Legal Ethics Corner

Ethics Corner is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

Legal Malpractice: An Overview On When The Limitation Period Commences to Run

When does the statute of limitation on attorney malpractice begin to run?

CCP § 340.6 states that an action “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... .”

The statute allows for a tolling during the time that the “the plaintiff has not sustained actual injury.”  (CCP 340.6 (a) (1)  What constitutes “actual injury” that would operate to end the tolling period?  In Jordache Enterprises, Inc. v. Brobeck Phleger & Harrison (1998) 18 Cal.4th 739, the California Supreme Court held that “a cause of action for legal malpractice accrues when the client sustains actual injury and discovers, or reasonably should have discovered, his or her cause of action.”  Attorney defendants have long relied on Jordache to contend that the statute commences when the former client incurs attorneys’ fees to a new lawyer.

However, the Second District Court of Appeal recently held in Shifren v. Spiro (2012) 206 Cal.App.4th 481 that Jordache doesn’t create a “bright line” rule in this regard, and that “events must have developed to a point where plaintiff is entitled to a legal remedy, rather than a symbolic judgment.”  Shifren interprets the Jordache court’s ruling to allow that the determination of actual injury sometimes is dependent upon the outcome of the underlying litigation, because only when an adverse ruling is rendered is there a basis for a sustainable professional negligence case.  Shifren focuses its interpretation on two exceptions noted in Jordache:  Sirott v. Latts (1992) 6 Cal.App.4th 923; and Baltins v. James (1995) 36 Cal.App. 4 1193.

Also important in the determination of when the statute begins is not discovery of the fact that he attorneys’ acts or omissions fell below the standard of care.  Instead, discovery of the facts constituting the wrongful act or omission determines whether or not the statute has been triggered 

Consider the situation where a client hires an attorney to draft an agreement.  The client is later involved in litigation with the other party.  The client’s new attorney discovers that there could be a problem enforcing the agreement due to the lack of a critical term.  The new attorney is charged with advising the client both about this problem, and that the former attorney’s failure to include the term may be malpractice.  At least, the new attorney should refer the client to independent counsel for the purpose of assessing whether or not the failure to include the critical term in the contract fell below the standard of care.  The triggering event for the commencement of the statute of limitation period is not necessarily the final outcome of the dispute, but is instead learning of the fact that the agreement may not be enforceable.  Uncertainty as to the amount of damages doesn’t toll the limitation period.

 Best practice and a warning:  A client should not wait to either file a malpractice suit or to consult with independent counsel about the possibility of a prior attorneys’ negligence.  If a subsequent attorney doesn’t raise the potential issue to his or her client of legal malpractice by a prior attorney, the subsequent attorney could be responsible for the previous attorney’s negligence.

-Deborah Wolfe

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**