1
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
MICHAEL A CONGER ESQUIRE (State Bar No 147882) LAW OFFICE OF MICHAEL A CONGER 16236 San Dieguito Road Suite 4-14 Mailing PO Box 9374 Rancho Santa Fe California 92067 Telephone (858) 759-0200 Facsimile (858) 759-1906
Attorneys for Plaintiffs Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore individually and on behalf of all others similarly situated
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN DIEGO
CHRlSTOPHER ELLIS BRADLEY D ELOW ) CASE NO 37-2010-00086284shyROBERT FINCH and HOWARD LaBORE ) CU-PN-CTL individually and on behalf of all others similarly ) situated )
) Plaintiffs ) PLAINTIFFS MEMORANDUM OF
) POINTS AND AUTHORlTIES IN v ) OPPOSITION TO DEMURRER OF
) GREGORY GLENN PETERSEN JACKSON DeMARCO TIDUS amp ) PECKENPAUGH A LAW CORPORATION ) GREGORY GLENN PETERSEN an individual ) CHRlSTOPHERD NISSEN an individual ) BRADLEY MATHEWS an individual ) STEPHENEY R WINDSOR an individual ) MICHAEL ANTHONY JENKINS an individual ) Date July 232010 and DOES 1-50 ) Time 1000 am
) Judge Hon Ronald S Prager Defendants ) Dept C-71
) Complaint Filed February 24 2010 Trial February 102011 ~--------------- )
Plaintiffs Memorandum of Points and Authorities in Opposition to DemurrerofGregory Glenn Petersen
1
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
TABLE OF CONTENTS
I INTRODUCTION 1
II STATEMENT OF MATERIAL FACTS 1
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION 4
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2) BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE 4
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE) 5
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice 5
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially
Noticeable Facts 7
C The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA v SDCERS 7
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations 8
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant 9
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer 12
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF 12
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice 12
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out 13
Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
C Petersen Has Not Shown VJny (1) Privileged Communications With Opt-Outs (If Any) Would Be Relevant Much Less Necessary To His Defense ofthe Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiff s Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in VJnich the Drastic Action of Dismissal Should Occur 13
D The Cases on Which Petersen Relies Are Distinguishable 14
VII CONCLUSION 15
11
Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
10
11
12
16
17
18
19
20
21
22
23
24
25
26
27
28
TABLE OF AUTHORITIES
Cases
Adams v Paul (1995) 11 Ca14th 583 8
Ambriz v Kelegian (2007) 146 CalAppAth 1519 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 5
Aubry v Tri-City Hospital Dist (1992) 2 CaL4th 962 4
Beal Bank SSB v Arter amp Hadden LLP (2007) 42 Ca14th 503 10-11
Budd v Nixen (1971) 6 Ca13d 195 5
Coscia v McKenna amp Cuneo (2001) 25 CalAth 1194 5 7
General Dynamics Corp v Superior Court (1994) 7 Ca14th 1164 14
Howe v Bank ofAmerica NA (2009) 179 CaLAppAth 1443 5
Jordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18 Ca14th 739 8-9
lvfcDermott Will amp Emery v Superior Court (2000) 83 CalAppAth 378 12 15
Miller v Bechtel Corp (1983) 33 Ca13d 868 9
Pacific Tel amp Tel Co v Fink (1956) 141 Ca1App2d 332 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 12
Samuels v Mix (1999) 22 Ca14th 1 0 bullbull 6 12
San Diego Police Officers Association v San Diego City Employees Retirement System (2009) 568 Fo2d 725 1-37 130 bullbullbullbullbullbull
iii Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
Solin v 0 A1elveny amp Meyers LLP (2001) 89 CalApp4th 451 15
Windham at Carmel A10untain Ranch Assn v Superior Court (2003) 109 CalApp4th 1162
Wright v Williams (1975) 47 CalApp3d 802 5
Statutes
Code of Civil Procedure
sect 3406 6 8
sect 3406(a) 7-8 12
sect 3406(a)(1) ~ 7-8
sect 3406(a)(2) 9-10 12
sect 3406(a)(3) 12
Evidence Code
sect 95S 11214
Government Code
sect 3500 1
United States Code
42 USC
sect 1983 2
iv Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
1 INTRODUCTION
This is a class action attorney malpractice lawsuit brought by San Diego police officers
Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore employees of the City of
San Diego (City) (Class Action Complaint for Attorney Malpractice (Complaint) ~ 1)
Defendant Gregory Glenn Petersen (Petersen) one of the primary attorneys who represented
the plaintiffs in previous litigation has filed a demurrer to the complaint raising two arguments
(1) the action is time-barred under the statute of limitations and (2) he is unable to defend himself
because of the attorney-client privilege
However as will be shown below Petersens demurrer should be overruled The
complaint is not time-barred on its face (or from matters of which the court may properly take
judicial notice )Furth~r because the attorney-client privileged has been waived by the filing of a
legal malpractice action (Evid Code sect 958) Petersen can defend himself
II STATEMENT OF MATERIAL FACTS
In 2005 the plaintiffs and approximately 1800 of their fellow police officers retained the
defendant attorneys including Petersen to contest the City ofSan Diegos imposition of contract
terms on the San Diego Police Officers Association (SDPOA) the recognized bargaining
agent for San Diego police officers under the Meyers-Milias-Brown Act (Gov Code sect 3500 et
seq) (Complaint ~ 14) The defendants agreed to represent the plaintiffs and approximately
1800 of their fellow police officers on precisely the same terms and conditions (Complaint ~
16)
The defendant attorneys filed two lawsuits (the underlying litigationf on behalf of the
The following statement of material facts states the allegations of the complaint filed February 24 2010 In the accompanying Notice of Lodgment in Support of Plaintiffs Opposition to Demurrers [etc] (NOL) Exhibit 1 the plaintiffs have lodged Plaintiff Christopher Ellis Response to Special Interrogatories Propounded by Defendant Jackson DeMarco Tidus amp Peckenpaugh which particularly in response to interrogatories 79-1027 and 35 contain more detailed statement of facts Should the court deem any amendment necessary plaintiffs request leave to amend to state these additional facts
2 The first was SDPOA on behalfofitselfand on behalfofall ofits members v
Aguirre et aI United States District Court for the Southern District of California Case No 05shycv-1581 Because the United States Court of Appeals for the Ninth Circuit titled this case San
1 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
TABLE OF CONTENTS
I INTRODUCTION 1
II STATEMENT OF MATERIAL FACTS 1
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION 4
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2) BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE 4
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE) 5
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice 5
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially
Noticeable Facts 7
C The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA v SDCERS 7
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations 8
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant 9
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer 12
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF 12
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice 12
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out 13
Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
C Petersen Has Not Shown VJny (1) Privileged Communications With Opt-Outs (If Any) Would Be Relevant Much Less Necessary To His Defense ofthe Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiff s Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in VJnich the Drastic Action of Dismissal Should Occur 13
D The Cases on Which Petersen Relies Are Distinguishable 14
VII CONCLUSION 15
11
Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
10
11
12
16
17
18
19
20
21
22
23
24
25
26
27
28
TABLE OF AUTHORITIES
Cases
Adams v Paul (1995) 11 Ca14th 583 8
Ambriz v Kelegian (2007) 146 CalAppAth 1519 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 5
Aubry v Tri-City Hospital Dist (1992) 2 CaL4th 962 4
Beal Bank SSB v Arter amp Hadden LLP (2007) 42 Ca14th 503 10-11
Budd v Nixen (1971) 6 Ca13d 195 5
Coscia v McKenna amp Cuneo (2001) 25 CalAth 1194 5 7
General Dynamics Corp v Superior Court (1994) 7 Ca14th 1164 14
Howe v Bank ofAmerica NA (2009) 179 CaLAppAth 1443 5
Jordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18 Ca14th 739 8-9
lvfcDermott Will amp Emery v Superior Court (2000) 83 CalAppAth 378 12 15
Miller v Bechtel Corp (1983) 33 Ca13d 868 9
Pacific Tel amp Tel Co v Fink (1956) 141 Ca1App2d 332 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 12
Samuels v Mix (1999) 22 Ca14th 1 0 bullbull 6 12
San Diego Police Officers Association v San Diego City Employees Retirement System (2009) 568 Fo2d 725 1-37 130 bullbullbullbullbullbull
iii Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
Solin v 0 A1elveny amp Meyers LLP (2001) 89 CalApp4th 451 15
Windham at Carmel A10untain Ranch Assn v Superior Court (2003) 109 CalApp4th 1162
Wright v Williams (1975) 47 CalApp3d 802 5
Statutes
Code of Civil Procedure
sect 3406 6 8
sect 3406(a) 7-8 12
sect 3406(a)(1) ~ 7-8
sect 3406(a)(2) 9-10 12
sect 3406(a)(3) 12
Evidence Code
sect 95S 11214
Government Code
sect 3500 1
United States Code
42 USC
sect 1983 2
iv Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
1 INTRODUCTION
This is a class action attorney malpractice lawsuit brought by San Diego police officers
Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore employees of the City of
San Diego (City) (Class Action Complaint for Attorney Malpractice (Complaint) ~ 1)
Defendant Gregory Glenn Petersen (Petersen) one of the primary attorneys who represented
the plaintiffs in previous litigation has filed a demurrer to the complaint raising two arguments
(1) the action is time-barred under the statute of limitations and (2) he is unable to defend himself
because of the attorney-client privilege
However as will be shown below Petersens demurrer should be overruled The
complaint is not time-barred on its face (or from matters of which the court may properly take
judicial notice )Furth~r because the attorney-client privileged has been waived by the filing of a
legal malpractice action (Evid Code sect 958) Petersen can defend himself
II STATEMENT OF MATERIAL FACTS
In 2005 the plaintiffs and approximately 1800 of their fellow police officers retained the
defendant attorneys including Petersen to contest the City ofSan Diegos imposition of contract
terms on the San Diego Police Officers Association (SDPOA) the recognized bargaining
agent for San Diego police officers under the Meyers-Milias-Brown Act (Gov Code sect 3500 et
seq) (Complaint ~ 14) The defendants agreed to represent the plaintiffs and approximately
1800 of their fellow police officers on precisely the same terms and conditions (Complaint ~
16)
The defendant attorneys filed two lawsuits (the underlying litigationf on behalf of the
The following statement of material facts states the allegations of the complaint filed February 24 2010 In the accompanying Notice of Lodgment in Support of Plaintiffs Opposition to Demurrers [etc] (NOL) Exhibit 1 the plaintiffs have lodged Plaintiff Christopher Ellis Response to Special Interrogatories Propounded by Defendant Jackson DeMarco Tidus amp Peckenpaugh which particularly in response to interrogatories 79-1027 and 35 contain more detailed statement of facts Should the court deem any amendment necessary plaintiffs request leave to amend to state these additional facts
2 The first was SDPOA on behalfofitselfand on behalfofall ofits members v
Aguirre et aI United States District Court for the Southern District of California Case No 05shycv-1581 Because the United States Court of Appeals for the Ninth Circuit titled this case San
1 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
C Petersen Has Not Shown VJny (1) Privileged Communications With Opt-Outs (If Any) Would Be Relevant Much Less Necessary To His Defense ofthe Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiff s Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in VJnich the Drastic Action of Dismissal Should Occur 13
D The Cases on Which Petersen Relies Are Distinguishable 14
VII CONCLUSION 15
11
Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
10
11
12
16
17
18
19
20
21
22
23
24
25
26
27
28
TABLE OF AUTHORITIES
Cases
Adams v Paul (1995) 11 Ca14th 583 8
Ambriz v Kelegian (2007) 146 CalAppAth 1519 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 5
Aubry v Tri-City Hospital Dist (1992) 2 CaL4th 962 4
Beal Bank SSB v Arter amp Hadden LLP (2007) 42 Ca14th 503 10-11
Budd v Nixen (1971) 6 Ca13d 195 5
Coscia v McKenna amp Cuneo (2001) 25 CalAth 1194 5 7
General Dynamics Corp v Superior Court (1994) 7 Ca14th 1164 14
Howe v Bank ofAmerica NA (2009) 179 CaLAppAth 1443 5
Jordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18 Ca14th 739 8-9
lvfcDermott Will amp Emery v Superior Court (2000) 83 CalAppAth 378 12 15
Miller v Bechtel Corp (1983) 33 Ca13d 868 9
Pacific Tel amp Tel Co v Fink (1956) 141 Ca1App2d 332 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 12
Samuels v Mix (1999) 22 Ca14th 1 0 bullbull 6 12
San Diego Police Officers Association v San Diego City Employees Retirement System (2009) 568 Fo2d 725 1-37 130 bullbullbullbullbullbull
iii Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
Solin v 0 A1elveny amp Meyers LLP (2001) 89 CalApp4th 451 15
Windham at Carmel A10untain Ranch Assn v Superior Court (2003) 109 CalApp4th 1162
Wright v Williams (1975) 47 CalApp3d 802 5
Statutes
Code of Civil Procedure
sect 3406 6 8
sect 3406(a) 7-8 12
sect 3406(a)(1) ~ 7-8
sect 3406(a)(2) 9-10 12
sect 3406(a)(3) 12
Evidence Code
sect 95S 11214
Government Code
sect 3500 1
United States Code
42 USC
sect 1983 2
iv Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
1 INTRODUCTION
This is a class action attorney malpractice lawsuit brought by San Diego police officers
Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore employees of the City of
San Diego (City) (Class Action Complaint for Attorney Malpractice (Complaint) ~ 1)
Defendant Gregory Glenn Petersen (Petersen) one of the primary attorneys who represented
the plaintiffs in previous litigation has filed a demurrer to the complaint raising two arguments
(1) the action is time-barred under the statute of limitations and (2) he is unable to defend himself
because of the attorney-client privilege
However as will be shown below Petersens demurrer should be overruled The
complaint is not time-barred on its face (or from matters of which the court may properly take
judicial notice )Furth~r because the attorney-client privileged has been waived by the filing of a
legal malpractice action (Evid Code sect 958) Petersen can defend himself
II STATEMENT OF MATERIAL FACTS
In 2005 the plaintiffs and approximately 1800 of their fellow police officers retained the
defendant attorneys including Petersen to contest the City ofSan Diegos imposition of contract
terms on the San Diego Police Officers Association (SDPOA) the recognized bargaining
agent for San Diego police officers under the Meyers-Milias-Brown Act (Gov Code sect 3500 et
seq) (Complaint ~ 14) The defendants agreed to represent the plaintiffs and approximately
1800 of their fellow police officers on precisely the same terms and conditions (Complaint ~
16)
The defendant attorneys filed two lawsuits (the underlying litigationf on behalf of the
The following statement of material facts states the allegations of the complaint filed February 24 2010 In the accompanying Notice of Lodgment in Support of Plaintiffs Opposition to Demurrers [etc] (NOL) Exhibit 1 the plaintiffs have lodged Plaintiff Christopher Ellis Response to Special Interrogatories Propounded by Defendant Jackson DeMarco Tidus amp Peckenpaugh which particularly in response to interrogatories 79-1027 and 35 contain more detailed statement of facts Should the court deem any amendment necessary plaintiffs request leave to amend to state these additional facts
2 The first was SDPOA on behalfofitselfand on behalfofall ofits members v
Aguirre et aI United States District Court for the Southern District of California Case No 05shycv-1581 Because the United States Court of Appeals for the Ninth Circuit titled this case San
1 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
10
11
12
16
17
18
19
20
21
22
23
24
25
26
27
28
TABLE OF AUTHORITIES
Cases
Adams v Paul (1995) 11 Ca14th 583 8
Ambriz v Kelegian (2007) 146 CalAppAth 1519 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 5
Aubry v Tri-City Hospital Dist (1992) 2 CaL4th 962 4
Beal Bank SSB v Arter amp Hadden LLP (2007) 42 Ca14th 503 10-11
Budd v Nixen (1971) 6 Ca13d 195 5
Coscia v McKenna amp Cuneo (2001) 25 CalAth 1194 5 7
General Dynamics Corp v Superior Court (1994) 7 Ca14th 1164 14
Howe v Bank ofAmerica NA (2009) 179 CaLAppAth 1443 5
Jordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18 Ca14th 739 8-9
lvfcDermott Will amp Emery v Superior Court (2000) 83 CalAppAth 378 12 15
Miller v Bechtel Corp (1983) 33 Ca13d 868 9
Pacific Tel amp Tel Co v Fink (1956) 141 Ca1App2d 332 0 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 12
Samuels v Mix (1999) 22 Ca14th 1 0 bullbull 6 12
San Diego Police Officers Association v San Diego City Employees Retirement System (2009) 568 Fo2d 725 1-37 130 bullbullbullbullbullbull
iii Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
Solin v 0 A1elveny amp Meyers LLP (2001) 89 CalApp4th 451 15
Windham at Carmel A10untain Ranch Assn v Superior Court (2003) 109 CalApp4th 1162
Wright v Williams (1975) 47 CalApp3d 802 5
Statutes
Code of Civil Procedure
sect 3406 6 8
sect 3406(a) 7-8 12
sect 3406(a)(1) ~ 7-8
sect 3406(a)(2) 9-10 12
sect 3406(a)(3) 12
Evidence Code
sect 95S 11214
Government Code
sect 3500 1
United States Code
42 USC
sect 1983 2
iv Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
1 INTRODUCTION
This is a class action attorney malpractice lawsuit brought by San Diego police officers
Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore employees of the City of
San Diego (City) (Class Action Complaint for Attorney Malpractice (Complaint) ~ 1)
Defendant Gregory Glenn Petersen (Petersen) one of the primary attorneys who represented
the plaintiffs in previous litigation has filed a demurrer to the complaint raising two arguments
(1) the action is time-barred under the statute of limitations and (2) he is unable to defend himself
because of the attorney-client privilege
However as will be shown below Petersens demurrer should be overruled The
complaint is not time-barred on its face (or from matters of which the court may properly take
judicial notice )Furth~r because the attorney-client privileged has been waived by the filing of a
legal malpractice action (Evid Code sect 958) Petersen can defend himself
II STATEMENT OF MATERIAL FACTS
In 2005 the plaintiffs and approximately 1800 of their fellow police officers retained the
defendant attorneys including Petersen to contest the City ofSan Diegos imposition of contract
terms on the San Diego Police Officers Association (SDPOA) the recognized bargaining
agent for San Diego police officers under the Meyers-Milias-Brown Act (Gov Code sect 3500 et
seq) (Complaint ~ 14) The defendants agreed to represent the plaintiffs and approximately
1800 of their fellow police officers on precisely the same terms and conditions (Complaint ~
16)
The defendant attorneys filed two lawsuits (the underlying litigationf on behalf of the
The following statement of material facts states the allegations of the complaint filed February 24 2010 In the accompanying Notice of Lodgment in Support of Plaintiffs Opposition to Demurrers [etc] (NOL) Exhibit 1 the plaintiffs have lodged Plaintiff Christopher Ellis Response to Special Interrogatories Propounded by Defendant Jackson DeMarco Tidus amp Peckenpaugh which particularly in response to interrogatories 79-1027 and 35 contain more detailed statement of facts Should the court deem any amendment necessary plaintiffs request leave to amend to state these additional facts
2 The first was SDPOA on behalfofitselfand on behalfofall ofits members v
Aguirre et aI United States District Court for the Southern District of California Case No 05shycv-1581 Because the United States Court of Appeals for the Ninth Circuit titled this case San
1 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
Solin v 0 A1elveny amp Meyers LLP (2001) 89 CalApp4th 451 15
Windham at Carmel A10untain Ranch Assn v Superior Court (2003) 109 CalApp4th 1162
Wright v Williams (1975) 47 CalApp3d 802 5
Statutes
Code of Civil Procedure
sect 3406 6 8
sect 3406(a) 7-8 12
sect 3406(a)(1) ~ 7-8
sect 3406(a)(2) 9-10 12
sect 3406(a)(3) 12
Evidence Code
sect 95S 11214
Government Code
sect 3500 1
United States Code
42 USC
sect 1983 2
iv Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
1 INTRODUCTION
This is a class action attorney malpractice lawsuit brought by San Diego police officers
Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore employees of the City of
San Diego (City) (Class Action Complaint for Attorney Malpractice (Complaint) ~ 1)
Defendant Gregory Glenn Petersen (Petersen) one of the primary attorneys who represented
the plaintiffs in previous litigation has filed a demurrer to the complaint raising two arguments
(1) the action is time-barred under the statute of limitations and (2) he is unable to defend himself
because of the attorney-client privilege
However as will be shown below Petersens demurrer should be overruled The
complaint is not time-barred on its face (or from matters of which the court may properly take
judicial notice )Furth~r because the attorney-client privileged has been waived by the filing of a
legal malpractice action (Evid Code sect 958) Petersen can defend himself
II STATEMENT OF MATERIAL FACTS
In 2005 the plaintiffs and approximately 1800 of their fellow police officers retained the
defendant attorneys including Petersen to contest the City ofSan Diegos imposition of contract
terms on the San Diego Police Officers Association (SDPOA) the recognized bargaining
agent for San Diego police officers under the Meyers-Milias-Brown Act (Gov Code sect 3500 et
seq) (Complaint ~ 14) The defendants agreed to represent the plaintiffs and approximately
1800 of their fellow police officers on precisely the same terms and conditions (Complaint ~
16)
The defendant attorneys filed two lawsuits (the underlying litigationf on behalf of the
The following statement of material facts states the allegations of the complaint filed February 24 2010 In the accompanying Notice of Lodgment in Support of Plaintiffs Opposition to Demurrers [etc] (NOL) Exhibit 1 the plaintiffs have lodged Plaintiff Christopher Ellis Response to Special Interrogatories Propounded by Defendant Jackson DeMarco Tidus amp Peckenpaugh which particularly in response to interrogatories 79-1027 and 35 contain more detailed statement of facts Should the court deem any amendment necessary plaintiffs request leave to amend to state these additional facts
2 The first was SDPOA on behalfofitselfand on behalfofall ofits members v
Aguirre et aI United States District Court for the Southern District of California Case No 05shycv-1581 Because the United States Court of Appeals for the Ninth Circuit titled this case San
1 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
1 INTRODUCTION
This is a class action attorney malpractice lawsuit brought by San Diego police officers
Christopher Ellis Bradley D Elow Robert Finch and Howard LaBore employees of the City of
San Diego (City) (Class Action Complaint for Attorney Malpractice (Complaint) ~ 1)
Defendant Gregory Glenn Petersen (Petersen) one of the primary attorneys who represented
the plaintiffs in previous litigation has filed a demurrer to the complaint raising two arguments
(1) the action is time-barred under the statute of limitations and (2) he is unable to defend himself
because of the attorney-client privilege
However as will be shown below Petersens demurrer should be overruled The
complaint is not time-barred on its face (or from matters of which the court may properly take
judicial notice )Furth~r because the attorney-client privileged has been waived by the filing of a
legal malpractice action (Evid Code sect 958) Petersen can defend himself
II STATEMENT OF MATERIAL FACTS
In 2005 the plaintiffs and approximately 1800 of their fellow police officers retained the
defendant attorneys including Petersen to contest the City ofSan Diegos imposition of contract
terms on the San Diego Police Officers Association (SDPOA) the recognized bargaining
agent for San Diego police officers under the Meyers-Milias-Brown Act (Gov Code sect 3500 et
seq) (Complaint ~ 14) The defendants agreed to represent the plaintiffs and approximately
1800 of their fellow police officers on precisely the same terms and conditions (Complaint ~
16)
The defendant attorneys filed two lawsuits (the underlying litigationf on behalf of the
The following statement of material facts states the allegations of the complaint filed February 24 2010 In the accompanying Notice of Lodgment in Support of Plaintiffs Opposition to Demurrers [etc] (NOL) Exhibit 1 the plaintiffs have lodged Plaintiff Christopher Ellis Response to Special Interrogatories Propounded by Defendant Jackson DeMarco Tidus amp Peckenpaugh which particularly in response to interrogatories 79-1027 and 35 contain more detailed statement of facts Should the court deem any amendment necessary plaintiffs request leave to amend to state these additional facts
2 The first was SDPOA on behalfofitselfand on behalfofall ofits members v
Aguirre et aI United States District Court for the Southern District of California Case No 05shycv-1581 Because the United States Court of Appeals for the Ninth Circuit titled this case San
1 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
SDPOA and the plaintiffs (Complaint ~ 15) One of the claims prosecuted by the defendants in
the underlying litigation asserted that the CityS 2005 imposition of heightened eligibility
requirements for health insurance after retirement (retiree health) for SDPOA members
including the plaintiffs violated the plaintiffs civil rights in violation-of 42 USC sect 1983
(Complaint 117) In the underlying litigation the defendants asserted that because retiree
health was a vested benefit it could not be unilaterally modified by the City (Complaint ~ 18)
However in the underlying litigation the defendants failed to investigate discover
present and argue available factual evidence and legal precedent which would have established
that in fact retiree health was a vested benefit which the City could not unilaterally impair
(Complaint ~ 19) For example the defendants failed to present a memorandum from then City
Manager Ray T Blairestablishing that retiree health was promised by the City in exchange formiddot
the plaintiffs withdrawal from the Social Security system (NOL Exh 2) Other factual
Diego Police Officers Association v San Diego City Employees Retirement System in a published opinion (see footnote 5post) we will use SDPOA v SDCERS to refer to that case After the district court ruled that the SDPOA lacked standing to recover damages for the 1800 individual officers the defendants filed the second lawsuit with essentially identical allegations in 2006-Aaron et al v Aguirre et al United States District Court for the Southern District of California Case No 06-cv-1451 (Aaron)
3 In 1982 the City desired to withdraw from the Social Security System In order to successfully withdraw from the Social Security System City employees were required to approve the withdrawaL In order to induce its employees to vote in favor of the Citys withdrawal from the Social Security system the City offered its employees lifetime retiree health
In a memorandum dated November 20 1981 from City Manager Ray T Blair Jr to all City employees the City promised both retiree hospitalization and medical insurance Retired employees will be included in the City health plans The City will pay the premiums As the memo explains in order to opt out of Social Security and Medicare the City had to agree to provide another pension plan to supplement your regular City retirement program At page 2 paragraph 3 of the memo entitled Entry Date it states that all existing employees will be enrolled in the Plan as of January 81982 All future employees will join the Plan immediately on their date ofemployment (Italics added)
Vesting is covered at pages 3 and 4 paragraph 9 of the memo The Plan provides that benefits were 100 vested after 5 years of service In the attachment to the memo entitled WHA T HAPPENS IF WE PULL OUT OF SOCIAL SECURITY beginning at Bate-stamp SDPOA 0399 the City provided questions and answers which were divided into five categories including Medicare Hospital Insurance and Medicare Medical Insurance Question 22
2 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
information supporting the contention that retiree health was a vested benefit was also not
presented in the underlying litigation (Complaint ~ 194)
As a result of the negligence of the defendant attorneys in bringing and poorly
prosecuting the retiree health issue the United States District Court for the Southern District of
California and the United States Court of Appeals for the Ninth CircuitS ruled that retiree health
benefits are not vested (Complaint ~ 20) Relying on those rulings in late July 2009 the City
substantially reduced the retiree health benefit by imposing a cap of $8880 per year for any
SDPOAmember retiring after July 12009 (Complaint ~ 21) According to actuarial analysis
this cap will cost the plaintiff class between $142 and $152 million (Complaint ~ 22)
As attorneys for plaintiffs and approximately 1800 similarly-situated police officers the
defendant attorneys owed a duty to use reasonable care and to discharge their obligations
competently (Complaint ~ 30) The defendant attorneys breached their duties to the plaintiffs
and approximately 1800 similarly-situated police officers in several respects including but not
limited to
(a) failing to properly advise the plaintiffs and approximately 1800 similarlyshysituated police officers regarding the retiree health litigation
(b) failing to conduct an adequate investigation on the issue of retiree health before raising it as a claim in the litigation
(page SDPOA 0402) asked What will the City provide for hospital insurance The answer The retired employees will be included in the City health plans The City will pay for the retired employees health insurance These costs will not be paid out of the Supplemental Pension Plan Question 24 (page SDPOA 0403) asked What will the City provide for medical insurance The answer Retired employees will be included in the City health plans The City will pay the premiums The cost of the premiums will not come from the Supplemental Pension Plan
Relying on the CityS promise City employees approved the Citys withdrawal from the Social Security system and are no longer part of that system
4 In fact in the underlying litigation rather than presenting evidence (or legal authority) supporting their assertion that retiree health was a vested benefit the defendants actually presented adverse evidence and conceded the issue in their appellants reply brief (NOL Exh 1)
San Diego Police Officers Association v San Diego City Employees Retirement System (SDPOA v SDCERS) (2009) 568 F2d 725
3 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
(c) failing to conduct adequate discovery on the issue of retiree health once it had been raised in the litigation
(d) failing to competently present available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(e) failing to competently argue available factual evidence and legal precedent which would have established that in fact retiree health was a vested benefit which the City could not unilaterally impair
(f) tailing to request voluntary dismissal of the retiree health issue prior to suffering an adverse judgment after it had become clear that insufficient evidence and argument had been presented to have any chance of prevailing on the issue
(g) concealing (a) through (f) above while continuing to represent and charge fees to the plaintiffs and approximately 1800 similarly-situated police officers (Complaint ~ 31)
III A GENERAL DEMURRER TESTS THE LEGAL SUFFICIENCY OF THE FACTUAL ALLEGATIONS IN A COMPLAINT TO STATE A CAUSE OF ACTION
A demurrer tests the legal sufficiency of factual allegations in acomplaint [Citation]
(Windham at Carmel Mountain Ranch Assn v Superior Court (2003) 109 CaLAppAth 1162
1168) In ruling on demurrers the court must treat[] the demurrer as admitting all facts properly
pleaded (Aubry v Tri-City Hospital Dist (1992) 2 Ca14th 962 967 Fox v Ethicon Endo-
Surgery Inc (2005) 35 CaL4th 797810) [IJt is error for a trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal theory (1ubry supra
Fox supra) And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the defendant can be
cured by amendment (Aubry supra Fox supra)
IV THE PLAINTIFFS HAVE ALLEGED THE FOUR ELEMENTS OF A CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE (1) DUTY (2)BREACH (3) PROXIMATE CAUSE AND (4) ACTUAL LOSS OR DAMAGE
The elements of a cause of action in tort for professional negligence are (1) the duty of
the professional to use such skill prudence and diligence as other members of his profession
commonly possess and exercise (2) a breach of that duty (3) a proximate causal connection
between the negligent conduct and the resulting injury and (4) actual loss or damage resulting
4 Plaintiffs Memorandum ofPoints and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
from the professionals negligence (Buddv Nixen (197]) 6 Ca13d 195200 Judicial Council
of California Civil Jury Instructions [CACI] No 600) Moreover an attorney who holds
himself out as a specialist has an even higher standard of care (Wright v Williams (1975) 47
CalApp3d 802 810) In their complaint the plaintiffs easily satisfied the pleading requirement
sufficient to state a claim for legal malpractice including duty (Complaint ~ 30) breach of duty
(id ~~ 19 31) causation (id ~(( 20-2231) and damages (id ~i[ 2232)
V THE COMPLAINT IS NOT TIME-BARRED ON ITS FACE (OR FROM MATTERS OF WHICH THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE)
Defendant Petersen contends the complaint fails to state facts sufficientto constitute a
cause of action (Defendant Gregory Glenn Petersens Notice of Hearing on Demurrer to
Plaintiffs Complaint Demurrer to Compl~int and Supporting Memorandum of Points and
Authorities (Petersen Dem) p 56-8) because it is barred by the statute of limitations Code
of Civil Procedure section 3406 (id p 22-3)
When a ground for objection to a complaint such as the statute of limitations appears
on its face or from matters of which the court may or must take judicial notice a demurrer on
that ground is proper (Howe v Bank ofAmerica NA (2009) 179 CalAppAth 1443 1449)
However this is not such a case It cannot be ascertained from the face of the complaint or from
the matters of which the court may properly take judicial notice when the plaintiffs cause of
action for legal malpractice accrued ie when the statute of limitations commenced to run
Therefore defendant Petersen must raise this affirmative defense by answer and prove it at trial
A The One-Year Statute of Limitations Commences When the Client Discovers or Should Discover the Facts Essential to the Malpractice Claim and Suffers Appreciable and Actual Harm from the Malpractice
The elements of a legal malpractice cause of action are (1 ) the duty of the attorney to
use such skill prudence and diligence as members of his or her profession commonly possess
and exercise (2) a breach of that duty (3) a proximate causal connection between the breach and
the resulting injury and (4) actual loss or damage resulting from the attorneys negligence
[Citation] (Ambriz v Keiegian (2007) 146 CalAppAth 1519 1531 quoting Coscia v
McKenna amp Cuneo (2001) 25 Ca14th 11941199)
5 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
The plaintiffs agree that the applicable statute of limitations is set forth in Code of Civil
Procedure section 3406 (section 3406) which provides in relevant part
(a) An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date of the wrongful act or omission whichever occurs first [I]n no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist
(1) The plaintiff has not sustained actual injury
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney except that this subdivision shall toll only the four-year limitation
(See Petersen Dem pp 7-9)
On its face section 3406 states two distinct and alternative limitation periods one ye~r
after actual or constructive discovery orfour years after occurrence (the date of the wrongful act
or omission) whichever occurs first [Citations] (Samuels v Mix (1999) 22 Ca14th 17)
The period relied upon by defendant Petersen is the one-year period which commences on
discovery not the four-year period which commences on the occurrence of the breach of duty
Under the statute and cases a cause of action for legal malpractice accrues when (1) the
client discovers or should discover the facts essential to the malpractice claim and (2) suffers
appreciable and actual harm from the malpractice (Samuels v Mix supra 22 Ca14th at p 11)
It is the defendants burden not the plaintiffs burden to prove when the plaintiff discovered or
through the use of reasonable diligence should have discovered the facts constituting the
defendants alleged malpractice (Id at p 5)
Obviously the date of expiration of a statute of limitations cannot be ascertained if the
date of commencement of the statute cannot be ascertained Therefore it was incumbent upon
defendant Petersen to demonstrate-from the face of the complaint or matters of which the court
may properly take judicial notice-when the plaintiffs discover[ ed] or through the use of
reasonable diligence should have discovered the facts constituting the wrongful act or
6 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
omission (sect 3406 subd (a)) Because he has not done so his demurrer should be overruled
B The Date the Plaintiffs Discovered Defendant Petersons Malpractice Is Not Ascertainable from the Face of the Complaint or Judicially Noticeable Facts
The plaintiffs have not alleged when they discover[ ed] the facts constituting the
wrongful act[s] or omission[s] (sect 3406 subd (a)) of defendant Petersen (Complaint passim)
If that date was within one year of the date the complaint was filed February 24 2010 the action
is not time-barred (sect 3406 subd (a))
Defendant Petersen does not request the court to take judicial notice of (1) the fact that
the plaintiffs did discover or (2) the fact that the plaintiffs through the use of reasonable
diligence should have discovered the facts constituting [his] wrongful act[s] or omission[s]
(sect 3406 subd (a)(1) italics added) before February 24 2009 He only asks the court to take
judicial notice of certain judicial records (Defendant Gregory Glenn Petersens Request for
Judicial Notice (Petersen RJN) p 1 23-26)
Even if the court could take judicial notice of the documents which defendant Petersen
has requested those documents do not establish the date of actual or constructive discovery ie
the date the statute of limitations commenced The documents are apparently offered to show (1)
the date of the adverse decision in Aaron (Petersen RJN Exh 7) September 3 2008 (2) the
dates when co-defendant Jackson DeMarco Tidus amp Peckenpaugh was substituted for Jackson
DeMarco Tidus Petersen amp Peckenpaugh as the attorneys for several hundred plaintiffs in that
case (id Exhs 2-5) and (3) the names of at least 119 plaintiffs who continued to be represented
by the Petersen Law Firm in that case (id Exh 6) But those facts do not establish when the
plaintiffs discovered the facts constituting the wrongful act or omission (sect 3406 subd (a))
c The Plaintiffs Have Alleged They Suffered Appreciable Harm Less Than a Year Before the Action Was Filed Ie When the City Capped Retiree Health Benefits in Reliance Upon SDPOA vSDeERS
With regard to the fourth element of their cause of action actual loss or damage
resulting from the attorneys negligence (Coscia v McKenna amp Cuneo supra 25 Ca14th at p
1199) the only damages alleged by the plaintiffs are those resulting from a cap on retiree health
7 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
benefits- a cap affecting police officers who have retired or will retire after July 1
2009-imposed by the City in reliance on adverse judicial decisions caused by the negligence of
the defendant attorneys (Complaint ~~ 21-2232 pp 34 7) Because those damages were
suffered less than a year before the complaint was filed or will be suffered prospectively as a
result of the cap no bar ofthe statute oflimitations is apparent on the face ofthe complaint
If defendant Petersen contends the plaintiffs sustained actual injury (sect 3406 subd
(a)(Iraquo more than a year before the action was filed he may allege that fact as an affirmative
defense and attempt to prove it at triaL
D There Are No Alleged or Judicially-Noticeable Facts from Which the Court May Ascertain the Date of Commencement of the Statute of Limitations
Defendant Petersen argues that the plaintiffs suffered actual injury no later than
September 32008 when the District Court granted summary judgment against (p]laintiffs on
their federal law claims and dismissed their state law claims without prejudice (RJN Exhs 7
8) Vhen [pJlaintiffs suffered actual injury Petersen was no longer representing them (RJN
Exhs2-6) (Petersen Dem p 109-11) (Id pp 10-11)
However even if the plaintiffs suffered actual injury on September 32008 the one-year
statute of limitations does not commence to run until the plaintiff discovers or through the use
of reasonable diligence should have discovered the facts constituting the wrongful act or
omission (sect 3406 subd (a)(1) Petersen Dem p 1019-21 [[d]iscovery for purposes of
triggering the commencement ofthe limitations period under [s]ection 3406 occurs when the
client discovered or should have discovered the facts giving rise to a cause of action for legal
malpractice])
A plaintiffs knowledge of an adverse judicial decision (which itself is not shown by any
of the documents of which judicial notice is requested) is not equivalent to knowledge of the
facts constituting the wrongful act or omission (sect 3406 subd (araquo Neither of the cases cited by
defendant Petersen lordache Enterprises Inc v Brobeck Phleger amp Harrison (1998) 18
Ca14th 739 and Adams v Paul (1995) 11 CalAth 583591 fn 5 (Petersen Dem pp 9-10)
holds that the statute of limitations for litigation malpractice commences to run upon the entry of
8 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
an adverse summary judgment or a clients knowledge of an adverse summary judgment Those
cases concern the meaning of actual injury (lordache at p 742 Adams at pp 585-586)6
Defendant Petersen mistakenly argues that [h]ere [p]laintiffs knew they had lost their
case in the District Court on September 3 2008 because their attorneys (the JDTP law firm) were
representing them and were present in court and the information is therefore imputed to
[p]laintiffs (lYfiller v Bechtel Corp (1983) 33 Ca13d 868 875[7]) (Petersen Dem pp 10-11)
First there is no allegation in the complaint that attorneys from the JDTP law firm were
present in court on Sept~mber 3 2008
Second and more importantly imputed knowledge of an adverse judicial ruling is not
equivalent to knowledge of facts constituting legal malpractice Needless to say not all adverse
judicial rulings are the result of legal malpractice In the vast majority of cases decided in our
system ofjustice the losing parties through no fault of their attorneys are simply not entitled to
prevail under the adjudicated facts or applicable laws In a small percentage ofcases including
this one the adverse ruling is a result of legal malpractice Occasionally adverse rulings can also
be the result ofjudicial or jury error A layperson cannot be assumed to know the true cause of
an adverse summary judgment
E If the Date of Commencement of the State of Limitations Cannot Be Ascertained the Existence of Non-Existence of Tolling for Continuous Representation Is Irrelevant
Even though defendant Petersen has not established the date of commencement of the
one-year statute of limitations he argues that the one-year statute of limitations was not tolled for
continuous representation under section 3406 subdivision (a)(2) because there is no dispute
that [his] representation of [p]laintiffs ceased in May 2008 (when they filed substitution of
6 In lordache [t]he client acknowledged it discovered its attorneys alleged malpractice more than one year before it commenced the action (lordache at p 743) In Adams the court reaffirm [ ed] that actual injury is generally a question of fact (Adams at p 593)
7 In Miller the court held that a plaintiff suing for fraud whose attorneys entertained serious doubts regarding the value attributed to stock in a prior property settlement agreement was chargeable with the information that a reasonable investigation would have revealed
9 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
middot10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
attorney forms naming the JDTP firm as their attorneys) (Petersen Dem p 11 14-16)8 (Id pp
11-13)
This no tolling argument is unavailing because it begs the question of when the statute
of limitations commenced While a substitution of attorneys may bear on whether the statutory
tolling provision for continuous representation (sect 3406 subd (a)(2)) applies it does not
commence the statute oflimitations applicable to a cause of action for the undiscovered legal
malpractice of the substituted attorney Moreover the documents sought to be judicially noticed
do not establish that all of the absent class members were represented by the JDTP firm after
May 2008 as defendant Petersen argues The tolling provision for continuous representation
would apply to preserve the claims of at least 119 absent class members whom defendant
Petersen continued to represent in Aaron (Petersen RJN Exh 6)
Defendant Petersen contends the present situation is somewhat analogous to Beal Bank
SSB v Arter amp Hadden LLP (2007) 42 Ca14th 50) (Petersen Dem p 11 17-18) (Id pp 11shy
12) In that case the Supreme Court held that when an attorney leaves a firm an takes a client
with him or her the tolling provision of section 3406 subdivision (a)(2) does not continue for
claims against the former firm and partners (Beal Bank SSBv Arter amp Hadden LLP (Beal
Bank) (2007) 42 CaL4th 503 50S) Defendant Peterson urges that holding should be extended
to apply to a materially different situation Here the plaintiffs were represented by a law firm
Jackson DeMarco Tidus Petersen amp Peckenpaugh Several individual attorneys employed by
the firm worked on the plaintiffs litigation matter Several of those attorneys left the firm but
did not take the plaintiffs litigation matter with them Defendant Petersen urges the court to
hold that the tolling provision for continuous representation should cease to apply to the
departing attorneys on the date they left the firm For several reasons the court need not and
should not decide that issue
First because the date of accrual of the plaintiffs legal malpractice action cannot even be
ascertained from the face of the complaint tolling of the statute of limitations is irrelevant at this
8 It does not appear that plaintiff Howard LaBore filed a substitution of attorneys in May of2008 as defendant Petersen argues (Petersen RJN Exhs 2-4)
10 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
2
3
4
5
6
7
8
9
lO
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
early stage of the lawsuit Second the facts of this case are materially different from Beal Bank
Vhen an attorney leaves a firm and takes a client with him or her the client is well aware that he
or she has no further attorney-client relation with the former firm and its attorneys9 However
when an attorney leaves a firm and does not take a client with him or her the cHent believes that
he or she is still being represented by the firm and its attorneys The client may not even know
that an attorney who previously worked on his or her case has departed the firm Law firms
frequently send out announcements to clients when new attorneys have joined as partners or
associates However they rarely send out announcements to clients when former partners or
associates have left the firm That is especially so if the reason for the attorneys departure was
the mishandling of the clients case The extension of Beal Bank proposed by defendant
Petersen ip which the statute oflimitations would resume upon an event (an attorneys departure
from the firm) unknown to the client would work a great hardship on uilknowing victims oflegal
malpractice It would disrupt the balance the Legislature struck between a plaintiffs interest in
pursuing a meritorious claim and the public policy interests in prompt assertion of known
claims (Beal Bank supra 42 CaL4th at p 512)
As the court well noted in Beal Bank attorneys have a fiduciary duty to disclose material
facts to their clients an obligation that includes disclosure of acts of malpractice [citation l (42
CalAth at p 514) Just as [f]ormer counsel are powerless to control whether current counsel
breach that obligation (ibid) current counsel are powerless to control whether former counsel
breach that obligation Here there is no allegation that former counsel (defendant Petersen) or
continuing counsel (Jackson DeMarco Tidus amp Peckenpaugh) ever advised the plaintiffs that
any act of malpractice had occurred (Complaintpassim) To the contrary the plaintiffs have
alleged that the defendants concealed their negligent acts and omissions from the plaintiffs
while continuing to represent and charge fees to the plaintiffs (Complaint ~ 31(g) p 7
9 As the court noted in Beal Bank supra 42 CaL4th at pp 511-512 When a lawyer leaves a firm and takes a client with him the firms representation of the client ceases There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case Conversely the firm loses all ability to mitigate any damage to the client [Citation] Nor is there any ongoing firm-client relationship to disrupt
11 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
5
10
15
20
25
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
cf sect 3406 subd (a)(3) [intentional conceal of malpractice tolls the four-year statute of
limitations) Under such egregious circumstances the continuous representation tolling
provision (sect 3406 subd (a)(2raquo should not be limited as defendant Petersen proposes
F Because the Complaint Was Filed Within a Year of the Accrual of the Plaintiffs Cause of Action It Is Not Time-Barred and the Affirmative Defense of the Statute of Limitations Must Be Raised by Answer
If defendant Petersen contends that plaintiffs (1) through the use of reasonable diligence
should have discovered the facts constituting [his] wrongful act or omission (sect 3406 subd (araquo
and (2) suffer[ed] appreciable and actual harm from th[at] malpractice (Samuels v Mix
supra 22 Ca14th at p 11) more than a year before the complaint was filed he must allege those
facts as an affirmative defense and prove those facts attrial (id at p 5) They are not apparent
from the face of the complaint or from ~atters of which the court may properly take judicial
notice
VI BECAUSE THE ATTORNEY-CLIENT PRIVILEGED HAS BEEN WAIVED BY THE FILING OF A LEGAL MALPRACTICE ACTION PETERSEN CAN DEFEND HIMSELF
A Under Evidence Code Section 958 There Is No Attorney-Client Privilege as to Communications Relevant to an Issue of Legal Malpractice
Evidence Code section 958 overlooked by Petersen (Petersen Dem pp 13-15)
provides
There is no privilege under this article as to a communication relevant to an issue of breach by the lawyer or the client of a duty arising out of the laYer-client relationship
Generally the filing of a legal malpractice action against ones attorney results in a waiver of
the privilege thus enabling the attorney to disclose to the extent necessary to defend the action
information otherwise protected by the attorney-client privilege (McDermott Will amp Emery v
Superior Court (McDermott) (2000) 83 CaLAppAth 378383-384 Pacific Tel amp Tel Co v
Fink (1956) 141 CalApp2d 332 335)
Thus as it relates to any privilege between Petersen and the plaintiffs it has been waived
and Petersen may disclose any such information in his defense
12 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
B Petersen May Disclose His Communications With All Members of the Class and Any of His Existing Clients Who Wish To Preserve the Privilege May Opt Out
Additionally if and when the Court grants a motion for class certification the privilege
will be waived as to those of the other approximately 1700 former Petersen clients who elect not
to opt out of the class Indeed any existing Petersen clients~ifthe Court certifies the class as to
them-may simply opt out of the class action
c Petersen Has Not Shown Why (1) Privileged Communications With Opt~Outs (If Any) Would Be Relevant Much Less Necessary To His Defense of the Claims of Class Members (2) the Extraordinary Step of Dismissing a Plaintiffs Claim is Warranted (3) the Court Should Skip the Required Consideration of Competing Interests or (4) This Qualifies as One of the Rarest of Cases in Which the Drastic Action of Dismissal Should Occur
As theCourt of Appeal for the Fourth Appellate District Division One recently well
explained in Dietz v A1eisenheimer amp Herron (Dietz) (2009) 177 CaLAppAth 771 794
the court may take the extraordinary step of dismissing a plaintiffs claim on the ground that an attorney-defendants due process right to present a defense is compromised by the defendants inability to present confidential information in support of that defense only in the rarest ofcases after the court has considered a number of factors (Italics added)
Not only does Petersen fail to cite or discuss this controlling law the factors are not present
First the evidence at issue must be the clients confidential information and the client
must be insisting that the information remain confidential (Dietz supra 177 CaLAppAth at p
792 italics added) Petersen has failed to make this showing
Second the confidential information at issue [must] be highly material to the
defendants defenses (Ibid) Again Petersen has not-and cannot-make this showing He
has not yet even filed an answer or asserted any defenses Further Petersen misstates the
plaintiffs claim (Petersen Dem p 15 5-6 [incorrectly stating that plaintiffs claim is based on
negligent advice in the underlying action]) and in conclusory fashion asserts this requires him to
disclose communications he had (and continues to have) with his clients (Jd p 156-7) Of
course the plaintiffs malpractice claim is based on Petersens litigation malpractice Le his
failure to present available evidence in SDPOA v SDCERS not on transactional advice he gave
13 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
And the malpractice occurred during a period in which Petersen represented plaintiffs and
approximately 1800 other police officers simultaneously The plaintiffs are informed and
believe that communications to this large group were accomplished by mass joint e-mail blasts
and web site postings Petersen has not shown he had private secret communications with only a
select few of his 1800 clients
Third before dismissing a case on due process grounds the trial court must determine
whether it is able to effectively use ad hoc measures from [its] equitable arsenal so as to
permit the action to proceed (Dietz supra 177 CalApp4th at p 793) Here the issue is not
even ripe because class certification-and the issue of whether present Petersen clients who lost
retiree health can be included in the class or whether they will simply opt out-has not yet
ansen
Fourth a trial court should consider whether it would be fundamentally unfair to allow
the action to proceed (Ibid) Fundamental fairness in this context is an extension of the
principle that the privilege which protects attorney-client communications may not be used both
as a sword and a shield [Citation] (Ibid) Nothing of that sort is occurring here The
plaintiffs acknowledge they have waived the attorney-client privilege by bringing this
malpractice action (Evid Code sect 958) Petersen is free to use all communications he had with
them to defend himself
[A] trial court is required to consider such competing interests before taking the drastic
action of dismissing a plaintiffs claim (Dietz supra 177 CalApp4th at p at p 791) By
failing to cite or discuss these factors Petersen has utterly failed to make a case for dismissal on
due process grounds
D The Cases on Which Petersen Relies Are Distinguishable
Finally the cases on which Petersen relies are distinguishable In General Dynamics
Corp v Superior Court (1994) 7 Ca14th 1164 (Petersen Dem p 13 18-19) the court held an
in-house attorney Andrew Rose could sue his employer for wTongful termination in violation of
public policy based on advice he provided to General Dynamics regarding overtime issues The
court stressed that trial courts should employ various equitable measures to enable attorney
14 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen
1
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
plaintiffs to bring such claims (Dietz supra 177 CalAppAth at p at p 787)
In McDermott supra 83 CalApp3d 378 (Petersen Dem pp 1322-146) the court dealt
with the unique issue presented by a derivative lawsuit for malpractice brought by shareholders
who were not the holder of the privilege [and therefore] do not effect a waiver of that privilege
merely by filing their action on the corporations behalf (d at p 380-381) This distinction
makes a derivative malpractice action far different from a direct malpractice action (Id at p
383)
In Solin v 0 Melveny amp lveyers LLP (2001) 89 CalAppAth 451 (Petersen Dem p
147-15) an attorney plaintiff Solin filed a malpractice action against a law firm he had retained
to obtain advice regarding representation of his clients (Id at p 453) In seeking this advice
Solin revealed confidential information to OMelveny that implicated his clients irt criminal
activities (Ibid) In the malpractice action the attorneys clients intervened and sought
dismissal of the malpractice action in order to avoid disclosure of privileged information
implicating them in criminal activities (Id at p 456) Moreover in its defense OMelveny
intended to offer in evidence handwritten notes drafted by one of its lawyers during the initial
meeting with Solin (Id at p 461) Because the clients assertion of the privilege precluded use
of this specific critical exculpatory evidence the court found that fundamental fairness was
violated (Id at p 463-464) Here no Petersen as not identified any potentially exculpatory
information and no client has sought to intervene to preclude Petersens use of this evidence
VII CONCLUSION
Based on the foregoing arguments and authorities Petersens demurrer should be
overruled 10
Dated July 12 2010 LAW OFFICE OF MICHAEL A CONGER
By (IlQ~Michael A Cor Attorney for the San Diego Police Officers Association
10 If the Court perceives any defect in the complaint plaintiffs formally request leave to amend
15 Plaintiffs Memorandum of Points and Authorities in Opposition to Demurrer of Gregory Glenn Petersen