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Filed 6/25/15 Certified for Publication 7/21/15 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

SHAOXING CITY MAOLONG 

WUZHONG DOWN PRODUCTS, LTD. 

et al.,

Plaintiffs and Appellants,

v.

KEEHN & ASSOCIATES, APC et al.,

Defendants and Respondents.

 B256988

 (Los Angeles County

 Super. Ct. No. BC455229)

APPEAL from a judgment of the Superior Court of Los Angeles County. 

Rolf M. Treu. Affirmed.

Timothy D. McGonigle for Plaintiffs and Appellants.

Petit Kohn Ingrassia & Lutz, Douglas A. Pettit, Valerie G. Hong, and 

Matthew C. Smith, for Defendants and Respondents.

* * * * * *
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A creditor retained attorneys to challenge another creditor‟s lien after the debtor 

declared bankruptcy. After the first creditor‟s attorneys missed the deadline to 

investigate and attack the lien, that creditor hired new counsel and entered into a 

settlement with the debtor for less than the full amount of its debt. The creditor sued the 

first attorneys for malpractice, and filed suit less than one year after the settlement but 

more than one year after the missed deadline. The trial court granted summary judgment 

to the attorneys, concluding that the lawsuit was untimely as a matter of law. We 

conclude this was correct, and affirm.

FACTS AND PROCEDURAL HISTORY

An arbitrator determined that plaintiffs Shaoxing City Maolong Wuzhong Down 

Products, Ltd. (Shaoxing) and Shui Yan Cheng‟s (Cheng) (collectively, plaintiffs) were 

entitled to a total of $5.35 million from Aeolus Down, Inc. (Aeolus), Wei Xu, and Wei 

Dong (collectively, debtors). After the arbitrator issued its tentative ruling but before 

plaintiffs obtained a judgment confirming the arbitration award, Aeolus entered into a 

security agreement with Zhejiang Hengdi Bedding Co., Ltd. And Zhejiang Liuqiao 

Feather Co., Ltd. (collectively, Zhejiang), and Zhejiang filed a blanket lien attaching to 

all of Aeolus‟s assets. 

Soon after plaintiffs obtained the judgment, debtors filed for bankruptcy. 

Plaintiffs hired defendants Keehn & Associates and L. Scott Keehn (collectively, Keehn) 

as counsel in order to obtain discovery and challenge Zhejiang‟s lien as a fraudulent 

transfer. Pursuant to a stipulation of the parties, the bankruptcy court ordered that all 

discovery and any challenges pertaining to Zhejiang‟s lien be filed by an “Investigation 

Termination Date” of October 7, 2009. The deadline came and went without Keehn 

completing its discovery or filing any challenge to Zhejiang‟s lien. On November 10, 

2009, the bankruptcy court denied Keehn‟s post-deadline request to retroactively extend 

the deadline. 

Within weeks, plaintiffs retained Landsberg and Associates and Ian Landsberg 

(collectively, Landsberg) and formally substituted Landsberg for Keehn as their 
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bankruptcy counsel. With Landsberg as counsel of record, plaintiffs engaged in 

mediation with debtors and, on February 22, 2010, ultimately agreed to accept $3.75 

million—$1.6 million less than the arbitration award. 

On February 18, 2011, plaintiffs sued Keehn and Landsberg for malpractice. Each 

set of defendants moved for summary judgment, and the trial court granted those 

motions.

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With respect to Keehn, the trial court held that plaintiffs‟ lawsuit was untimely 

as a matter of law because it was filed more than one year after the bankruptcy court 

ruled that plaintiffs lost their right to challenge the Zhejiang lien. The court also rejected 

plaintiffs‟ argument that the limitations period was tolled due to Keehn‟s continued 

representation of them after substituting out as counsel. 

Plaintiffs timely appeal. 

DISCUSSION

We independently review whether the trial court properly granted summary 

judgment due to the absence of any triable issue of material fact. (Code Civ. Proc.,

§ 437c.)

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 In doing so, we liberally construe the evidence in support of the party opposing 

the motion, and resolve doubts against summary judgment and in favor of trial. (Ibid.; 

Mt. Hawley Insurance Co. v. Lopez (2013) 215 Cal.App.4th 1385, 1393-1394.)

A claim for legal malpractice is timely only if filed “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,” and in no event more than “four years 

from the date of the wrongful act or omission.” (§ 340.6, subd. (a).) This period is tolled 

if, among other reasons, (1) “[t]he plaintiff has not sustained actual injury” 

(§ 340.6, subd. (a)(1)), or (2) “[t]he attorney continues to represent the plaintiff regarding 

the specific subject matter in which the alleged wrongful act or omission occurred” 

 

1 Plaintiffs separately appealed the order granting summary judgment for 

Landsberg. See B257823.

2 All further statutory references are to the Code of Civil Procedure unless otherwise 

indicated.
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(§ 340.6, subd. (a)(2)). (See Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison

(1998) 18 Cal.4th 739, 742-743 (Jordache).)

Plaintiffs do not dispute that they discovered Keehn‟s negligence more than one 

year before filing this action. Instead, they assert that there are triable issues of fact as to 

whether the statutory period was tolled under each of the two bases for tolling cited 

above.

I. Actual Injury

Plaintiffs argue that the trial court erred in granting summary judgment because 

they were not actually injured until the mediation concluded with an award that was $1.6 

million less than they were owed (such that their lawsuit was timely filed within one year 

of that date). Keehn responds that plaintiffs were actually injured either (1) when they 

lost their right to challenge Zhejiang‟s lien, or (2) when plaintiffs starting paying 

Landsberg fees to try to repair the damage caused by Keehn‟s alleged malpractice (see 

Budd v. Nixen (1971) 6 Cal.3d 195, 201 [malpractice plaintiff injured when he pays 

attorneys fees to new counsel], superseded on other grounds by § 340.6; Truong v. 

Glasser (2009) 181 Cal.App.4th 102, 115 [“Plaintiffs first sustained actual injury when 

they obtained and were obligated to pay new counsel to file a lawsuit seeking to escape 

the consequences of [the earlier, alleged malpractice].”]). Because Keehn adduced no 

evidence as to when plaintiffs incurred attorneys fees for Landsberg‟s work, the propriety 

of the trial court‟s summary judgment ruling turns on whether plaintiffs were actually 

injured when they lost their right to challenge Zhejiang‟s lien or instead when they settled 

for less than the full amount of their debt.

For purposes of section 340.6, “[a]ctual injury occurs when the client suffers any 

loss or injury legally cognizable as damages in a legal malpractice action based on the

asserted errors or omissions.” (Jordache, supra, 18 Cal.4th at p. 743.) What matters is 

“discovery of the fact of damage, not the amount.” (Laird v. Blacker (1992) 2 Cal.4th 

606, 612 (Laird); Jordache, at p. 752 [“once the plaintiff suffers actual harm . . . 

uncertainty as to the[] amount of damages” does not toll limitations period].) As long as 
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that amount is more than nominal (Jordache, at p. 752; Adams v. Paul (1995) 11 Cal.4th 

583, 589 (lead opn. of Arabian, J.)), actual injury exists even if the client has yet to 

“sustain[] all, or even the greater part, of the damages occasioned by his attorney‟s 

negligence” (Budd, supra, 6 Cal.3d at p. 201); even if the client will encounter “difficulty 

in proving damages” (Jordache, at p. 752); and even if that damage might be mitigated or 

entirely eliminated in the future (Laird, at p. 614 [possibility of relief on appeal does not 

eliminate “actual injury”]; Jordache, at p. 754 [“an existing injury is not contingent or 

speculative simply because future events may affect its permanency . . .”]; 

Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 227 [same] (Foxborough); cf. Laird, 

at p. 616 [confirming that injury need not be “„irremediable‟” to be “actual”]).

However, “actual injury” does not include “speculative and contingent 

injuries . . . that do not yet exist . . . .” (Jordache, supra, 18 Cal.4th at p. 754; Adams, 

supra, 11 Cal.4th at p. 590 (lead opn. of Arabian, J.) [actual injury does not exist where 

“the attorney‟s negligence may have created only the potential for future harm”]; see 

International Engine Parts v. Fedderson & Co. (1995) 9 Cal.4th 606, 612 [tax 

examiner‟s proposed findings regarding tax deficiency are too speculative to constitute 

“actual injury” arising from accountant malpractice because findings were only proposed 

and were issued “prior to any determination of tax deficiency”].) 

We are consequently tasked with “distinguish[ing] between an actual, existing 

injury that might be remedied or reduced in the future, and a speculative or contingent 

injury that might or might not arise in the future.” (Jordache, supra, 18 Cal.4th at 

p. 754.)

The undisputed facts point to the conclusion that the plaintiffs were actually 

injured no later than November 10, 2009, for two reasons. First, that was the date upon 

which the bankruptcy court definitively confirmed that plaintiffs lost their right to 

challenge the Zhejiang lien. “The loss or diminution of a right or remedy constitutes 

injury or damage.” (Jordache, supra, 18 Cal.4th at p. 744; accord, Adams, supra, 11 

Cal.4th at pp. 591-592 (lead opn. of Arabian, J.).) Any uncertainty as to whether the 
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Investigation Termination Date might be waived or extended (cf. Adams, at p. 598 (conc.

opn. of Kennard, J.) was dispelled when the debtor opposed plaintiffs‟ motion to extend 

the deadline and the bankruptcy court denied that motion and thereby cut off plaintiffs‟ 

right to challenge the Zhejiang lien.

Second, and relatedly, the absence of a pending challenge to the Zhejiang lien 

substantially weakened plaintiffs‟ negotiating position in the ensuing mediation, and the 

“los[s]” of “considerable settlement value” also constitutes “actual injury.” (Laird, 

supra, 2 Cal.4th at p. 615; accord, Jordache, supra, 18 Cal.4th at pp. 743-744.) A litigant 

who seeks to enforce a lien in bankruptcy court suffers actual injury when its negotiating 

position is weakened by a bankruptcy trustee‟s comment that the lien may not be 

enforceable. (Village Nurseries v. Greenbaum (2002) 101 Cal.App.4th 26, 41-42 

(Village Nurseries).) A litigant—like plaintiffs here—who seeks to challenge a lien in 

bankruptcy court faces just as much, if not more, of a weakened negotiating position 

when a bankruptcy judge definitively rules that any challenge to that lien is procedurally 

barred. 

Plaintiffs raise three further arguments. They contend that the question of actual 

injury “raises an issue of fact” (Budd, supra, 6 Cal.3d at p. 198), and questions of fact are 

ill suited for resolution on summary judgment. But where, as here, the “material facts are 

undisputed, the trial court can resolve the matter [of actual injury] as a question of law in 

conformity with summary judgment principles.” (Jordache, supra, 18 Cal.4th at p. 751; 

Village Nurseries, supra, 101 Cal.App.4th at p. 40.) Plaintiffs also point us to 

Tchorbadjian v. Western Home Ins. Co. (1995) 39 Cal.App.4th 1211, 1219 for the 

proposition that “[t]he actual injury occurs in litigation malpractice when the malpractice 

results in an adverse judgment or settlement in the underlying action.” But Tchorbadjian

did not involve the loss of a right or remedy preceding a judgment or settlement; in such 

cases, and consonant with the authority cited above, “[t]here is no requirement that an 

adjudication or settlement must first confirm a causal nexus between the attorney‟s error 

and the asserted injury.” (Jordache, at p. 752.) At oral argument, plaintiffs argued that 
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they did not subjectively believe that they had suffered actual injury because Landsberg 

assured them that they could attack the lien notwithstanding the bankruptcy court‟s 

definitive ruling to the contrary. But subjective belief is irrelevant to the question of 

whether actual injury has been sustained. (Britton v. Girardi (2015) 235 Cal.App.4th 

721, 733 [in assessing actual injury, “the fact of injury or damage need not be recognized 

or noticed by the plaintiff.”].)

The trial court correctly decided that plaintiff‟s malpractice claim was not tolled 

until the completion of the mediation.

II. Continued Representation By Keehn

Plaintiffs alternatively argue that their malpractice claim was tolled—and 

ostensibly remains tolled today—because one of Keehn‟s employees told someone 

working for Landsberg‟s co-counsel that Keehn “would definitely continue to oversee the 

transition of the case to Mr. Landsberg, and assist the new attorney (meaning Landsberg) 

with his work on the case.” 

A plaintiff who is aware of, and has been actually injured by, attorney malpractice 

in a matter need not file suit for malpractice while that attorney is still representing him 

on the same “specific subject matter.” (§ 340.6, subd. (a)(2); Truong, supra, 181 

Cal.App.4th at p. 116; cf. Foxborough, supra, 26 Cal.App.4th at pp. 228-229 [no tolling 

where “an attorney‟s subsequent role is only tangentially related to the legal 

representation the attorney provided to the plaintiff”].) In deciding whether an attorney 

continues to represent a client, we do not focus “on the client‟s subjective beliefs”; 

instead, we objectively examine “„evidence of an ongoing mutual relationship and of 

activities in furtherance of the relationship.‟” (Truong, supra, 181 Cal.App.4th at p. 116, 

quoting Worthington v. Rusconi (1994) 29 Cal.App.4th 1488, 1498; Lockley v. Law 

Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 887.)

Where an attorney unilaterally withdraws or abandons his client, “the 

representation ends when the client actually has or reasonably should have no expectation 

that the attorney will provide legal services.” (Gonzalez v. Kalu (2006) 140 Cal.App.4th 
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21, 30 (Gonzalez).) But where, as here, the attorney has been formally substituted out as 

counsel, that act of substitution ordinarily ends the relationship (id. at p. 28; accord, 

Laclette v. Galindo (2010) 184 Cal.App.4th 919, 927; Gurkewitz v. Haberman (1982) 

137 Cal.App.3d 328, 332-333 (Gurkewitz)), although the relationship can continue—

notwithstanding the withdrawal and substitution—if the objective evidence shows that 

the attorney continues to provide legal advice or services (Nielsen v. Beck (2007) 157 

Cal.App.4th 1041, 1052 (Nielsen)).

In this case, the undisputed evidence establishes that plaintiffs‟ relationship with 

Keehn ended when Landsberg substituted in as counsel. The sole evidence of a 

continuing relationship after that point in time is the statement of a Keehn employee that 

Keehn would “oversee the transition” and “assist” Landsberg “with his work on the 

case.” Whether or not this statement is hearsay when recounted under oath by plaintiff 

Cheng (who heard the statement from co-counsel‟s employee), it was also recounted 

under oath by co-counsel‟s employee herself and is not hearsay when presented through 

her.

However, this statement alone does not establish a continuing attorney-client 

relationship. Assisting the transition from one attorney to another is not providing 

assistance on the same subject matter. (Foxborough, supra, 26 Cal.App.4th at pp. 228-

229; Gurkewitz, supra, 137 Cal.App.3d at p. 334.) And the undisputed evidence—as 

well as counsel‟s concession at oral argument—establishes that Keehn provided no legal 

services or representation after Keehn was substituted out as counsel. It is undisputed 

that Keehn provided no advice to plaintiffs or to Landsberg; they performed no work for 

them; they sent no bills for legal services relating to ongoing representation; they never 

appeared for plaintiffs and never negotiated on plaintiffs‟ behalf; they never even spoke 

or communicated with Landsberg or plaintiffs regarding the pending bankruptcy case. 

Such acts are required for there to be a continuing attorney-client relationship. (See 

Gurkewitz, at p. 334 [negotiating on behalf of client]; Nielsen, supra, 157 Cal.App.4th at 
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p. 1052 [providing legal advice to client on same matter]; O’Neill v. Tichy (1993) 19 

Cal.App.4th 114, 121 [billing client for work on same matter].) 

Because “there was no evidence that the attorney had taken any steps on behalf of 

the client” (Truong, supra, 181 Cal.App.4th at p. 117), the isolated statement of one of 

Keehn‟s attorneys following Keehn‟s withdrawal and substitution is insufficient as a 

matter of law to constitute continued representation. 

In sum, the one-year statute of limitations began to run on November 10, 2009, 

and had expired by the time plaintiffs filed their lawsuit in February 2011.

DISPOSITION

The judgment in favor of Keehn is affirmed. Keehn is entitled to costs on appeal.

_______________________, J. 

 HOFFSTADT

We concur:

____________________________, P. J.

 BOREN

____________________________, J.

CHAVEZ
Filed 7/21/15

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

SHAOXING CITY MAOLONG 

WUZHONG DOWN PRODUCTS, LTD. 

et al.,

Plaintiffs and Appellants,

v.

KEEHN & ASSOCIATES APC et al.,

Defendants and Respondents.

 B256988

 (Los Angeles County

 Super. Ct. No. BC455229)

 ORDER CERTIFYING OPINION 

FOR PUBLICATION

 

THE COURT:

The opinion in the above-entitled matter filed on June 25, 2015, was not certified 

for publication in the Official Reports. For good cause it now appears that the opinion

should be published in the Official Reports and it is so ordered.

 

 BOREN, P. J. HOFFSTADT, J.