Court Opinion

ID: 2653901
Source: CourtListenerOpinion
Date Created: 2014-02-21 01:01:15.105305+00
Date Added: 2024-06-11T12:57:53.995183
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             FEB 20 2014

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                      U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

GEORGE CLINTON, an individual                    No. 12-35791
resident of the State of Florida,
                                                 D.C. No. 2:11-cv-01142-RSL
               Plaintiff-counter-defendant -
Appellant,
                                                 MEMORANDUM*
  v.

HENDRICKS & LEWIS PLLC, a
Washington professional limited liability
company; OSCAR YALE LEWIS, Jr., an
individual resident of the State of
Washington,

               Defendants-counter-claimants
- Appellees.

                    Appeal from the United States District Court
                      for the Western District of Washington
                     Robert S. Lasnik, District Judge, Presiding

                      Argued and Submitted February 4, 2014
                               Seattle, Washington

Before: FISHER, GOULD, and CHRISTEN, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Plaintiff-Appellant George Clinton appeals district court orders (1) granting

Hendricks & Lewis’s (“H&L”) Federal Rule of Civil Procedure 12(b)(6) motion to

dismiss Clinton’s fraudulent inducement and negligent misrepresentation claims,

and (2) granting H&L’s motion for summary judgment on Clinton’s legal

malpractice and declaratory relief claims.1 We have jurisdiction under 28 U.S.C.

§ 1291, and we affirm.

      In May 2005, Clinton retained H&L to represent him in civil litigation to

recover ownership rights in some of his music recordings. The parties executed a

written contract that included an arbitration clause that read in part, “if any dispute

should arise between you and us regarding the amount of the fees or costs due to us

under the terms of this agreement, the exclusive means of resolving the dispute

shall be by submission to binding arbitration.” Clinton did not pay his bills, and

H&L terminated the relationship in August 2008.

      In subsequent arbitration proceedings, H&L sought more than $1.5 million

in unpaid legal fees. Clinton failed to assert affirmative defenses or counterclaims

during arbitration, and he elected not to attend the arbitration hearing, which

      1
         Clinton also appears to appeal the district court’s order denying his motion
to dismiss H&L’s counterclaims seeking payment on a judgment debt. Because
the district court severed those counterclaims from this case and consolidated and
merged them with a different case, however, we dismiss Clinton’s appeal on this
issue for lack of appellate jurisdiction.

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resulted in an award to H&L of nearly $1.7 million. United States District Judge

John Coughenour confirmed the arbitration award in May 2010.

      Later, Clinton sought (1) a declaration that only fee-related disputes were

subject to arbitration, and (2) more than $10 million in damages for legal

malpractice and professional negligence (together “legal malpractice”), as well as

fraudulent inducement and negligent misrepresentation.

      The district court dismissed Clinton’s fraudulent inducement and negligent

misrepresentation claims on the theory that they were barred by res judicata. The

district court also granted summary judgment to H&L on Clinton’s legal

malpractice claim, reasoning that California law—and its one-year statute of

limitations—applied to bar Clinton’s claim. See Cal. Civ. Proc. Code § 340.6.2

Finally, the district court denied as moot Clinton’s request for a declaration

regarding the scope of the arbitration agreement. This appeal followed.

      We review de novo district court orders granting or denying Rule 12(b)(6)

motions to dismiss, construing all facts in the light most favorable to the

nonmoving party. See Davis v. HSBC Bank Nev., 691 F.3d 1152, 1159 (9th Cir.

2012). Similarly, we review de novo a district court’s grant of a motion for

      2
       Washington law, by contrast, has a three-year statute of limitations for
legal malpractice claims. See Cawdrey v. Hanson Baker Ludlow Drumheller, 120
P.3d 605, 608 (Wash. Ct. App. 2005).

                                           3
summary judgment to determine whether, viewing the evidence in the light most

favorable to the nonmoving party, there exist any genuine issues of material fact

and whether the district court correctly applied the substantive law. Cameron v.

Craig, 713 F.3d 1012, 1018 (9th Cir. 2013).

      Because Clinton’s fraudulent inducement and negligent misrepresentation

claims challenge the validity of the underlying retainer agreement—rather than the

validity of the arbitration clause itself—they were arbitrable. See, e.g., Buckeye

Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006) (“[A] challenge to the

validity of the contract as a whole, and not specifically to the arbitration clause,

must go to the arbitrator.”); ATSA of Cal., Inc. v. Cont’l Ins. Co., 702 F.2d 172,

175 (9th Cir. 1983) (“[W]hen parties agree to submit disputes to arbitration, it is

presumed that the arbitrator will be authorized to determine all issues of law and

fact necessary to resolve the dispute.”), amended by 754 F.2d 1394 (9th Cir. 1985).

Because arbitration decisions have preclusive effect, see Clark v. Bear Stearns &

Co., 966 F.2d 1318, 1321 (9th Cir. 1992), Clinton’s failure to raise those claims at

arbitration bars him from raising them here, see Allen v. McCurry, 449 U.S. 90, 94

(1980) (holding that under res judicata, parties may not “relitigat[e] issues that

were or could have been raised” in a prior action (emphasis added)). As the

district court properly concluded, the arbitration award “necessarily presumed the

                                           4
validity and enforceability” of the retainer agreement—an agreement that Clinton

may not now collaterally attack.

      Clinton’s legal malpractice claim seeks damages for alleged harms

stemming from H&L’s work on cases that were litigated in California and which

arose under California law. Moreover, Clinton seeks punitive damages and

prejudgment interest, both of which are prohibited in Washington but permitted in

California. Thus, while the attorney-client relationship in this case may have

originated in Washington, the specific legal work that Clinton challenges occurred

in California. As such, California has the “most significant relationship to the

action,” and it is California’s one-year statute of limitations on legal malpractice

claims that applies. FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings,

Inc., 309 P.3d 555, 563 (Wash. Ct. App. 2013); see also Cal. Civ. Proc. Code

§ 340.6.

      The limitations period began to run on Clinton’s legal malpractice claim no

later than September 15, 2008, when the Central District of California entered

judgment against Clinton in one of the actions in which he was previously

represented by H&L. See Jordache Enters., Inc. v. Brobeck, Phleger & Harrison,

958 P.2d 1062, 1071 (Cal. 1998). When Clinton filed his legal malpractice claim

                                           5
on July 11, 2011, then, it was nearly two years too late in light of California’s one-

year statute of limitations for such claims.3

      Finally, without a substantive claim regarding the original retainer

agreement, there is no live controversy between the parties, and Clinton’s request

for declaratory relief is moot. See Pub. Utils. Comm’n v. FERC, 100 F.3d 1451,

1459 (9th Cir. 1996).

      AFFIRMED in part, DISMISSED in part.

      3
        Because we affirm the district court’s grant of summary judgment to H&L
on the ground that the California statute of limitations applies to time-bar Clinton’s
legal malpractice claim, we need not consider the district court’s application of the
doctrine of judicial estoppel.

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