Court Opinion

ID: 9546917
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:37:57.47648+00
Date Added: 2024-06-11T15:17:01.971044
License: Public Domain

MOSK, J.
I dissent. For the reasons stated below, consistent with case law and legislative intent, I believe the requirement of “actual injury” in Code of Civil Procedure section 340.6 (hereafter section 340.6) is intended to toll the limitations period for filing legal malpractice actions when, as here, a client takes an appeal of right from the underlying judgment and is awaiting its outcome. The majority’s construction of the statute forces litigants to file malpractice actions—and attorneys to defend such actions—without knowing whether the case on which the claim of malpractice is based will be won or lost. This interpretation helps neither the client nor the overburdened judicial system.
The majority err in declaring (maj. opn., ante, p. 620) that section 340.6 is “clear on its face.” A statute that is clear on its face does not require a lengthy opinion to expound its meaning, nor does it generate the varying interpretations seen in the case law. On the contrary, the phrase “actual injury” in section 340.6 is not self-explanatory, as noted by the State Bar in a prescient letter to the Governor. (Letter of Edward Rubin, Pres, of State Bar, Sept. 13, 1977, warning that the phrase was ambiguous and would lead to litigation.)
The first step in our analysis is to acknowledge that “actual injury” is not self-defining. Then we must look to the rest of the statute to ascertain the phrase’s meaning contextually. Next, an examination of the legislative history and the case law is instructive. Finally, I would test the conclusion in the crucible of practicality.

Statutory Scheme

Insofar as relevant here, the statute prescribes that two elements must be met before the limitation period runs: first, the client must discover the malpractice; second, even after the malpractice is discovered, the period is tolled until there is “actual injury.” I emphasize this point because it is important: a client cannot reasonably be expected to commence a lawsuit against the attorney every time the attorney errs; thus, even after the error is discovered, section 340.6 allows the client to wait until the requisite injury is suffered. An analysis of “actual injury” that focuses, as the majority’s does, on discovery of the cause of action is inconsistent with the statutory scheme.
*622The majority further err in their assumption that the “continuous representation” rule resolves the dilemma before us. The implication appears to be that if the actual injury-tolling provision were intended to encompass the pursuit of an appeal of right, the continuous representation rule would be unnecessary. This leap of faith lacks basis. The continuous representation rule serves several purposes. As the majority point out (maj. opn., ante, p. 618), quoting from the Senate Judiciary Committee Report, it enables “ ‘the attorney to correct or minimize an apparent error.’ ” However, the quotation goes on to observe that the rule also serves other purposes, such as preventing “ ‘an attorney from defeating a malpractice cause of action by continuing to represent the client until the statutory period has expired.’ ”
For the majority, this quotation from the Senate Judiciary Committee Report somehow leads to its unsupported conclusion that the Legislature “clearly intended the limitations period should not be extended beyond final judgment when continuous representation was not an issue.” (Maj. opn., ante, p. 618.) Nowhere in the legislative history is such an intention even hinted at, let alone made clear.

Legislative History

The majority contend that the legislative history of section 340.6 clearly resolves the present issue. This, unfortunately, is not the case. The legislative history neither discusses nor defines “actual injury”; the majority’s “clear” answer is nothing more than its own gratuitous construction of an ambiguous statute.
As observed above: section 340.6 does not provide, on its face or in its legislative history, a definition of “actual injury.” Thus, I turn to the policies behind the statute’s enactment.
The legislative record reveals that Assembly Bill No. 298 (1977-1978 Reg. Sess.), which led to section 340.6, was intended to codify existing case law, including Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176 [98 Cal.Rptr. 837, 491 P.2d 421], and Budd v. Nixen (1971) 6 Cal.3d 195 [98 Cal.Rptr. 849, 491 P.2d 433]. The bill digest quoted from Neel, supra, 6 Cal.3d at page 192: “ ‘when an attorney raises the statute of limitations to occlude a client’s action before that client has had a reasonable opportunity to bring suit, the resulting ban of the action not only starkly works an injustice upon the client but partially impugns the very integrity of the legal profession.’ ”
The Legislature recognized the importance of fairness to malpractice plaintiffs, both for its own merit and for the legal profession’s integrity. The *623bill thus sought to accommodate both the client’s “reasonable opportunity to bring suit” and the need to avoid stale claims, which underlies every statute of limitations.

Case Law

In direct contradiction to the majority’s holding, California courts confronted with a client who has pursued an appeal of right from the underlying judgment have interpreted “actual injury” to toll the limitation period until the resolution of that appeal. Cases on which the majority rely are not on point, either because there was no appeal of right or because the appeal was not pursued.
The majority rely on a dictum in Budd v. Nixen, supra, 6 Cal.3d 195, a case preceding the adoption of section 340.6 that was based on an entirely different statute. Budd declared that in general a litigant suffers actual damage on entry of an adverse judgment. The majority seek to read into this generalization an unbending rule equating actual injury with judgment. In Budd, unlike the present case, the client did not timely pursue his appeal of right; we wisely left room for situations, not posed by the case then before us, in which actual injury and judgment may not be synonymous.
The case law interpreting section 340.6 finds no actual injury pending resolution of an appeal of right taken from the judgment on which the malpractice is based. Robinson v. McGinn (1987) 195 Cal.App.3d 66 [240 Cal.Rptr. 423] is directly in point. There a police officer injured on the job retained the defendant attorney to represent him in several matters, including a disability pension claim. When sued for malpractice, the attorney raised the bar of section 340.6. The Court of Appeal held that the limitation period was tolled until the city decided the client’s administrative appeal of right. The client’s awareness of the potential malpractice claim did not automatically start the limitation period running absent the requisite injury, nor was there actual injury while an appeal of right, actually pursued, was pending. (195 Cal.App.3d at p. 75.)
In the recent case of Troche v. Daley (1990) 217 Cal.App.3d 403 [266 Cal.Rptr. 34], on which the majority mistakenly rely, there was no appeal of right; thus under my proposed construction the limitation period would not have been tolled. There the client was apparently unable or unwilling to pay the requisite fees to appeal and could not get the appeal certified as nonfrivolous in order to appeal, under the governing federal law, in forma pauperis. The Court of Appeal held there was actual injury when the client’s underlying federal lawsuit was dismissed because of the alleged negligence of her *624attorney. Her unsuccessful attempts to appeal did not affect the date of actual injury. (Id. at p. 411.) The court did not discuss the issue whether an appeal in forma pauperis should be considered an appeal of right when, rather than being entitled to it, the litigant was required under federal law to have the appeal certified as nonffivolous.
Similarly, in Turley v. Wooldridge (1991) 230 Cal.App.3d 586 [281 Cal.Rptr. 441], although there was an appeal of right, the court refused to toll the limitation period because the client did not pursue that appeal. While not foreclosing the possibility that a pending appeal may prevent a finding of actual injury, the Court of Appeal refused to hold the limitation period was tolled when the litigant had not actually pursued her appeal. (Id. at p. 593.)1
Indeed, the majority’s reliance on Turley v. Wooldridge, supra, 230 Cal.App.3d 586, is inexplicable, as that case strongly supports my position. Contrasting its situation with that of Robinson v. McGinn, supra, 195 Cal.App.3d 66, the Turley court reiterated that the statute was properly tolled in Robinson because the client there had pursued his administrative appeal of right. (230 Cal.App.3d at p. 593.) By contrast, the court stressed that “Turley did not pursue any of the legal or equitable remedies available to her to challenge the purportedly unfair Agreement terms.” (Ibid.) Thus, the Turley court construed “actual injury” precisely as I propose.
In the recent case of Worton v. Worton (1991) 234 Cal.App.3d 1638 [286 Cal.Rptr. 410], no postjudgment motion or appeal was actually filed, although the client had the right to do so. I fully agree that the statute should not be tolled unless an appeal is actually pursued. The majority in Worton held that “[t]he availability of an appeal from a judgment in a civil action does not make ‘remediable’ the harm the client sustained upon entry of the judgment for purposes of tolling the statute of limitation for legal malpractice.” (Id. at p. 1652.) Justice Johnson concurred in the judgment, but pointed out (citing Robinson v. McGinn, supra, 195 Cal.App.3d 66) that although the mere availability of an appeal should not preclude a finding of actual injury (234 Cal.App.3d at p. 1653), once an appeal is taken there is no actual injury until it is resolved.
Many of the out-of-state decisions upon which the majority rely construe statutes of limitation unlike our own. Again, the majority fail to realize that *625our statute contains two distinct requirements: discovery and actual injury. Many states’ statutes of limitation begin running when the client discovers the malpractice regardless of “actual injury.” For example, in Belden v. Emmerman (1990) 203 Ill.App.3d 265, 148 Ill. Dec. 583 [560 N.E.2d 1180, 1182-1183], on which the majority rely, the court analyzed the running of the statute by looking solely at the clients’ knowledge of the damages caused by the alleged malpractice. It held the statute began running before the resolution of the appeal from the underlying action because “the element of damage was known or should have been known to plaintiffs . . . .” (Id. at p. 1183.)
That may be the law in Illinois as held by its intermediate appellate court, but it is only half the law in California; if we subsume the actual-injury inquiry into the separate question of when the client discovered or should have discovered the alleged negligence, we directly contradict the language of section 340.6. Similarly, in the Indiana intermediate appellate court case of Basinger v. Sullivan (Ind.Ct.App. 1989) 540 N.E.2d 91, 93, also cited by the majority, the court stated: “By its terminology the statute [of limitations] commences to run when the cause of action is complete.”
Contrast the foregoing with our statute. A cause of action for legal malpractice, like any negligence action, requires negligence, causation, and damages. Yet the presence of those three elements alone does not cause the statute of limitations in section 340.6 to run. A fourth element, actual injury, above and beyond the substantive requirements of the tort, is required. Thus, the analyses in the intermediate appellate courts in Illinois and Indiana fall short of what is required in California.
Other cases relied on by the majority also construe statutes distinguishable from our own. For example, in Hayden v. Green (1988) 431 Mich. 878 [429 N.W.2d 604], the statute began running when the attorney no longer represented the client or when the client discovered the claim. In Jankowski v. Taylor, Bishop & Lee (1980) 246 Ga. 804 [273 S.E.2d 16, 18], the statute began running at the earliest date on which the client could have brought the malpractice suit, i.e., when the elements of the tort had been met. Both these statutes lack the element essential to this California case: actual injury.
Further, contrary to the majority’s contention, out-of-state cases interpreting statutes of limitation in the manner I propose do not rest their holding on continued representation of the client by the allegedly negligent attorney. For example, in Amfac Distribution Corp. v. Miller (1983) 138 Ariz. 155 [673 P.2d 795, 796-799], the court cited numerous reasons for holding that the limitation period did not start running until the pending appeal had been *626resolved, and did not explicitly limit its holding to situations in which the same attorney pursues the appeal.

Construing the Statute Consistently With Precedent and Policy

As we have seen, the plain language of the statute and its history provide guidance but do not authoritatively define “actual injury.” It is therefore appropriate to construe the statute to effect the ostensible legislative purpose (Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1078-1079 [282 Cal.Rptr. 445, 811 P.2d 737]) of furthering the policies underlying statutes of limitations: i.e., judicial economy, avoiding stale claims, and fairness to the parties.
The separate requirements of discovery and actual injury found in section 340.6 promote judicial economy. Rather than forcing a client to file a malpractice action whenever the attorney falls below the standard of competent counsel, the statute allows the client to wait until the attorney’s mistakes cause some palpable harm, i.e., until they result in a lost case. Without the actual injury requirement, a litigant would have to file malpractice actions before knowing the ultimate result—a possible favorable outcome to the litigant despite the attorney’s malpractice.
I apply this logic to the situation at hand. To force malpractice plaintiffs to file their actions before they know the outcome of the case upon which their claim is based does not promote judicial economy. The status of the malpractice claim is uncertain until the appeal in the underlying case is resolved, because if it is ultimately decided in the client’s favor the malpractice suit may well become moot for lack of damages.2 The majority’s analysis defies rationality with its fictional scenario of a client who files a malpractice action against an attorney after winning the underlying lawsuit; this would be a rare situation indeed.
My resolution of the conflict is consistent with the other policy considerations behind section 340.6. To await the result of a pending appeal will not lead to stale claims because the circumstances under which the limitation period will be tolled are limited. First, as in Turley v. Wooldridge, supra, 230 Cal.App.3d 586, even though an appeal of right may be available it does not *627toll the statute unless the litigant actually pursues the appeal. This prevents a client from causing the limitation period to be indefinitely tolled by deferring pursuit of remedies, a concern expressed in Worton v. Worton, supra, 234 Cal.App.3d at page 1652. Second, the limitation period is not tolled if there is no appeal of right, as in Troche v. Daley, supra, 217 Cal.App.3d 403, the case in which the client attempted to appeal in forma pauperis under federal law.
The third policy consideration, fairness to malpractice plaintiffs, is also furthered by my construction of the statute. It is impractical to require a client simultaneously to pursue two lawsuits: a malpractice action and an appeal of right. The present case illustrates the dilemma. Here plaintiff pursued her appeal without the aid of counsel, requiring an enormous effort to understand the statutes and rules governing appeals. To compel her simultaneously to prosecute a malpractice suit would be unduly burdensome. The situation is different, however, if the client has an appeal of right but does not pursue it; then her decision not to appeal implies that she considers the judgment of the trial court final.
The majority’s contentions fail to persuade otherwise. They parade their “horribles,” arguing that memories will fade and witnesses die while malpractice plaintiffs pursue appeals. However, the dangers associated with delay are greatly lessened by the very nature of legal malpractice cases. As one court declared in resolving the present issue: “Unlike medical malpractice or other forms of malpractice which do not occur in the course of litigation, [legal malpractice] generally is memorialized in court pleadings or in hearing transcripts. . . . [T]he dangers associated with delay are lessened because a record will have been made of the actions which form the substance of the later malpractice action.” (Amfac Distribution Corp. v. Miller, supra, 673 P.2d at p. 798.)
The present case illustrates the validity of this observation: a client in Laird’s position may rely on legal records to show when she engaged defendants as her attorneys and what they did to pursue the lawsuit. The client may then ask the trier of fact to compare this performance with expert testimony stating what a reasonably diligent attorney would have done. The attorneys may respond with their own expert witness, but the heart of the matter is the legal records that show, for example, when depositions were taken and motions were made. Such formal written evidence will not become stale pending resolution of an appeal in the underlying case.
Further, although the majority correctly point out that some harm is caused by the mere fact that an adverse judgment is entered regardless of *628what happens on appeal, the various harms they cite cannot be considered “actual injury.” Consistent with policy reasons discussed above, especially judicial economy, I would reject the dictum in Budd v. Nixen, supra, 6 Cal.3d at page 202, suggesting that substantial harm is suffered by the ordinary expenses that appellants incur to maintain an appeal, such as paying filing and transcript fees and posting a bond; whether such harm is relatively de minimis, or is indeed suffered at all, cannot be determined until the appeal is concluded because these expenses may be recouped by the prevailing party on appeal. (Cal. Rules of Court, rule 26.)
Nor is the reduced settlement value of a case decided adversely in the trial court enough to satisfy the actual injury requirement; if and when the case is actually settled, there is actual injury because the settlement represents the litigant’s agreement to forgo further remedies. Finally, any added emotional distress caused by the adverse judgment, even if compensable in a malpractice suit when certain requirements are met, is not actual injury. A client may suffer emotional distress whenever the attorney makes a mistake; added distress cannot be the yardstick by which actual injury is measured.
Thus, based on the language of the statute, on legislative history, on case law, and on practicality, I am convinced the majority err in holding there is actual injury while the client yet awaits the resolution of an appeal of right she has actually pursued. Because Ms. Laird filed her malpractice action within one year of dismissing her appeal, I would hold that her malpractice action was timely.
Respondent’s petition for a rehearing was denied July 16, 1992, and the opinion was modified to read as printed above. Mosk, J., was of the opinion that the petition should be granted.

In malicious prosecution actions a pending appeal is treated similarly: it tolls the limitation period only if actually pursued. (Korody-Colyer Corp. v. General Motors Corp. (1989) 208 Cal.App.3d 1148, 1151 [256 Cal.Rptr. 658]; Rare Coin Galleries, Inc. v. A-Mark Coin Co., Inc. (1988) 202 Cal.App.3d 330, 335 [248 Cal.Rptr. 341].) The majority’s construction of section 340.6 gives attorney malpractice defendants an unjustified advantage over other civil defendants by requiring litigants such as Ms. Laird to file the malpractice suit while awaiting the outcome of the underlying case.

The majority’s construction of the statute may also interact with “fast track” trial procedures to threaten potential havoc. Appeals require many months and often years to prepare the record, complete the briefing, hear arguments, and reach a decision. The “fast track” trial procedures adopted by a number of counties could result in a judgment obtained against the attorney in the malpractice action before the appeal in the underlying case is decided; if that appeal is successful, it alters the very foundation of the malpractice judgment A practical reading of the statute would prevent this topsy-turvy turn of events.