting
15 Cross-Complainants’ claims in their personal injury actions that in any way negatively affected or
16 lowered the gross amount of their recoveries. (UMF 38.)
17 III. LEGAL ARGUMENT
18 A. The Entire Cross-Complaint and Each Cause of Action is Time-barred by the Legal
Malpractice Statute of Limitations, C.C.P. § 340.6
19
1. The Gravamen of Cross-Complainants’ Causes of Action Pleads Legal
20 Malpractice, Thus C.C.P. § 340.6’s Statute of Limitations Provisions Apply
21 “To determine which statute of limitations governs a given cause of action, we must first
22 ‘identify the nature of the cause of action, i.e., the “gravamen” of the cause of action.’ The nature of
23 the cause of action and the primary right involved, not the form or label of the cause of action or the
24 relief demanded, determine which statute of limitations applies.” (Austin v. Medicis (2018) 21
25 Cal.App.5th 577, 585.) The C.C.P. § 340.6(a) limitations period applies to claims that “necessarily
26 depend on proof that an attorney violated a professional obligation in the course of providing
27 professional services unless the claim is for actual fraud.” (Lee v. Hanley (2015) 61 Cal.4th 1225,
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 1239.) C.C.P. § 340.6(a) governs all causes of action against an attorney by their client arising from the
2 performance of services for which the attorney was retained, including incidental obligations. This is
3 true whether the theory of liability is based on the breach of an oral or written contract, a tort, or a
4 breach of a fiduciary duty. (See, e.g., Levin v. Graham & James (1995) 37 Cal.App.4th 798, 805;
5 Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 68; Stoll v. Superior Court (1992) 9 Cal.App.4th
6 1362, 1366–1369.)
7 “[T]he pleadings delimit the scope of the issues on summary judgment” (Slovensky v. Friedman
8 (2006) 142 Cal.App.4th 1518, 1535). The “gravamen,” or essence, of the Cross-Complaint alleges that
9 Cross-Defendants violated professional obligations in the course of representing Cross-Complainants
10 to prosecute personal injury actions against the bus accident defendants. The First Amended Cross-
11 Complaint alleges, for example, that Cross-Defendants “in breach of their fiduciary duties to Cross-
12 Complainants unilaterally…deducted from settlement amounts owed to [Cross-
13 Complainants]…expenses which…were…not authorized by any written legal services agreements
14 between the parties…and which were…excessive.” (Index of Evid., Ex. 9, ¶7.) Violations of
15 contractual obligations owed to the client are governed by C.C.P. § 340.6 just as the alleged breaches
16 of fiduciary duty. “In the context of a legal malpractice claim, the statute of limitations on a cause of
17 action for breach of contract is governed by C.C.P. Section 340.6 and not C.C.P. Section 337.” (See
18 Bird Marella Boxer & Wolpert v. Superior Court (2003) 106 Cal.App.4th 419, 430.)
19 Cross-Complainants claim conversion in that Cross-Defendants’ breaches of fiduciary duty and
20 ethical duties owed under Business and Professions Code §§ 6151-6154, and former California Rules
21 of Professional Conduct 1-400 (prohibition against solicitation) and 3-310 (failure to disclose potential
22 conflicts of interest)4 (Index of Evid., Ex. 9, ¶¶13-14), turned Cross-Defendants’ deductions of
23 litigation costs and attorney’s fees into a wrongful taking. (Index of Evid., Ex. 9, ¶¶20-22.) The cause
24 of action for disgorgement of fees – in actuality a remedy, and not a standalone cause of action – is
25 based on the same alleged ethics violations. The Rules of Professional Conduct Cross-Complainants
26
4
As of the filing date of the Cross-Complaint, these were no longer the operative California Rules of Professional Conduct.
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The current version of these rules have differing requirements.
28 - 10 -
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 claim to have been violated by Cross-Defendants, and others as Cross-Complainants may argue,
2 constitute a “professional obligation” within the meaning of C.C.P. § 340.6 (Lee v. Hanley (2015) 61
3 Cal.4th 1225, 1237), so that each of the Cross-Claims, which depend on proof of these violations, are
4 governed by C.C.P. § 340.6’s statute of limitations.
5 On its face the Cross-Complaint alleges claims that “necessarily depend on proof that an
6 attorney violated a professional obligation in the course of providing professional services.” (Lee v.
7 Hanley (2015) 61 Cal.4th 1225, 1239.) In Lee v. Hanley, as here, the plaintiff similarly tried to plead
8 around the statute of limitations bar by styling breaches of fiduciary duties as conversion, without
9 success. “If the facts stated in the complaint show that the basis for the plaintiff's conversion claim is
10 that an attorney provided deficient legal services, then the plaintiff's claim will depend on proof that
11 the attorney violated a professional obligation in the course of providing professional services and will
12 thus be time-barred.” (Id.)5
13 “Professional services,” and the obligations arising therefrom that fall within the ambit of
14 C.C.P. § 340.6, are more encompassing than traditionally legal tasks such as drafting pleadings, taking
15 depositions, arguing in court, etc. C.C.P. § 340.6(a) also covers “nonlegal services governed by an
16 attorney's professional obligations,” which includes, e.g., “nonlegal professional services such as
17 accounting, bookkeeping, and holding property in trust” that lawyers are required to provide as part of
18 the attorney-client relationship. (Lee v. Hanley (2015) 61 Cal.4th 1225, 1237, 1240 [citing to CRPC 4-
19 100 and other CRPC as evidence that legislature intended C.C.P. § 340.6 to apply to “professional
20 obligations that go beyond duties of competence” and include nonlegal services].)
21 Here, Cross-Defendants’ “professional services” within the meaning of C.C.P. § 340.6, in
22 addition to prosecuting personal injury actions as contracted, included incidental obligations like the
23 proper management of their client trust funds, advancement and payment of litigation costs, and other
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26 5
While the Court ultimately allowed leave to amend the complaint in Lee v. Hanley for the plaintiff to attempt to plead a
basis for conversion not precluded by C.C.P. § 340.6, the Court noted that “Section 340.6(a) applies as soon as discovery
27 makes clear that the claim's underlying basis consists of evidence that the attorney provided deficient professional services.”
(Lee v. Hanley (2015) 61 Cal.4th 1225, 1238.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 nonlegal services Cross-Complainants contend Cross-Defendants performed poorly in violation of
2 their professional obligations, whether contractual, ethical, statutory, or at common law.
3 2. Even Under the Most Generous Interpretation of C.C.P. § 340.6’s Statute of
Limitations Provisions, the Cross-Complaint is Untimely and Legally Barred
4
5 C.C.P. § 340.6(a) provides in relevant part:
… an action against an attorney for a wrongful act or omission, other than
6 for actual fraud, arising in the performance of professional services shall
7 be commenced within one year after the plaintiff discovers, or through the
use of reasonable diligence should have discovered, the facts constituting
8 the wrongful act or omission, or four years from the date of the wrongful
act or omission, whichever occurs first.
9
Based on its plain language, the one-year statute of limitations set forth in section 340.6 applies
10
to all actions, except those for actual fraud, brought against an attorney “for a wrongful act or omission”
11
which arises “in the performance of professional services.” Cross-Complainants have not alleged actual
12
fraud in this action.
13
a. Cross-Complainants had notice of the alleged legal malpractice many years
14 in advance of filing their Cross-Claims
15
The one-year limitations period commences when the client discovers or should have discovered
16
the facts essential to the malpractice claim. (Beal Bank, SSB v. Arter & Hadden, LLP (2007) 42 Cal.4th
17
503, 511.) Discovery of attorney malpractice occurs when the aggrieved client knows or should have
18
known the material facts constituting the attorney’s wrongful act or omission. (Neel v. Magana, Olney,
19
Levy, Cathcart & Gelfand, supra, 6 Cal.3d 176, 190.) “‘[P]laintiffs are required to conduct a reasonable
20
investigation after becoming aware of an injury, and are charged with knowledge of the information that
21
would have been revealed by such an investigation. So long as there is a reasonable ground for suspicion,
22
the plaintiff must go out and find the facts; she cannot wait for the facts to find her.” (Slovensky v.
23
Friedman (2006) 142 Cal.App.4th 1518, 1529.)
24
A plaintiff need not be aware of each and every fact or factual allegation of wrongdoing before
25
he or she is deemed to have discovered malpractice, she must merely have a suspicion of being illegally
26
wronged. (Jolly v. Eli Lilly (1988) 44 Cal.3d 1103, 1111.) In assessing allegations of delayed discovery,
27
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 the court places the burden on plaintiff to allege and establish facts showing diligence; conclusory
2 allegations are insufficient. (Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 638 (emphasis
3 added).) “Once the plaintiff suffers actual harm, neither difficulty in proving damages nor uncertainty as
4 to their amount tolls the limitations period.” (Jordache Enterprises, Inc. v. Brobeck, Phleger &
5 Harrison (1998) 18 Cal.4th 739, 752.)
6 Here, Cross-Complainants had ample notice of the damages they allegedly incurred as a result
7 of malpractice. They knew Cross-Defendants retained contract attorneys in France and advanced their
8 fees on Cross-Complainants behalf for seven (7) years (UMF 17), Cross-Complainants were informed
9 about the percentage of the global settlements allocated to them by mediators (UMF 21-22), they knew
10 that their settlements were contingent on all other plaintiffs also signing identical releases with the bus
11 accident defendants (UMF 23-24), and on July 17, 2017, Lendormy informed Cross-Complainants in
12 writing that the cost of attorneys retained in France would be deducted from their recoveries in the
13 personal injury actions. (UMF 30.) Leclair even expressed her discontent with the deduction for fees
14 spent on attorneys hired in France, and claiming the deduction was not known to her before, yet Cross-
15 Complainants did not raise the issue again. (UMF 30.) At that point, Cross-Complainants were on inquiry
16 notice to investigate the facts constituting potential malpractice – i.e. the unauthorized cost deductions.
17 Cross-Complainants admit that they made no efforts to ascertain whether any cost deductions
18 made by Cross-Defendants were improper, until after Plaintiffs first contacted Cross-Complainants
19 regarding the accidental overpayment in or after February 2019. (UMF 37.) Thus, the latest Cross-
20 Complainants were put on notice to investigate the facts constituting alleged malpractice was on July
21 17, 2017.
22 b. Even under C.C.P. § 340.6’s generous tolling provision, the Cross-
Complaint was untimely
23
C.C.P. § 340.6’s one-year statute of limitations governs legal malpractice claims, unless the
24
plaintiff can establish that one of the statutory tolling provisions should apply. (Beal Bank, SSB v. Arter
25
& Hadden, LLP (2007) 42 Cal.4th 503, 508.) “[T]he tolling provisions contained in section 340.6 are
26
exclusive […] the Legislature expressed an intent to disallow tolling under any other circumstances.”
27
28 - 13 -
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF,
LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO
FIRST AMENDED CROSS-COMPLAINT
1 (Gordon v. Law Offices of Aguirre & Meyer (1999) 70 Cal.App.4th 972, 980.) Thus, Cross-Complainants
2 are precluded from asserting equitable tolling to overcome the statute of limitations defense.
3 Of C.C.P. § 340.6’s tolling provisions, the only one applicable to this action is subdivision (a)(2):
4 “the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged
5 wrongful act or omission occurred.” For purposes of the continuing representation rule, representation
6 ends when the client has no objectively reasonable expectation that the attorney will provide further legal
7 services. (Lockton v. O'Rourke (2010) 184 Cal.App.4th 1051, 1063.) “[T]he attorney's representation is
8 concluded as to the specific subject matter when the parties agree, and does not depend on a formal
9 ter
Preview
1 Jason E. Fellner - 245364 JFellner@mpbf.com 2 Kevin D. Cardona - 314033 KCardona@mpbf.com ELECTRONICALLY 3 MURPHY, PEARSON, BRADLEY & FEENEY 580 California Street, Suite 1100 F I L E D Superior Court of California, 4 San Francisco, CA 94104-1001 County of San Francisco Telephone: (415) 788-1900 5 Facsimile: (415) 393-8087 11/09/2020 Clerk of the Court BY: SANDRA SCHIRO 6 Attorneys for Cross-Defendants Deputy Clerk LUSCUTOFF, LENDORMY & ASSOCIATES and 7 JEAN-YVES LENDORMY 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SAN FRANCISCO 11 LUSCUTOFF, LENDORMY & ASSOCIATES; Case No.: CGC-19-576483 12 and JEAN-YVES LENDORMY, MEMORANDUM OF POINTS AND 13 Plaintiffs, AUTHORITIES IN SUPPORT OF CROSS- DEFENDANTS LUSCUTOFF, LENDORMY 14 v. & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY 15 OLIVIER AUFFRET; and VIRGINIE LECLAIR, JUDGMENT, OR IN THE ALTERNATIVE, MOTION FOR SUMMARY 16 Defendants. ADJUDICATION, OF OLIVIER AUFFRET AND VIRGINIE LECLAIR’S FIRST 17 AMENDED CROSS-COMPLAINT OLIVIER AUFFRET; and VIRGINIE LECLAIR, 18 Cross-Complainants, Reservation Number: 19 v. Date: January 22, 2021 20 Time: 9:30 a.m. LUSCUTOFF, LENDORMY & ASSOCIATES; Dept.: 302 21 JEAN-YVES LENDORMY; and Does 1 to 100, inclusive, Complaint Filed: June 5, 2019 22 Cross-Complaint Filed: November 27, 2019 Cross-Defendants. Trial Date: February 22, 2021 23 24 25 26 27 28 -1- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ............................................................................................................. 4 4 II. STATEMENT OF UNDISPUTED MATERIAL FACTS................................................. 6 5 III. LEGAL ARGUMENT ....................................................................................................... 9 6 A. The Entire Cross-Complaint and Each Cause of Action is Time-barred by the Legal Malpractice Statute of Limitations, C.C.P. § 340.6 ..................................... 9 7 1. The Gravamen of Cross-Complainants’ Causes of Action Pleads Legal 8 Malpractice, Thus C.C.P. § 340.6’s Statute of Limitations Provisions Apply.......................................................................................................... 9 9 2. Even Under the Most Generous Interpretation of C.C.P. § 340.6’s Statute 10 of Limitations Provisions, the Cross-Complaint is Untimely and Legally Barred....................................................................................................... 12 11 b. Even under C.C.P. § 340.6’s generous tolling provision, the Cross- 12 Complaint was untimely .......................................................................... 13 13 3. The Court Has Grounds to Dismiss the Entire Cross-Action on the Statute of Limitations Affirmative Defense and Need Not Address the 14 Merits of the Cross-Complaint................................................................. 15 15 B. Cross-Complainants Fail To Establish Each Essential Element Of Their Implicit Legal Malpractice Claim...................................................................................... 16 16 1. Cross-Complainants do not assert they could have achieved a better 17 outcome but for the alleged legal malpractice ......................................... 16 18 2. The alleged violations of the Rules of Professional Conduct are not actionable for damages............................................................................. 17 19 C. Cross-Complainants Fail To Establish Each Essential Element Of Their Cause 20 Of Action For An Accounting ............................................................................. 17 21 D. Cross-Complainants Fail To Establish Each Essential Element Of Their Cause Of Action For Disgorgement Of Fees.................................................................. 18 22 1. “Disgorgement of Fees” is a remedy, not a standalone cause of action .. 18 23 2. Disgorgement is not an available remedy, nor authorized by law ........... 19 24 a. Lendormy cannot be his own runner and capper ......................... 19 25 b. Disgorgement is not an available remedy because Cross- 26 Complainants have not suffered any damages ............................. 20 27 E. Cross-Complainants Fail To Establish Each Essential Element Of Their Cause Of Action For Conversion.................................................................................... 21 28 -2- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 IV. CONCLUSION ................................................................................................................ 22 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 I. INTRODUCTION 2 Pursuant to C.C.P. § 437c, Cross-Defendant attorney Jean-Yves Lendormy (“Lendormy”), and 3 Cross-Defendant law firm Luscutoff, Lendormy & Associates (“LLA”) (collectively “Plaintiffs”1 and 4 “Cross-Defendants”) herein move for summary judgment, or in the alternative, summary adjudication, 5 of all causes of action alleged against them by Cross-Complainants Olivier Auffret (“Auffret”) and 6 Virginie Leclair (“Leclair”) (collectively “Defendants” and “Cross-Complainants”). Each of Cross- 7 Complainants’ causes of action, and their entire First Amended Cross-Complaint (hereinafter “Cross- 8 Complaint”), fail as a matter of law, and should be summarily adjudicated, because (1) California’s one- 9 year statute of limitations to bring a legal malpractice claim under C.C.P. § 340.6 acts as an affirmative 10 defense to the entire Cross-Complaint; and (2) Cross-Complainants cannot establish all essential 11 elements of each of their first cause of action for an accounting, second cause of action for disgorgement 12 of fees, and third cause of action for conversion (collectively “Cross-Claims”). 13 On April 28, 2009, Defendants, French tourists, were seriously injured in a bus accident in 14 Monterey County. They and the majority of the other 31 bus passengers retained Plaintiffs as their 15 attorneys to prosecute personal injury actions against the tour company and other defendants (“bus 16 accident defendants”) on a contingency basis. Throughout nine (9) years of litigation, LLA advanced 17 payments to the Defendants for medical or other expenses2 which, due to an oversight in accounting, led 18 to an accidental overpayment to the Defendants once final settlement funds were disbursed. After 19 Plaintiffs were unsuccessful in obtaining reimbursement of the funds from the Defendants informally, 20 on June 5, 2019, they filed the instant action (i.e., Plaintiffs’ “Fee Claim”). 21 On November 27, 2019, Auffret and Leclair filed retaliatory Cross-Claims seeking principally 22 reimbursement of litigation expenses deducted from their settlement sums which were allegedly not 23 authorized by the legal services agreements; and, due to Cross-Defendants’ alleged ethical violations, 24 all of the attorney’s fees Cross-Defendants earned from Cross-Complainants’ settlements. 25 Notwithstanding the Cross-Complaint’s (deliberate) omission of the term “legal malpractice” in 26 1 Plaintiffs represent themselves in pro per with respect to the fee claims they filed against Defendants on June 5, 2019. 27 2 To avoid their financial hardship resulting from the receipt of local medical care while being uninsured in the U.S. 28 -4- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 their pleadings, the gravamen of the Cross-Claims alleges that Cross-Defendants violated their 2 professional obligations in the provision of legal services. Specifically, all of the Cross-Claims arise 3 from Cross-Complainants’ engagement of Cross-Defendants’ legal services to prosecute personal injury 4 actions on their behalf for injuries they sustained during the 2009 bus accident. 5 Cross-Complainants employ artful pleading in an apparent attempt to circumvent the one-year 6 statute of limitations applicable to their Cross-Claims. However, each of the accounting, disgorgement 7 of fees, and conversion causes of action seek to recover damages on a violation of the same primary 8 right, i.e. to receive professional legal services within the applicable standard of care. Therefore they 9 each fall within the ambit of C.C.P. § 340.6. While not styled as separate causes of action, to support 10 their recovery of damages, Cross-Complainants allege that Cross-Defendants breached contractual 11 obligations and fiduciary duties owed to them by virtue of being their attorneys. Such claims are 12 governed by C.C.P. § 340.6 just the same as actions claiming an attorney made a poor argument or 13 procedural mistake that resulted in an adverse outcome for the client. 14 Cross-Defendants represented the Cross-Complainants in the personal injury actions from 15 approximately May 12, 2009, until Nov 13, 2017, at which time Cross-Defendants wired the last 16 settlement payments to the Cross-Complainants. Cross-Complainants admit, as is also supported by 17 other evidence cited herein, that their attorney-client relationship with Cross-Defendants ended more 18 than one (1) year before the Cross-Complainants filed their cross-action on November 22, 2017.3 In fact, 19 at the time the Cross-Claims were filed, they were already one (1) year outside of the limitations period. 20 Cross-Complainants’ failure to bring their causes of action within the applicable statute of 21 limitations serves as an absolute affirmative defense to their cross-action, and the Court should grant this 22 motion for summary judgment on those grounds alone. The Court need not examine the evidence (or 23 lack thereof) relating to the merits of the Cross-Claims. However, should the Court find that the Cross- 24 Claims are timely, they still fail as a matter of law because Cross-Complainants cannot establish each 25 essential element with evidence. Thus, no triable issues of fact remain. 26 3 Cross-Complainants subsequently filed a First Amended Cross-Complaint on December 11, 2019, which is the operative 27 pleading, but contains identical causes of action. 28 -5- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 (1) Cross-Complainants’ implicit legal malpractice claim fails because (a) Cross-Defendants 2 cannot establish, and do not allege, that Cross-Complainants could have obtained a better result 3 (settlement, judgment, or otherwise) but for Cross-Defendants’ breach of the standard of care; 4 (2) The first cause of action for an accounting fails because the sums Cross-Defendants seek are 5 certain and ascertainable by them without involvement of the Court; 6 (3) The second cause of action for disgorgement of fees fails because (a) the remedy Cross- 7 Complainants seek is not authorized by any statutory or common law, including any authority cited in 8 the pleadings, and (b) because “disgorgement of fees” pleads a remedy but not an indivisible primary 9 right or violation; and 10 (4) The third cause of action for conversion fails because Cross-Complainants did not have a 11 legal right of ownership to the funds deducted for litigation expenses or attorney’s fees; their deduction 12 was lawfully authorized by contract. 13 As demonstrated in further detail herein, the undisputed material facts and legal authority 14 establish that Cross-Defendants are entitled to summary judgment and/or adjudication as a matter of law 15 as to all of the causes of action alleged against them by Cross-Complainants. 16 II. STATEMENT OF UNDISPUTED MATERIAL FACTS 17 Lendormy has been an attorney for the law firm LLA, and a principal of LLA since its inception 18 in 1987. (Undisputed Material Fact (“UMF”) 1.) Since the 1990s, Lendormy has served as one of two 19 appointed legal counsel to the French Consulate General in San Francisco, and the only one whose law 20 firm engaged in personal injury matters in California. (UMF 2.) On April 28, 2009, a tour bus on its way 21 to Monterey, California, with 34 French tourists on board, including Cross-Complainants, got into an 22 accident that killed or injured many passengers, the driver, and tour guide (the “bus accident”). Cross- 23 Complainants were injured in the bus accident. (UMF 3.) On April 28, 2009, a French consular official 24 contacted Lendormy, informing him that a passenger injured in the bus accident sought legal advice, and 25 requesting that Lendormy offer his legal assistance to the other injured passengers as well. Lendormy 26 agreed to this request. (UMF 4.) On April 30, 2009, Lendormy met with the French tourists who had 27 first called the French consulate to request legal assistance at the Regional Medical Center San Jose 28 -6- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 (“RMCSJ”). They requested and did retain Lendormy and LLA as their attorneys. (UMF 5.) Over the 2 next couple of days, Lendormy met with victims of the bus accident who had already become clients, 3 and others at their request for legal consultation, and became their attorney. (UMF 6.) 4 During a subsequent visit to the RMCSJ, Lendormy introduced himself to Auffret as an attorney 5 for the French consulate, and asked basic questions about Auffret’s condition. (UMF 7.) A close relative 6 of Auffret and Leclair arranged for a meeting with Lendormy and Auffret at RMCSJ on May 3, 2009 to 7 discuss their legal options in connection with the bus accident and expressed interest in retaining Cross- 8 Defendants at their attorneys. (UMF 8.) On or about May 7, 2009, Auffret signed a legal services 9 agreement to retain Cross-Defendants as his attorneys. (UMF 9.) After Auffret signed a legal services 10 agreement to retain Cross-Defendants, Auffret introduced Lendormy to Leclair and told her that 11 Lendormy would provide them with legal assistance. (UMF 10.) The next time Lendormy returned to 12 RMCSJ, Auffret handed him Leclair’s executed legal services agreement. (UMF 11.) Cross- 13 Complainants’ legal services agreements with LLA provided for a one third (33.3%) contingency fee 14 from Cross-Complainants’ recovery in their personal injury actions, less advanced litigation costs and 15 expenses. (UMF 12.) Cross-Complainants never informed Lendormy that they were not interested in 16 meeting with or retaining Cross-Defendants as their attorneys. (UMF 13.) Ultimately all 34 French 17 tourists who were passengers in the bus accident, or their heirs and relatives, retained Cross-Defendants 18 to prosecute their claims against the bus accident defendants. (UMF 14.) 19 On June 22, 2009, Cross-Defendants filed a complaint on behalf of Cross-Complainants and 20 other bus accident victims in the Superior Court of California, Monterey County, bearing case number 21 M99601 (California litigation). (UMF 15.) Cross-Defendants litigated the personal injury actions for 22 eight (8) years, during which time the case took complicated procedural turns, including removal to 23 France where Cross-Complainants were also sued by the bus accident defendants, and appeals in France 24 and California. (UMF 16.) Cross-Defendants hired attorneys in France (“French attorneys”) to defend a 25 lawsuit filed by the principal bus accident defendant against all plaintiffs in Paris, including Cross- 26 Complainants. The litigation in France lasted seven (7) years. (UMF 17.) Cross-Defendants advanced 27 the costs of the French attorneys, which pursuant to the legal services agreements, were to be paid by 28 -7- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 Cross-Complainants only in case of a recovery in their personal injury actions. (UMF 18.) 2 Judges of the California Superior Court ordered the California litigation to mediation on three 3 (3) separate occasion – twice in 2011 and once in 2017. (UMF 19.) Proposed settlements resulting from 4 the mediations were all approved by judges as made in good faith. (UMF 20.) Cross-Defendants kept 5 Cross-Complainants informed about the mediation process, their ability to participate, and the mediator’s 6 determination of their allocated percentage share of the settlements with each bus accident defendant. 7 (UMF 21.) Cross-Defendants set up a website to communicate with clients regularly regarding case 8 updates, including with Cross-Complainants. Each client had a separate account log-in and password to 9 access the information. (UMF 22.) Cross-Complainants executed releases to settle their cases with the 10 various bus accident defendants on three (3) occasions – March 7, 2011, April 21, 2011, and the last one 11 on June 18, 2017. (UMF 23.) Each of the settlement agreements that Cross-Complainants executed with 12 the bus accident defendants conditioned the agreement on the execution of identical releases by all other 13 bus accident plaintiffs. (UMF 24.) On October 25, 2017, Cross-Defendants received the final settlement 14 payment from the remaining bus accident defendants. (UMF 25.) On October 26, 2017, Cross- 15 Defendants made a partial payment of settlement proceeds to Cross-Complainants while Cross- 16 Defendants negotiated payment of liens RMCSJ had placed on the settlements. (UMF 26.) On October 17 26, 2017, Lendormy filed a request for dismissal with prejudice as to the entire action. (UMF 27.) On 18 June 29, 2017, Cross-Defendants communicated with Cross-Complainants regarding the disposition of 19 their client files for the entire 8-year litigation in California. (UMF 28.) On July 17, 2017, Cross- 20 Defendants emailed all of the personal injury plaintiffs to inform them that final payment would follow 21 on November 1, 2017. (UMF 29.) On July 17, 2017, Cross-Defendants also informed all of the personal 22 injury plaintiffs, including Cross-Complainants, that the fees paid to French experts and attorneys for 23 litigation conducted there, would be deducted from their recovery as litigation costs. Leclair expressed 24 her discontent with the deduction of the cost of French attorneys from her recovery. (UMF 30.) Lastly, 25 Lendormy also advised Cross-Complainants that the email and the corresponding settlement payments 26 concluded Cross-Defendants’ representation of them to obtain personal injury damages from the bus 27 accident defendants. (UMF 31.) 28 -8- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 On November 3, 2017, Lendormy informed Cross-Complainants that Cross-Defendants received 2 the last payment from Capitales Tours, one of the last settling bus accident defendants. (UMF 32.) On 3 November 13, 2017, Cross-Defendants wired to Auffret and Leclair the last disbursement of funds from 4 their client trust accounts. (UMF 33.) After November 2017, Cross-Defendants no longer communicated 5 with Auffret and Leclair about the personal injury actions, until about February 16, 2019, when 6 Lendormy contacted them regarding an accounting error that led to an accidental overpayment to Cross- 7 Complainants. (UMF 34.) During pre-litigation discussions, including in or around March 2019, Cross- 8 Defendants provided a full accounting to Cross-Complainants and their counsel of their recoveries and 9 deductions for costs and attorney’s fees in the personal injury actions. (UMF 35.) The attorney-client 10 relationship between Cross-Complainants and Cross-Defendants ended at the very latest with the last 11 client trust account payment Cross-Complainants received from Cross-Defendants, on or around 12 November 14, 2017. (UMF 36.) Cross-Complainants never made efforts to determine the adequacy of 13 any costs deducted from their recoveries in the personal injury actions, until they demanded an 14 accounting in or after February 2019. (UMF 37.) Cross-Defendants made no mistake in prosecuting 15 Cross-Complainants’ claims in their personal injury actions that in any way negatively affected or 16 lowered the gross amount of their recoveries. (UMF 38.) 17 III. LEGAL ARGUMENT 18 A. The Entire Cross-Complaint and Each Cause of Action is Time-barred by the Legal Malpractice Statute of Limitations, C.C.P. § 340.6 19 1. The Gravamen of Cross-Complainants’ Causes of Action Pleads Legal 20 Malpractice, Thus C.C.P. § 340.6’s Statute of Limitations Provisions Apply 21 “To determine which statute of limitations governs a given cause of action, we must first 22 ‘identify the nature of the cause of action, i.e., the “gravamen” of the cause of action.’ The nature of 23 the cause of action and the primary right involved, not the form or label of the cause of action or the 24 relief demanded, determine which statute of limitations applies.” (Austin v. Medicis (2018) 21 25 Cal.App.5th 577, 585.) The C.C.P. § 340.6(a) limitations period applies to claims that “necessarily 26 depend on proof that an attorney violated a professional obligation in the course of providing 27 professional services unless the claim is for actual fraud.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 28 -9- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 1239.) C.C.P. § 340.6(a) governs all causes of action against an attorney by their client arising from the 2 performance of services for which the attorney was retained, including incidental obligations. This is 3 true whether the theory of liability is based on the breach of an oral or written contract, a tort, or a 4 breach of a fiduciary duty. (See, e.g., Levin v. Graham & James (1995) 37 Cal.App.4th 798, 805; 5 Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 68; Stoll v. Superior Court (1992) 9 Cal.App.4th 6 1362, 1366–1369.) 7 “[T]he pleadings delimit the scope of the issues on summary judgment” (Slovensky v. Friedman 8 (2006) 142 Cal.App.4th 1518, 1535). The “gravamen,” or essence, of the Cross-Complaint alleges that 9 Cross-Defendants violated professional obligations in the course of representing Cross-Complainants 10 to prosecute personal injury actions against the bus accident defendants. The First Amended Cross- 11 Complaint alleges, for example, that Cross-Defendants “in breach of their fiduciary duties to Cross- 12 Complainants unilaterally…deducted from settlement amounts owed to [Cross- 13 Complainants]…expenses which…were…not authorized by any written legal services agreements 14 between the parties…and which were…excessive.” (Index of Evid., Ex. 9, ¶7.) Violations of 15 contractual obligations owed to the client are governed by C.C.P. § 340.6 just as the alleged breaches 16 of fiduciary duty. “In the context of a legal malpractice claim, the statute of limitations on a cause of 17 action for breach of contract is governed by C.C.P. Section 340.6 and not C.C.P. Section 337.” (See 18 Bird Marella Boxer & Wolpert v. Superior Court (2003) 106 Cal.App.4th 419, 430.) 19 Cross-Complainants claim conversion in that Cross-Defendants’ breaches of fiduciary duty and 20 ethical duties owed under Business and Professions Code §§ 6151-6154, and former California Rules 21 of Professional Conduct 1-400 (prohibition against solicitation) and 3-310 (failure to disclose potential 22 conflicts of interest)4 (Index of Evid., Ex. 9, ¶¶13-14), turned Cross-Defendants’ deductions of 23 litigation costs and attorney’s fees into a wrongful taking. (Index of Evid., Ex. 9, ¶¶20-22.) The cause 24 of action for disgorgement of fees – in actuality a remedy, and not a standalone cause of action – is 25 based on the same alleged ethics violations. The Rules of Professional Conduct Cross-Complainants 26 4 As of the filing date of the Cross-Complaint, these were no longer the operative California Rules of Professional Conduct. 27 The current version of these rules have differing requirements. 28 - 10 - MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 claim to have been violated by Cross-Defendants, and others as Cross-Complainants may argue, 2 constitute a “professional obligation” within the meaning of C.C.P. § 340.6 (Lee v. Hanley (2015) 61 3 Cal.4th 1225, 1237), so that each of the Cross-Claims, which depend on proof of these violations, are 4 governed by C.C.P. § 340.6’s statute of limitations. 5 On its face the Cross-Complaint alleges claims that “necessarily depend on proof that an 6 attorney violated a professional obligation in the course of providing professional services.” (Lee v. 7 Hanley (2015) 61 Cal.4th 1225, 1239.) In Lee v. Hanley, as here, the plaintiff similarly tried to plead 8 around the statute of limitations bar by styling breaches of fiduciary duties as conversion, without 9 success. “If the facts stated in the complaint show that the basis for the plaintiff's conversion claim is 10 that an attorney provided deficient legal services, then the plaintiff's claim will depend on proof that 11 the attorney violated a professional obligation in the course of providing professional services and will 12 thus be time-barred.” (Id.)5 13 “Professional services,” and the obligations arising therefrom that fall within the ambit of 14 C.C.P. § 340.6, are more encompassing than traditionally legal tasks such as drafting pleadings, taking 15 depositions, arguing in court, etc. C.C.P. § 340.6(a) also covers “nonlegal services governed by an 16 attorney's professional obligations,” which includes, e.g., “nonlegal professional services such as 17 accounting, bookkeeping, and holding property in trust” that lawyers are required to provide as part of 18 the attorney-client relationship. (Lee v. Hanley (2015) 61 Cal.4th 1225, 1237, 1240 [citing to CRPC 4- 19 100 and other CRPC as evidence that legislature intended C.C.P. § 340.6 to apply to “professional 20 obligations that go beyond duties of competence” and include nonlegal services].) 21 Here, Cross-Defendants’ “professional services” within the meaning of C.C.P. § 340.6, in 22 addition to prosecuting personal injury actions as contracted, included incidental obligations like the 23 proper management of their client trust funds, advancement and payment of litigation costs, and other 24 25 26 5 While the Court ultimately allowed leave to amend the complaint in Lee v. Hanley for the plaintiff to attempt to plead a basis for conversion not precluded by C.C.P. § 340.6, the Court noted that “Section 340.6(a) applies as soon as discovery 27 makes clear that the claim's underlying basis consists of evidence that the attorney provided deficient professional services.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1238.) 28 - 11 - MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 nonlegal services Cross-Complainants contend Cross-Defendants performed poorly in violation of 2 their professional obligations, whether contractual, ethical, statutory, or at common law. 3 2. Even Under the Most Generous Interpretation of C.C.P. § 340.6’s Statute of Limitations Provisions, the Cross-Complaint is Untimely and Legally Barred 4 5 C.C.P. § 340.6(a) provides in relevant part: … an action against an attorney for a wrongful act or omission, other than 6 for actual fraud, arising in the performance of professional services shall 7 be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting 8 the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. 9 Based on its plain language, the one-year statute of limitations set forth in section 340.6 applies 10 to all actions, except those for actual fraud, brought against an attorney “for a wrongful act or omission” 11 which arises “in the performance of professional services.” Cross-Complainants have not alleged actual 12 fraud in this action. 13 a. Cross-Complainants had notice of the alleged legal malpractice many years 14 in advance of filing their Cross-Claims 15 The one-year limitations period commences when the client discovers or should have discovered 16 the facts essential to the malpractice claim. (Beal Bank, SSB v. Arter & Hadden, LLP (2007) 42 Cal.4th 17 503, 511.) Discovery of attorney malpractice occurs when the aggrieved client knows or should have 18 known the material facts constituting the attorney’s wrongful act or omission. (Neel v. Magana, Olney, 19 Levy, Cathcart & Gelfand, supra, 6 Cal.3d 176, 190.) “‘[P]laintiffs are required to conduct a reasonable 20 investigation after becoming aware of an injury, and are charged with knowledge of the information that 21 would have been revealed by such an investigation. So long as there is a reasonable ground for suspicion, 22 the plaintiff must go out and find the facts; she cannot wait for the facts to find her.” (Slovensky v. 23 Friedman (2006) 142 Cal.App.4th 1518, 1529.) 24 A plaintiff need not be aware of each and every fact or factual allegation of wrongdoing before 25 he or she is deemed to have discovered malpractice, she must merely have a suspicion of being illegally 26 wronged. (Jolly v. Eli Lilly (1988) 44 Cal.3d 1103, 1111.) In assessing allegations of delayed discovery, 27 28 - 12 - MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 the court places the burden on plaintiff to allege and establish facts showing diligence; conclusory 2 allegations are insufficient. (Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 638 (emphasis 3 added).) “Once the plaintiff suffers actual harm, neither difficulty in proving damages nor uncertainty as 4 to their amount tolls the limitations period.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & 5 Harrison (1998) 18 Cal.4th 739, 752.) 6 Here, Cross-Complainants had ample notice of the damages they allegedly incurred as a result 7 of malpractice. They knew Cross-Defendants retained contract attorneys in France and advanced their 8 fees on Cross-Complainants behalf for seven (7) years (UMF 17), Cross-Complainants were informed 9 about the percentage of the global settlements allocated to them by mediators (UMF 21-22), they knew 10 that their settlements were contingent on all other plaintiffs also signing identical releases with the bus 11 accident defendants (UMF 23-24), and on July 17, 2017, Lendormy informed Cross-Complainants in 12 writing that the cost of attorneys retained in France would be deducted from their recoveries in the 13 personal injury actions. (UMF 30.) Leclair even expressed her discontent with the deduction for fees 14 spent on attorneys hired in France, and claiming the deduction was not known to her before, yet Cross- 15 Complainants did not raise the issue again. (UMF 30.) At that point, Cross-Complainants were on inquiry 16 notice to investigate the facts constituting potential malpractice – i.e. the unauthorized cost deductions. 17 Cross-Complainants admit that they made no efforts to ascertain whether any cost deductions 18 made by Cross-Defendants were improper, until after Plaintiffs first contacted Cross-Complainants 19 regarding the accidental overpayment in or after February 2019. (UMF 37.) Thus, the latest Cross- 20 Complainants were put on notice to investigate the facts constituting alleged malpractice was on July 21 17, 2017. 22 b. Even under C.C.P. § 340.6’s generous tolling provision, the Cross- Complaint was untimely 23 C.C.P. § 340.6’s one-year statute of limitations governs legal malpractice claims, unless the 24 plaintiff can establish that one of the statutory tolling provisions should apply. (Beal Bank, SSB v. Arter 25 & Hadden, LLP (2007) 42 Cal.4th 503, 508.) “[T]he tolling provisions contained in section 340.6 are 26 exclusive […] the Legislature expressed an intent to disallow tolling under any other circumstances.” 27 28 - 13 - MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS-DEFENDANTS LUSCUTOFF, LENDORMY & ASSOCIATES AND JEAN-YVES LENDORMY'S MOTION FOR SUMMARY JUDGMENT TO FIRST AMENDED CROSS-COMPLAINT 1 (Gordon v. Law Offices of Aguirre & Meyer (1999) 70 Cal.App.4th 972, 980.) Thus, Cross-Complainants 2 are precluded from asserting equitable tolling to overcome the statute of limitations defense. 3 Of C.C.P. § 340.6’s tolling provisions, the only one applicable to this action is subdivision (a)(2): 4 “the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged 5 wrongful act or omission occurred.” For purposes of the continuing representation rule, representation 6 ends when the client has no objectively reasonable expectation that the attorney will provide further legal 7 services. (Lockton v. O'Rourke (2010) 184 Cal.App.4th 1051, 1063.) “[T]he attorney's representation is 8 concluded as to the specific subject matter when the parties agree, and does not depend on a formal 9 ter