Preview
JOSHUA P. FRIEDMAN AND ASSOCIATES, INC.
1 JOSHUA P. FRIEDMAN, ESQ., S.B. #216261
23679 CALABASAS ROAD #377
2 CALABASAS, CA 91302
PHONE (310) 278-8600
3 FACSIMILE (310) 388-5421 1/29/2021
4 KAUFMAN DOLOWICH & VOLUCK LLP
Andrew J. Waxler, SBN. 113682
5 Email: awaxler@kdvlaw.com
11755 Wilshire Blvd., Ste. 2400
6 Los Angeles, California 90025
Telephone: (310) 775-6511
7 Facsimile: (310) 575-9720
8 Attorneys for Cross-Defendants,
Fenton Law Group, LLP and Henry R. Fenton
9
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA
11
BUTTE COUNTY, NORTH BUTTE COUNTY COURTHOUSE
12
Fenton Law Group, LLP, et al., ) Case No.: 20CV01537
13 )
) CROSS-DEFENDANTS’ REPLY TO
Plaintiff, )
14 OPPOSITION TO DEMURRER TO THE
) CROSS-COMPLAINT
vs. )
15
)
) DATE: 2-5-21
16 Doug Benson, M.D.., et al., ) TIME: 1:30 p.m.
)
17 Defendants. )
)
18 )
)
19 )
)
20 )
21 TO THE HONORABLE COURT, ALL PARTIES AND THEIR COUNSEL OF
22 RECORD:
23 Cross-Defendants Fenton Law Group, LLP and Henry R. Fenton (“Cross-Defendants”)
24 submit the following Memorandum of Points and Authorities in Reply to the Opposition filed by
25 Cross-Complainant Douglas Benson, M.D. (“Cross-Complainant”) to Cross-Defendants’
26 Demurrer to the Cross-Complaint as follows:
27
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-i-
1 REPLY MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 The cross-complaint at issue in this demurrer represents an attempt by defendant and
4 cross-complainant DOUG BENSON, M.D. (“Benson”) to recast his malpractice claims against
5 cross-defendants that were already dismissed once based on the statute of limitations. When
6 Benson previously filed a complaint in July 2019 asserting the same malpractice and breach of
7 fiduciary duty claims against cross-defendants (Request for Judicial Notice (“RJN”), Exhibit
8 “A”), cross-defendants’ counsel of record wrote correspondence to Benson demanding the
9 complaint be dismissed as all claims were barred by the one-year statute of limitations in Code of
10 Civil Procedure § 340.6 inasmuch as they arose out of the unfavorable arbitration award issued
11 in July 2017. (Exhibit “C” to Declaration of Nicholas Jurkowitz.) After reviewing his case,
12 Benson agreed and dismissed his lawsuit. (RJN, Exhibit “B”.)
13 After being sued by his former attorneys in this action for unpaid fees, Benson now files
14 the subject cross-complaint that asserts the same claims based on the same facts. Benson’s
15 counsel who also filed the complaint in the July 2019 lawsuit is no doubt cognizant of the prior
16 dismissal based on section 340.6 as he added a purported cause of action for fraud this time
17 around. However, this mere label pinned by the pleader should not distract the court. As with
18 his prior lawsuit, all of Benson’s claims in the cross-complaint arise out of allegations that cross-
19 defendants negligently handled the underlying arbitration that resulted in an unfavorable award
20 against Benson in July 2017. (Cross-Complaint, ¶ 35.) Such claims are indisputably barred by
21 the one-year statute of limitations found in Code of Civil Procedure § 340.6 and are subject to
22 demurrer.
23 ///
24 ///
25 ///
26
27
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-2-
1 II. ARGUMENT
2 A. THE ONE-YEAR STATUTE OF LIMITATIONS IN CODE OF CIVIL
3 PROCEDURE § 340.6 BARS ALL CAUSES OF ACTION IN THE CROSS-
4 COMPLAINT AS THEY ARISE OUT OF ALLEGED MALPRACTICE
5 Benson in opposition artfully but misguidedly contends that certain causes of action are
6 not barred by the one-year statute of limitations in Code of Civil Procedure § 340.6 because they
7 arise out of “nonlegal services” that do not involve the fiduciary or professional obligations of an
8 attorney. The opposition relies on Lee v. Hanley (2015) 61 Cal.4th 1225, 1239, which made
9 clear that with the exception of claims of actual fraud, section 340.6 applies to all claims that
10 necessarily depend on proof that an attorney violated a professional obligation in the course of
11 providing professional services, no matter how the claims are styled. Although Lee reversed the
12 demurrer to a conversion cause of action, the Court found that the plaintiff’s claim “does not
13 necessarily depend on proof that [defendant] violated a professional obligation.” (Id. at 1240.)
14 In contrast, Benson’s cause of action for conversion is based entirely on proof that cross-
15 defendants violated a professional obligation, i.e., Rule 3-700(D) of the Professional Rules of
16 Conduct. (Cross-Complaint, ¶¶ 66-76.) The other causes of action that Benson contends fall
17 outside the scope of section 340.6 – unfair business practices, accounting, estoppel, breach of
18 fiduciary duty and breach of contract – similarly arise out of cross-defendant’s fiduciary or
19 professional obligations and are likewise barred no matter the label placed on them.
20 The case of Foxen v. Carpenter (2016) 6 Cal.App.5th 284, is particularly instructive here.
21 Plaintiff Christine Foxen allegedly sustained injuries in an auto accident and hired the defendant
22 attorneys to sue the other driver. (Id. at 288.) She signed a retainer agreement, which provided
23 the defendants would be entitled to 40% of the gross recovery and that the defendants were
24
authorized to deposit the proceeds into their client trust account and distribute them in
25
accordance with the agreement. (Id.) Plaintiff’s claims and her husband’s loss of consortium
26
claim were jointly settled for a combined amount of $3,000,000, and settlement checks were
27
tendered to the defendant attorneys. Thereafter, the defendants did not submit “any kind of
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-3-
1 accounting” and on March 2, 2011 “wrongfully paid” themselves from the settlement funds. (Id.
2 at 289.) The attorneys also “wrongfully” charged plaintiff approximately $934,000 in litigation
3 costs, and many of the charges were fraudulent or improper. (Id.) Plaintiff learned of the false
4 charges in December 2011.
5 More than a year later, she sued the former attorneys alleging ten causes of action
6 including declaratory relief, breach of fiduciary duty, breach of contract, unfair and deceptive
7 business practices and conversion. (Id. at 287.) The trial court sustained the defendants’
8 demurrer on statute of limitations grounds. (Id. at 287.) The court of appeal affirmed the trial
9 court’s judgment and found that all of plaintiff’s claims were barred by the one-year statute of
10 limitations set forth in section 340.6. (Id. at 290-297.) It explained:
11
Plaintiff alleges she discovered the false charges that form the basis of
12 her claims no later than December 2011, and therefore she was on notice
at that time that defendants had wrongfully withheld funds from her. Her
13
failure to file this action within one year after that discovery is fatal to
14 her claims.
(Foxen at 292.)
15
To be certain, courts broadly apply the one-year limitation period in section 340.6 when
16
the gravamen of a claim is legal malpractice. Benson cannot avoid its application by masking his
17
claims otherwise. “In all cases other than actual fraud, whether the theory of liability is based on
18
the breach of an oral or written contract, a tort, or a breach of fiduciary duty, the [section 340.6]
19
statutory period applies.” (Levin v. Graham & James (1995) 37 Cal.App.4th 798, 805; see also
20
Quintillani v. Mannerino (1998) 62 Cal.App.4th 54, 68 [applying section 340.6 to a cause of
21
action for breach of fiduciary duty]; Southland Mechanical Constructors Corp. v. Nixen (1981)
22
119 Cal.App.3d 417 [disapproved on other grounds in Laird v. Blackner (1992) 2 Cal.4th 606]
23
[applying section 340.6 to a cause of action for breach of contract]; Stoll v. Super. Ct. (1992) 9
24
Cal.App.4th 1362, 1363-1364 [applying section 340.6 to breach of a fiduciary duty claim against
25
attorney].)
26
27
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-4-
1 Permeating each cause of action in the cross-complaint is the allegation that Benson
2 contends he suffered actual injury on July 7, 2017, when the arbitration award was issued,
3 allegedly due to cross-defendants’ malpractice. (Cross-Complaint, ¶ 35.) The cross-complaint
4 also alleges that “[b]y this point Dr. Benson was devastated and justly had little confidence” in
5 cross-defendants. (Cross-Complaint, ¶ 35.) While Benson may put different labels on his claims,
6 it is indisputable that on July 7, 2017 he suffered his actual injury for purposes of section 340.6.
7 (See Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 743
8 [“actual injury” occurs for purposes of the statute of limitations “when the client suffers any loss
9 or injury legally cognizable as damages…”.) Benson does not dispute this in opposition, and the
10 failure to do so is fatal. On this basis, cross-defendants’ demurrer must be granted in its entirety.
11 B. THE FRAUD CAUSE OF ACTION IS ALSO SUBJECT TO § 340.6, AND
12 REGARDLESS, WOULD ALSO BE BARRED BY THE THREE-YEAR
13 STATUTE OF LIMITATIONS FOUND IN CODE OF CIVIL
14 PROCEDURE § 338
15 While claims for actual fraud are excepted from section 340.6, case law interpreting the
16 statute makes clear that every allegation of fraud will not fall outside its scope. (Radovich v.
17 Locke-Paddon (1995) 35 Cal.App.4th 946, 979 [holding bare allegation that lawyer acted
18 fraudulently without any supporting facts is not enough to trigger the actual fraud exception to
19 the one-year statute of limitations in section 340.6].) In Quintilliani v. Mannerino (1998) 62
20 Cal.App.4th 54, 69, the court of appeal held that anything amounting to constructive fraud is still
21
subject to the one-year limitation period in section 340.6. “Constructive fraud may result from a
22
breach of fiduciary duty, regardless of intent or motive, and the Legislature intended only to
except instances of actual fraud on grounds that acts of actual fraud should not be treated as legal
23
malpractice.” (Id. [quoting Stoll v. Superior Court (1992) 9 Cal.App.4th 1362, 1368].) In Stoll,
24
the court clarified that the Legislature intended the fraud exception in section 340.6 to exclude
25
only “wrongs committed when the defendant was not acting as an attorney.” (Stoll, 9
26
Cal.App.4th at 1368.)
27
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-5-
1 Benson’s cause of action for fraud in the cross-complaint is nothing more than a
2 malpractice and breach of fiduciary duty claim deviously pled to avoid the statute of limitations
3 without any factual support. Benson specifically relies on the allegation that Fenton “as a
4 licensed attorney, had a fiduciary relationship with Dr. Benson, which imposed a duty to disclose
5 facts.” (Cross-Complaint, ¶ 94.) The cross-complaint in this regard is notably devoid of factual
6 allegations supporting fraud. Benson merely uses the same allegation supporting his malpractice
7
and fiduciary duty claims – that Fenton was unable to “make him millions” – and argues that this
8
also constitutes fraud. No matter how it is pled, this is precisely the sort of constructive fraud
that the courts recognized in Quintilliani and Stoll. Accordingly, Benson’s fraud cause of action
9
is still subject to section 340.6 and is barred by the statute of limitations.
10
Regardless, should this Court invoke the three-year statute of limitations in Code of Civil
11
Procedure section 338 applied to fraud claims, Benson’s cause of action is still barred. Benson
12
seemingly relies on two different “statements” to support his claim. First, that cross-defendants
13
represented they would get Benson “millions of dollars.” (Cross-Complaint, ¶ 88.) The cross-
14
complaint plainly alleges that this “statement” was made in January 2017. (Cross-Complaint, ¶
15
20.) As a result, a fraud claim relying on this statement would still be barred by the three-year
16
statute of limitations.
17
Second, Benson relies on the “statement” that cross-defendants represented they would
18
not charge him for fees after May 24, 2017. (Cross-Complaint, ¶ 88.) Assuming a fraud cause of
19
action based on this “statement” can satisfy the other necessary elements, which it cannot,
20
Benson’s claim fails because he has not actually paid the bills he contends he would not be
21
charged for. In other words, Benson cannot rely on this “statement” to support his fraud claim
22
because he has not suffered the actual damages. (Alliance Mortgate Co. v. Rothwell (1995) 10
23
Cal.4th 1226.)
24 In sum, Benson’s cause of action is barred by law no matter what statute of limitations
25 this Court chooses to apply. Similar to the other causes of action in the cross-complaint, the
26 fraud claim must be dismissed without leave to amend.
27
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-6-
1 C. CROSS-COMPLAINANT’S CONTENTION THAT THE STATUTE OF
2 LIMITATIONS WAS TOLLED BASED ON THE DELAYED DISCOVERY
3 DOCTRINE IS MERITLESS
4 Benson also opposes this demurrer on the grounds that the statute of limitations was
5 tolled pursuant to the delayed discovery doctrine. The delayed discovery doctrine, or the
6 “discovery rule,” only delays accrual “until the plaintiff has, or should have, inquiry notice of the
7 cause of action …. In other words, plaintiffs are required to conduct a reasonable investigation
8 after becoming aware of an injury, and are charged with knowledge of the information that
9 would have been revealed by such an investigation.” (Fox v. Ethicon Endo-Surgery, Inc. (2005)
10 35 Cal.4th 797, 807-808.) A “plaintiff whose complaint shows on its face that his claim would
11 be barred without the benefit of the discovery rule must specifically plead facts to show (1) the
12 time and manner of discovery and (2) the inability to have made earlier discovery despite
13 reasonable diligence.” (Id. at 808.)
14 Benson’s only support for this position aside from reciting black letter law is the assertion
15 that he still does not have all of his “property” from cross-defendants to know what other actions
16 and general business matters it has violated. At the outset, it is significant that Benson does not
17 allege in the cross-complaint an inability to have made earlier discovery despite reasonable
18 diligence. His attorney only writes this contention in the opposition papers, which does not
19 support the sufficiency of the cross-complaint.
20 Substantively, the position itself is meritless. Benson expressly alleges in the cross-
21 complaint that he discovered cross-defendants’ wrongs in July 2017 when the arbitration award
22 was issued. (Cross-Complaint, ¶ 35.) The cross-complaint also alleges that “[b]y this point Dr.
23 Benson was devastated and justly had little confidence” in cross-defendants. (Cross-Complaint, ¶
24 35.) Benson cannot plead around the fact that he had inquiry notice of the claims against cross-
25 defendants as of July 2017 and simply sat on his hands for years. Any contention that Benson
26 could not discover cross-defendants’ wrongdoing because he did not have all of his “property”
27 must be summarily rejected.
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-7-
1 As a result, the cross-complaint does not contain sufficient allegations for the Court to
2 grant Benson the benefit of the tolling provisions due to the delayed discovery doctrine. On this
3 basis, the demurrer must also be granted in its entirety.
4 III. CONCLUSION
5 Based on the foregoing and the matters raised in Cross-Defendants’ moving papers,
6 Cross-Defendants respectfully request that this Court sustain the Demurrer to the Cross-
7 Complaint without leave to amend.
8
Dated: January 29, 2021 JOSHUA P. FRIEDMAN AND ASSOCIATES,
9
INC.
10
11 By: ______________________________________
JOSHUA P. FRIEDMAN
12 Attorneys for Cross-Defendants
13
FENTON LAW GROUP, LLP and HENRY R.
FENTON
14
15 Dated: January 29, 2021 KAUFMAN DOLOWICH & VOLUCK LLP
16
17 By: ______________________________________
ANDREW J. WAXLER
18 Attorneys for Cross-Defendants
FENTON LAW GROUP, LLP and HENRY R.
19
FENTON
20 4816-3095-3434, v. 4
21
22
23
24
25
26
27
28
CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT
-8-
Preview
JOSHUA P. FRIEDMAN AND ASSOCIATES, INC. 1 JOSHUA P. FRIEDMAN, ESQ., S.B. #216261 23679 CALABASAS ROAD #377 2 CALABASAS, CA 91302 PHONE (310) 278-8600 3 FACSIMILE (310) 388-5421 1/29/2021 4 KAUFMAN DOLOWICH & VOLUCK LLP Andrew J. Waxler, SBN. 113682 5 Email: awaxler@kdvlaw.com 11755 Wilshire Blvd., Ste. 2400 6 Los Angeles, California 90025 Telephone: (310) 775-6511 7 Facsimile: (310) 575-9720 8 Attorneys for Cross-Defendants, Fenton Law Group, LLP and Henry R. Fenton 9 10 SUPERIOR COURT OF THE STATE OF CALIFORNIA 11 BUTTE COUNTY, NORTH BUTTE COUNTY COURTHOUSE 12 Fenton Law Group, LLP, et al., ) Case No.: 20CV01537 13 ) ) CROSS-DEFENDANTS’ REPLY TO Plaintiff, ) 14 OPPOSITION TO DEMURRER TO THE ) CROSS-COMPLAINT vs. ) 15 ) ) DATE: 2-5-21 16 Doug Benson, M.D.., et al., ) TIME: 1:30 p.m. ) 17 Defendants. ) ) 18 ) ) 19 ) ) 20 ) 21 TO THE HONORABLE COURT, ALL PARTIES AND THEIR COUNSEL OF 22 RECORD: 23 Cross-Defendants Fenton Law Group, LLP and Henry R. Fenton (“Cross-Defendants”) 24 submit the following Memorandum of Points and Authorities in Reply to the Opposition filed by 25 Cross-Complainant Douglas Benson, M.D. (“Cross-Complainant”) to Cross-Defendants’ 26 Demurrer to the Cross-Complaint as follows: 27 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -i- 1 REPLY MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 The cross-complaint at issue in this demurrer represents an attempt by defendant and 4 cross-complainant DOUG BENSON, M.D. (“Benson”) to recast his malpractice claims against 5 cross-defendants that were already dismissed once based on the statute of limitations. When 6 Benson previously filed a complaint in July 2019 asserting the same malpractice and breach of 7 fiduciary duty claims against cross-defendants (Request for Judicial Notice (“RJN”), Exhibit 8 “A”), cross-defendants’ counsel of record wrote correspondence to Benson demanding the 9 complaint be dismissed as all claims were barred by the one-year statute of limitations in Code of 10 Civil Procedure § 340.6 inasmuch as they arose out of the unfavorable arbitration award issued 11 in July 2017. (Exhibit “C” to Declaration of Nicholas Jurkowitz.) After reviewing his case, 12 Benson agreed and dismissed his lawsuit. (RJN, Exhibit “B”.) 13 After being sued by his former attorneys in this action for unpaid fees, Benson now files 14 the subject cross-complaint that asserts the same claims based on the same facts. Benson’s 15 counsel who also filed the complaint in the July 2019 lawsuit is no doubt cognizant of the prior 16 dismissal based on section 340.6 as he added a purported cause of action for fraud this time 17 around. However, this mere label pinned by the pleader should not distract the court. As with 18 his prior lawsuit, all of Benson’s claims in the cross-complaint arise out of allegations that cross- 19 defendants negligently handled the underlying arbitration that resulted in an unfavorable award 20 against Benson in July 2017. (Cross-Complaint, ¶ 35.) Such claims are indisputably barred by 21 the one-year statute of limitations found in Code of Civil Procedure § 340.6 and are subject to 22 demurrer. 23 /// 24 /// 25 /// 26 27 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -2- 1 II. ARGUMENT 2 A. THE ONE-YEAR STATUTE OF LIMITATIONS IN CODE OF CIVIL 3 PROCEDURE § 340.6 BARS ALL CAUSES OF ACTION IN THE CROSS- 4 COMPLAINT AS THEY ARISE OUT OF ALLEGED MALPRACTICE 5 Benson in opposition artfully but misguidedly contends that certain causes of action are 6 not barred by the one-year statute of limitations in Code of Civil Procedure § 340.6 because they 7 arise out of “nonlegal services” that do not involve the fiduciary or professional obligations of an 8 attorney. The opposition relies on Lee v. Hanley (2015) 61 Cal.4th 1225, 1239, which made 9 clear that with the exception of claims of actual fraud, section 340.6 applies to all claims that 10 necessarily depend on proof that an attorney violated a professional obligation in the course of 11 providing professional services, no matter how the claims are styled. Although Lee reversed the 12 demurrer to a conversion cause of action, the Court found that the plaintiff’s claim “does not 13 necessarily depend on proof that [defendant] violated a professional obligation.” (Id. at 1240.) 14 In contrast, Benson’s cause of action for conversion is based entirely on proof that cross- 15 defendants violated a professional obligation, i.e., Rule 3-700(D) of the Professional Rules of 16 Conduct. (Cross-Complaint, ¶¶ 66-76.) The other causes of action that Benson contends fall 17 outside the scope of section 340.6 – unfair business practices, accounting, estoppel, breach of 18 fiduciary duty and breach of contract – similarly arise out of cross-defendant’s fiduciary or 19 professional obligations and are likewise barred no matter the label placed on them. 20 The case of Foxen v. Carpenter (2016) 6 Cal.App.5th 284, is particularly instructive here. 21 Plaintiff Christine Foxen allegedly sustained injuries in an auto accident and hired the defendant 22 attorneys to sue the other driver. (Id. at 288.) She signed a retainer agreement, which provided 23 the defendants would be entitled to 40% of the gross recovery and that the defendants were 24 authorized to deposit the proceeds into their client trust account and distribute them in 25 accordance with the agreement. (Id.) Plaintiff’s claims and her husband’s loss of consortium 26 claim were jointly settled for a combined amount of $3,000,000, and settlement checks were 27 tendered to the defendant attorneys. Thereafter, the defendants did not submit “any kind of 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -3- 1 accounting” and on March 2, 2011 “wrongfully paid” themselves from the settlement funds. (Id. 2 at 289.) The attorneys also “wrongfully” charged plaintiff approximately $934,000 in litigation 3 costs, and many of the charges were fraudulent or improper. (Id.) Plaintiff learned of the false 4 charges in December 2011. 5 More than a year later, she sued the former attorneys alleging ten causes of action 6 including declaratory relief, breach of fiduciary duty, breach of contract, unfair and deceptive 7 business practices and conversion. (Id. at 287.) The trial court sustained the defendants’ 8 demurrer on statute of limitations grounds. (Id. at 287.) The court of appeal affirmed the trial 9 court’s judgment and found that all of plaintiff’s claims were barred by the one-year statute of 10 limitations set forth in section 340.6. (Id. at 290-297.) It explained: 11 Plaintiff alleges she discovered the false charges that form the basis of 12 her claims no later than December 2011, and therefore she was on notice at that time that defendants had wrongfully withheld funds from her. Her 13 failure to file this action within one year after that discovery is fatal to 14 her claims. (Foxen at 292.) 15 To be certain, courts broadly apply the one-year limitation period in section 340.6 when 16 the gravamen of a claim is legal malpractice. Benson cannot avoid its application by masking his 17 claims otherwise. “In all cases other than actual fraud, whether the theory of liability is based on 18 the breach of an oral or written contract, a tort, or a breach of fiduciary duty, the [section 340.6] 19 statutory period applies.” (Levin v. Graham & James (1995) 37 Cal.App.4th 798, 805; see also 20 Quintillani v. Mannerino (1998) 62 Cal.App.4th 54, 68 [applying section 340.6 to a cause of 21 action for breach of fiduciary duty]; Southland Mechanical Constructors Corp. v. Nixen (1981) 22 119 Cal.App.3d 417 [disapproved on other grounds in Laird v. Blackner (1992) 2 Cal.4th 606] 23 [applying section 340.6 to a cause of action for breach of contract]; Stoll v. Super. Ct. (1992) 9 24 Cal.App.4th 1362, 1363-1364 [applying section 340.6 to breach of a fiduciary duty claim against 25 attorney].) 26 27 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -4- 1 Permeating each cause of action in the cross-complaint is the allegation that Benson 2 contends he suffered actual injury on July 7, 2017, when the arbitration award was issued, 3 allegedly due to cross-defendants’ malpractice. (Cross-Complaint, ¶ 35.) The cross-complaint 4 also alleges that “[b]y this point Dr. Benson was devastated and justly had little confidence” in 5 cross-defendants. (Cross-Complaint, ¶ 35.) While Benson may put different labels on his claims, 6 it is indisputable that on July 7, 2017 he suffered his actual injury for purposes of section 340.6. 7 (See Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 743 8 [“actual injury” occurs for purposes of the statute of limitations “when the client suffers any loss 9 or injury legally cognizable as damages…”.) Benson does not dispute this in opposition, and the 10 failure to do so is fatal. On this basis, cross-defendants’ demurrer must be granted in its entirety. 11 B. THE FRAUD CAUSE OF ACTION IS ALSO SUBJECT TO § 340.6, AND 12 REGARDLESS, WOULD ALSO BE BARRED BY THE THREE-YEAR 13 STATUTE OF LIMITATIONS FOUND IN CODE OF CIVIL 14 PROCEDURE § 338 15 While claims for actual fraud are excepted from section 340.6, case law interpreting the 16 statute makes clear that every allegation of fraud will not fall outside its scope. (Radovich v. 17 Locke-Paddon (1995) 35 Cal.App.4th 946, 979 [holding bare allegation that lawyer acted 18 fraudulently without any supporting facts is not enough to trigger the actual fraud exception to 19 the one-year statute of limitations in section 340.6].) In Quintilliani v. Mannerino (1998) 62 20 Cal.App.4th 54, 69, the court of appeal held that anything amounting to constructive fraud is still 21 subject to the one-year limitation period in section 340.6. “Constructive fraud may result from a 22 breach of fiduciary duty, regardless of intent or motive, and the Legislature intended only to except instances of actual fraud on grounds that acts of actual fraud should not be treated as legal 23 malpractice.” (Id. [quoting Stoll v. Superior Court (1992) 9 Cal.App.4th 1362, 1368].) In Stoll, 24 the court clarified that the Legislature intended the fraud exception in section 340.6 to exclude 25 only “wrongs committed when the defendant was not acting as an attorney.” (Stoll, 9 26 Cal.App.4th at 1368.) 27 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -5- 1 Benson’s cause of action for fraud in the cross-complaint is nothing more than a 2 malpractice and breach of fiduciary duty claim deviously pled to avoid the statute of limitations 3 without any factual support. Benson specifically relies on the allegation that Fenton “as a 4 licensed attorney, had a fiduciary relationship with Dr. Benson, which imposed a duty to disclose 5 facts.” (Cross-Complaint, ¶ 94.) The cross-complaint in this regard is notably devoid of factual 6 allegations supporting fraud. Benson merely uses the same allegation supporting his malpractice 7 and fiduciary duty claims – that Fenton was unable to “make him millions” – and argues that this 8 also constitutes fraud. No matter how it is pled, this is precisely the sort of constructive fraud that the courts recognized in Quintilliani and Stoll. Accordingly, Benson’s fraud cause of action 9 is still subject to section 340.6 and is barred by the statute of limitations. 10 Regardless, should this Court invoke the three-year statute of limitations in Code of Civil 11 Procedure section 338 applied to fraud claims, Benson’s cause of action is still barred. Benson 12 seemingly relies on two different “statements” to support his claim. First, that cross-defendants 13 represented they would get Benson “millions of dollars.” (Cross-Complaint, ¶ 88.) The cross- 14 complaint plainly alleges that this “statement” was made in January 2017. (Cross-Complaint, ¶ 15 20.) As a result, a fraud claim relying on this statement would still be barred by the three-year 16 statute of limitations. 17 Second, Benson relies on the “statement” that cross-defendants represented they would 18 not charge him for fees after May 24, 2017. (Cross-Complaint, ¶ 88.) Assuming a fraud cause of 19 action based on this “statement” can satisfy the other necessary elements, which it cannot, 20 Benson’s claim fails because he has not actually paid the bills he contends he would not be 21 charged for. In other words, Benson cannot rely on this “statement” to support his fraud claim 22 because he has not suffered the actual damages. (Alliance Mortgate Co. v. Rothwell (1995) 10 23 Cal.4th 1226.) 24 In sum, Benson’s cause of action is barred by law no matter what statute of limitations 25 this Court chooses to apply. Similar to the other causes of action in the cross-complaint, the 26 fraud claim must be dismissed without leave to amend. 27 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -6- 1 C. CROSS-COMPLAINANT’S CONTENTION THAT THE STATUTE OF 2 LIMITATIONS WAS TOLLED BASED ON THE DELAYED DISCOVERY 3 DOCTRINE IS MERITLESS 4 Benson also opposes this demurrer on the grounds that the statute of limitations was 5 tolled pursuant to the delayed discovery doctrine. The delayed discovery doctrine, or the 6 “discovery rule,” only delays accrual “until the plaintiff has, or should have, inquiry notice of the 7 cause of action …. In other words, plaintiffs are required to conduct a reasonable investigation 8 after becoming aware of an injury, and are charged with knowledge of the information that 9 would have been revealed by such an investigation.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 10 35 Cal.4th 797, 807-808.) A “plaintiff whose complaint shows on its face that his claim would 11 be barred without the benefit of the discovery rule must specifically plead facts to show (1) the 12 time and manner of discovery and (2) the inability to have made earlier discovery despite 13 reasonable diligence.” (Id. at 808.) 14 Benson’s only support for this position aside from reciting black letter law is the assertion 15 that he still does not have all of his “property” from cross-defendants to know what other actions 16 and general business matters it has violated. At the outset, it is significant that Benson does not 17 allege in the cross-complaint an inability to have made earlier discovery despite reasonable 18 diligence. His attorney only writes this contention in the opposition papers, which does not 19 support the sufficiency of the cross-complaint. 20 Substantively, the position itself is meritless. Benson expressly alleges in the cross- 21 complaint that he discovered cross-defendants’ wrongs in July 2017 when the arbitration award 22 was issued. (Cross-Complaint, ¶ 35.) The cross-complaint also alleges that “[b]y this point Dr. 23 Benson was devastated and justly had little confidence” in cross-defendants. (Cross-Complaint, ¶ 24 35.) Benson cannot plead around the fact that he had inquiry notice of the claims against cross- 25 defendants as of July 2017 and simply sat on his hands for years. Any contention that Benson 26 could not discover cross-defendants’ wrongdoing because he did not have all of his “property” 27 must be summarily rejected. 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -7- 1 As a result, the cross-complaint does not contain sufficient allegations for the Court to 2 grant Benson the benefit of the tolling provisions due to the delayed discovery doctrine. On this 3 basis, the demurrer must also be granted in its entirety. 4 III. CONCLUSION 5 Based on the foregoing and the matters raised in Cross-Defendants’ moving papers, 6 Cross-Defendants respectfully request that this Court sustain the Demurrer to the Cross- 7 Complaint without leave to amend. 8 Dated: January 29, 2021 JOSHUA P. FRIEDMAN AND ASSOCIATES, 9 INC. 10 11 By: ______________________________________ JOSHUA P. FRIEDMAN 12 Attorneys for Cross-Defendants 13 FENTON LAW GROUP, LLP and HENRY R. FENTON 14 15 Dated: January 29, 2021 KAUFMAN DOLOWICH & VOLUCK LLP 16 17 By: ______________________________________ ANDREW J. WAXLER 18 Attorneys for Cross-Defendants FENTON LAW GROUP, LLP and HENRY R. 19 FENTON 20 4816-3095-3434, v. 4 21 22 23 24 25 26 27 28 CROSS-DEFENDANTS’ REPLY TO OPPOSITION TO DEMURRER TO THE CROSS-COMPLAINT -8-