ALTER v. MICHAEL

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District Court of Appeal, Second District, Division 1, California.

John ALTER, Fred Geyler and Fred Pfotenhauer, Plaintiffs and Appellants, v. John A. MICHAEL, Defendant and Respondent.

Civ. 29206.

Decided: December 08, 1965

Cadoo, Tretheway, McGinn & Morgan, and John J. Cheroske, Inglewood, for appellants. Kinkle, Rodiger, Graf & Dewberry, William B. Rodiger, and Eldon W. Bergstrom, Jr., Los Angeles, for respondent.

On July 24, 1963, plaintiffs filed against defendant, an attorney at law, ‘Complaint For Malpractice, Negligence and Damages,’ alleging that he was retained to represent them in the acquisition of an auto parts business, he negligently and unskillfully conducted certain legal matters relative to the organization and supervision of Magico Industries, Inc., and negligently advised them concerning unauthorized use of corporate funds; and that the malpractice occurred between October 1961 and April 1962. One of the affirmative defenses was the bar of the statute of limitations; thus, at the outset of the trial defendant made a motion to dismiss the action as barred by section 340, subdivision 3, Code of Civil Procedure. Plaintiffs appeal from the judgment of dismissal based on order granting the motion.

The sole issue is whether an action against an attorney for malpractice, based on negligent and unskillful conduct in rendering legal services, is governed by section 340, subdivision 3, Code of Civil Procedure, or section 339, subdivision 1, Code of Civil Procedure.

Under section 339, subdivision 1, the following must be commenced ‘Within two years: 1. An action upon a contract, obligation or liability not founded upon an instrument of writing * * *.’;1 under section 340, subdivision 3,2 ‘Within one year: * * * 3. An action * * * for injury to or for the death of one caused by the wrongful act or neglect of another, * * *’ must be commenced.

Without exception, from 1886 (Hays v. Ewing, 70 Cal. 127, 11 P. 602) California courts have held that the statute of limitations applicable to an action against an attorney at law for negligence in the performance of professional services in one which limits to two years the time for bringing ‘an action upon a * * * liability not founded upon an instrument of writing * * *.’ (Code Civ.Proc., § 339, subd. 1; Jensen v. Sprigg (1927), 84 Cal.App. 519, 258 P. 683; DeGarmo v. Luther T. Mayo, Inc. (1935), 4 Cal.App.2d 604, 41 P.2d 366; Griffith v. Zavlaris (1963), 215 Cal.App.2d 826, 30 Cal.Rptr. 517; Bustamante v. Haet, 222 Cal.App.2d 413, 35 Cal.Rptr. 176.) ‘The period for commencing an action for damages against an attorney for malpractice is two years. (Code Civ.Proc., § 339, subd. 1; * * *)’ (Bustamante v. Haet, 222 Cal.App.2d 413, 414, 35 Cal.Rptr. 176, 177), and the statute of limitations begins to run from the time of the negligent act. (Griffith v. Zavlaris, 215 Cal.App.2d 826, 829, 30 Cal.Rptr. 517; Bustamante v. Haet, 222 Cal.App.2d 413, 414–415, 35 Cal.Rptr. 176.)

While the rule prescribing the time within which legal malpractice actions must be commenced is settled law, it evolved unchanged from Hays v. Ewing (1886), 70 Cal. 127, 11 P. 602. For almost 80 years our courts have applied it without consideration of the operation and effect of the 1905 amendment to sections 339 and 340, Code of Civil Procedure, the Supreme Court's early clarification and liberalization of rules of limitation governing medical malpractice actions and their departure from those still applicable to legal malpractice, and the absence of legislative intent that substantial differences in this connection continue to exist between medical and legal malpractice actions, both sounding in tort and arising out of negligent conduct. Thus, our assessment of the rule of Hays v. Ewing as applied today is emboldened by a steady increase in the frequency of claims against attorneys and the fact that the Supreme Court has not determined the precise issue since 1886.

In 1872, as a result of the work of a previously appointed Code Commission, a Code of Civil Procedure was adopted. As originally enacted therein, section 339 read in pertinent part:

‘Within two years:

‘1. An action upon a contract, obligation, or liability, not founded upon an instrument of writing;

‘* * *.

‘4. An action to recover damages for the death of one caused by the wrongful act of another.’

Section 340 originally provided:

‘Within one year:

‘* * *.

‘3. An action for libel, slander, assault, battery, or false imprisonment;

‘* * *.’

Thereafter, in 1877, the Supreme Court in Piller v. Southern Pac. R. R. Co., 52 Cal. 42, held that the term ‘liability’ as used in section 339, subdivision 1, extended to liability arising from torts. the action was one for negligence wherein plaintiff, a passenger, suffered injury when two trains collided. Said the court: ‘We are of opinion that the two years' limitation found in the first clause of the first subdivision of sec. 339 is applicable to all actions at law not specifically mentioned in other portions of the statute. * * *’ (p. 44.) (See also Wood v. Currey (1881), 57 Cal. 208, 209–210.) Accordingly, the tort liability upon which both medical and legal malpractice actions are based was early construed to be a ‘liability, not founded upon an instrument of writing,’ making applicable thereto section 339, subdivision 1, as prescribing the time within which such actions must be commenced. Thus, the Supreme Court in Hays v. Ewing (1886), 70 Cal. 127, 11 P. 602, in a brief opinion without discussion or citation of authority other than the statute, held that the period for commencing an action for damages against an attorney for malpractice ‘based on any neglect of the defendant’ (p. 128, 11 P. p. 602) is two years, governed by section 339, subdivision 1.

In 1892, in Lattin v. Gillette, 95 Cal. 317, 30 P. 545, the Supreme Court reviewed the Piller and Wood, cases, supra, clarifying the applicability of section 339. An action for damages arose out of negligence in the examination and report on the condition of title to certain real property by defendants who were engaged in the business of searching public records and examining titles to real estate. ‘Section 339, Code Civil Proc. provides that an action upon a ‘contract, obligation, or liability, not founded upon an instrument in writing’, must be brought within two years after the cause of action shall have accrued. This provision was declared in Pillar [sic] v. Southern Pac. R. R. Co., 52 Cal. 42, 44, to be ‘applicable to all actions at law not specifically mentioned in other portions of the statute.’ The word ‘liability’ is the most comprehensive of the several terms used in this section, and includes both of the others, inasmuch as it is the condition in which an individual is placed after a breach of his contract or a violation of any obligation resting upon him. It is defined by Bouvier to be: ‘Responsibility; the state of one who is bound in law and justice to do something which may be enforced by action. This liability may arise from contracts, either express or implied, or in consequence of torts committed;’ and this definition was approved in Wood v. Currey, 57 Cal. 209.

‘The statute of limitations begins to run against a cause of action as soon as the right of action has accrued. Upon the breach of any special contract the contract begins to run at the date of the breach, and a right of action growing out of the negligence of another accrues whenever the act of negligence is complete. ‘When misconduct or negligence constitutes a cause of action, the statute of limitations begins to run from the time when the defendant had been guilty of such misconduct or negligence.’ Wood v. Currey, 57 Cal. 209. Whether the negligence out of which the cause of action arises is the breach of an implied contract, or the affirmative disregard of some positive duty, is immaterial. In either case the liability arises immediately upon such breach of contract or disregard of duty, and an action to recover the damages which are the measure of such liability may be immediately maintained.' (pp. 318–319, 30 P. p. 546.)

Thus, in legal (Hays v. Ewing, 70 Cal. 127, 11 P. 602; Jensen v. Sprigg, 84 Cal.App. 519, 258 P. 683; DeGarmo v. Luther T. Mayo, Inc., 4 Cal.App.2d 604, 41 P.2d 366) and medical (Harding v. Liberty Hospital Corp., 177 Cal. 520, 522, 171 P. 98; Wetzel v. Pius, 78 Cal.App. 104, 107, 248 P. 288; Johnson v. Nolan, 105 Cal.App. 293, 295, 288 P. 78) malpractice actions, the courts held that the statute of limitation commences to run from the time defendant committed the negligent act, regardless of whether plaintiff actually knew of his injury and its cause—governed by the same provision applicable to actions ‘upon a contract * * * not founded upon an instrument of writing.’ (§ 339, subd. 1, Code of Civ.Proc.)

In 1905 the Legislature deleted from section 339, subdivision 4, action to recover for wrongful death and incorporated the same in section 340, subdivision 3, extending the latter to embrace ‘an action for * * * injury to or for the death of one caused by the wrongful act or neglect of another,’ and an action by a depositor against a bank for the payment of a forged or raised check.

While neither section 339, subdivision 1, nor subdivision 3, section 340, as amended, specifically mentioned either an action against a physician for malpractice based upon negligence in rendering medical services, or an action against an attorney for malpractice based upon negligence in rendering legal services, the Supreme Court early removed the medical malpractice case from the ambit of section 339(1) and extended actions ‘for injury to * * * one caused by the * * * neglect of another’ embodied in subdivision 3, section 340, to include an action for medical malpractice—on the theory that the same was one sounding in tort. (Harding v. Liberty Hospital Corp. (1918), 177 Cal. 520, 171 P. 98.) Thus, in Harding, citing Basler v. Sacramento etc. Ry. Co., 166 Cal. 33, 134 P. 993, the Supreme Court said: ‘* * * we are of the opinion that the gravamen of this action consists in the alleged negligent acts of the chief surgeon of the defendant, consisting in his unskillful setting of the said plaintiff's injured limb, * * *’ (Emphasis added.) (p. 522, 171 P. p. 99)

In 1936 the court declared in Huysman v. Kirsch, 6 Cal.2d 302, at page 306, 57 P.2d 908, at page 910: ‘It is the settled law in this state that an action by a patient against a physician and surgeon for injuries sustained by the former, by reason of the negligent or unskilled treatment of the latter, is an action sounding in tort * * * barred by the provisions of subdivision 3 of section 340 of the Code of Civil Procedure one year after the date of the injury.’ (Emphasis added.) (Calvin v. Thayer, 150 Cal.App.2d 610, 616, 310 P.2d 59; Costa v. Regents of the Univ. of California, 116 Cal.App.2d 445, 454, 254 P.2d 85; Weinstock v. Eissler, 224 Cal.App.2d 212, 226, 36 Cal.Rptr. 537; Stafford v. Shultz, 42 Cal.2d 767, 775, 270 P.2d 1.) And, liberalizing the rule relative to the time the statute begins to run in actions founded on tort liability, the court further held that in those tort cases to which the one year statute is applicable, the statute does not commence to run until the plaintiff discovers, or by the exercise of reasonable care, should discover, the injury resulting from the defendant's negligence. (Huysman v. Kirsch, 6 Cal.2d 302, 310, 312–313, 57 P.2d 908.) Thus, today an action for medical malpractice is governed by section 340, subdivision 3, Code of Civil Procedure, which limits to one year the period for bringing such action; and the statute does not commence to run until the date of discovery of, or date when, by the exercise of reasonable care, plaintiff should have discovered the injury. (Stafford v. Shultz, 42 Cal.2d 767, 776, 270 P.2d 1; Hemingway v. Waxler, 128 Cal.App.2d 68, 70–71, 274 P.2d 699; Weinstock v. Eissler, 224 Cal.App.2d 212, 226, 36 Cal.Rptr. 537.)

Meanwhile, no such construction or liberalization was attributed to the rules applicable to legal malpractice actions, also sounding in tort based on negligence and not specifically mentioned in either section 339 or 340; these actions continued to be governed by the rule applied in 1886. In 1918, the Supreme Court decided Lally v. Kuster, 177 Cal. 783, 171 P. 961. An attorney at law was sued for negligence in allowing an action on the foreclosure of a note and mortgage to be dismissed for delay in prosecuting it. In the opinion no mention was made of the applicability of section 339, subdivision 1, or any other statutory provision; the only controversy related to when the right of action accrued. Conceding that the question is not ‘free from difficulty,’ the court said: ‘* * * and yet where the disobedience complained of consists in delay only, the cause of action cannot be said to arise until such delay has resulted in some injury, as it did when the court dismissed the case because of the delay.’ (p. 791, 171 P. p. 964) While this has led to some confusion, the court only held that the negligent act out of which the cause of action arose was allowing dismissal of the action for lack of prosecution, and that defendant's delay in prosecuting the action did not become a negligent act until the time when the action could be dismissed because of the delay. In Jensen v. Sprigg (1927), 84 Cal.App. 519, 258 P. 683—an action against an attorney based on negligence in handling a claim placed in his hands for collection—the court, without discussion, briefly citing Hays v. Ewing, 70 Cal. 127, 11 P. 602, as its authority, said: ‘Under section 339 of the Code of Civil Procedure, a cause of action against an attorney for neglect of duty in the management of an action is barred at the expiration of two years after the neglect occurred. * * *’ (p. 522, 258 P. p. 685.) It also cited Boyer v. Barrows (1914), 166 Cal. 757, 138 P. 354, a suit for damages by one attorney against another to enforce an oral agreement for equal division of fees they might receive for legal services rendered a client, hardly authority for the rule under consideration. Wheaton v. Nolan (1934), 3 Cal.App.2d 401, 39 P.2d 457, filed more than four years after the claimed damage, was an action for failure of attorneys to diligently and properly commence suit and attachment proceedings; the holding therein is of little importance here, for the allegations made to overcome the running of the statute of limitations were deemed to be insufficient. (p. 403, 39 P.2d 457.) Quoting from Jensen v. Sprigg, 84 Cal.App. 519, 522, 258 P. 683, and referring to Hays v. Ewing, 70 Cal. 127, 11 P. 602; Lattin v. Gillette, 95 Cal. 317, 30 P. 545 (an action for negligence in reporting on condition of title) and Medley v. Hill, 104 Cal.App. 309, 285 P. 891 (action against a sheriff for breach of official duty), the court in DeGarmo v. Luther T. Mayo, Inc. (1935), 4 Cal.App.2d 604, 41 P.2d 366, reiterated the by then settled rule that “Under section 339 of the Code of Civil Procedure, a cause of action against an attorney for neglect of duty in the management of an action is barred at the expiration of two years after the neglect occurred.” (p. 606, 41 P.2d p. 367.)

In what is now considered to be the leading case, Griffith v. Zavlaris (1963), 215 Cal.App.2d 826, 30 Cal.Rptr. 517, the court, proceeding on the premise that section 339, subdivision 1 applies, decided the issue of when the statute begins to run. ‘Heretofore, the only cases determining the time of commencement of the two years have held that in actions for legal malpractice the statute commences to run from the date the negligent act occurs.’ (p. 828, 30 Cal.Rptr. p. 519.) However, for the first time, a court considered, even if only briefly, the differences now existing between medical and legal malpractice cases, apparently motivated by appellant's position urging a reconsideration of the rule on the theory that the law relating to the medical malpractice action had long before been changed (Huysman v. Kirsch (1936), 6 Cal.2d 302, 57 P.2d 908) in spite of earlier cases holding that the statute commenced to run from the date of the physician's act. With but only limited discussion the court summarily disposed of the matter: ‘However, medical malpractice is governed by section 340, subdivision 3, Code of Civil Procedure (one year) while legal malpractice is governed by section 339, subdivision 1 (two years). The Legislature has in no way made these two malpractice actions analogous. Although the application of the rules of legal malpractice actions may seem harsh, nevertheless it would appear that if the timehonored rule as to the commencement of the limitation provided in section 339, subdivision 1, is to be changed, it should be changed by the Legislature with appropriate conditions, so that the liability of an attorney would not exist indefinitely.’ (pp. 830–831, 30 Cal.Rptr. p. 520.) It is interesting to note that under the interpretation in Griffith, supra, it is possible for an attorney to commit a negligent act (resulting in damage) which is not discovered until some years later at which time action thereon will be barred.

Citing Griffith, and again starting with the premise that ‘the period for commencing an action for damages against an attorney for malpractice is two years,’ citing Hays v. Ewing, the court in Bustamante v. Haet (1963), 222 Cal.App.2d 413, 35 Cal.Rptr. 176, an action against an attorney for his negligence in advising plaintiff concerning procedure to be followed in a proxy marriage, held that in actions for legal malpractice the statute of limitations runs from the time of the negligent act and not from the time of the discovery of the injury. (pp. 414–415, 35 Cal.Rptr. 176, 177.)

The rationale of the courts in transferring the medical malpractice case from the limbo of section 339, subdivision 1—‘applicable to all actions at law not specifically mentioned in other portions of the statute’ (Piller v. Southern Pac. R. R. Co., 52 Cal. 42, 44; Lattin v. Gillette, 95 Cal. 317, 318, 30 P. 545)—to section 340, subdivision 3, thereby reducing the period in which the action may be commenced to one year, was that, by reason of the negligent act of the physician, it ‘is an action sounding in tort.’ (Huysman v. Kirsch, 6 Cal.2d 302, 306, 57 P.2d 908, 910.) Yet this concept has never been applied to the legal malpractice action, even though it, too, is not specifically mentioned in any limitation statute and is an ‘action sounding in tort’ arising out of the negligent act of the attorney. There seems to be little justification for clinging to the old thesis that since it is a liability not founded on a written instrument, the legal malpractice action is governed by section 339, subdivision 1, and consigning it to this ‘catch-all’ statute (§ 339, subd. 1), or for seeking refuge in any so-called distinction that section 340, subdivision 3, embraces all infringements of personal rights as opposed to property rights relegated to section 339, subdivision 1. Such distinction has been drawn in those cases in which the action has been based upon personal injury as opposed to one based on an agreement (of carriage) (Basler v. Sacramento etc. Ry. Co., 166 Cal. 33, 134 P. 993), upon abuse of process (Simons v. Edouarde, 98 Cal.App.2d 826, 221 P.2d 203) and upon injury to the person as opposed to breach of warranty. (Rubino v. Utah Canning Co., 123 Cal.App.2d 18, 266 P.2d 163; Rodibaugh v. Caterpillar Tractor Co., 225 Cal.App.2d 570, 37 Cal.Rptr. 646.) We note that while personal injury is generally implicit in an action for medical malpractice, judicial interpretation of section 340, subdivision 3, to encompass the medical malpractice action was predicated cated on the negligence aspect of the tortious act of the physician.

Moreover, there is nothing to indicate that the Legislature intended section 340, Code of Civil Procedure, particularly subdivision 3, to apply exclusively to actions for injury to the person; to the contrary, it has admitted actions for damage to property rights. Section 340 specifically includes a plethora of actions having no relation to personal injury, i. e., upon a statute for penalty or forfeiture (subds. 1, 2), against a sheriff for escape (subd. 4), against an officer for damages for seizure of property (subd. 5). More particularly, those actions included in subdivision 3, section 340, embrace the following which do not relate to injury to the person: libel, slander, action by a depositor against a bank for the payment of a forged or raised check, an action for injury or death to animal or fowl by keeper or boarder. These are all included in subdivision 3 with actions for injury to or for the death of one caused by the wrongful act or neglect of another. Thus, Basler v. Sacramento ect. Ry. Co., 166 Cal. 33, 134 P. 993, and Simons v. Edouarde, 98 Cal.App.2d 826, 221 P.2d 203, and the section (340, subd. 3) itself lead to the conclusion that the term ‘injury’ used in the latter need not always be such as applies to the person of plaintiff for an action thereon to be included in those embraced by subdivision 3, section 340, Code of Civil Procedure.

Inasmuch as the legal malpractice action sounds in tort and is not specifically mentioned in any limitation statute, and section 340, subdivision 3 includes actions other than those for personal injury, there is no more indication that the Legislature intended to keep the legal malpractice action in the ‘catch-all’ provision of section 339, subdivision 1, than there was that it intended to confine the medical malpractice action to such section. Otherwise it would lead to the conclusion that the Legislature had intentionally discriminated in favor of those in the medical profession against those in the legal profession, one which we are not about to reach in the light of the predominance of lawyers in that body.

The judgment is affirmed.

FOOTNOTES

1.  Section 339, Code of Civil Procedure: ‘Within two years: ‘1. An action upon a contract, obligation or liability not founded upon an instrument of writing, other than that mentioned in subdivision 2 of Section 337 of this code; or an action founded upon a contract, obligation or liability, evidenced by a certificate, or abstract or guaranty of title of real property, or by a policy of title insurance; provided, that the cause of action upon a contract, obligation or liability evidenced by a certificate, or abstract or guaranty of title of real property or policy of title insurance shall not be deemed to have accrued until the discovery of the loss or damage suffered by the aggrieved party thereunder. ‘2. An action against a sheriff, coroner, or constable upon a liability incurred by the doing of an act in his official capacity and in virtue of his office, or by the omission of an official duty including the nonpayment of money collected upon an execution. But this subdivision does not apply to an action for an escape. ‘3. An action based upon the rescission of a contract not in writing. The time begins to run from the date upon which the facts that entitled the aggrieved party to rescind occurred. Where the ground for recission is fraud or mistake, the time does not begin to run until the discovery by the aggrieved party of the facts constituting the fraud or mistake.’

2.  Section 340, Code of Civil Procedure provides: ‘Within one year: ‘1. An action upon a statute for penalty or forfeiture, when the action is given to an individual, or to an individual and the State, except when the statute imposing it prescribes a different limitation; ‘2. An action upon a statute, or upon an undertaking in a criminal action, for a forfeiture or penalty to the people of this State; ‘3. An action for libel, slander, assault, battery, false imprisonment, seduction of a person below the age of legal consent, or for injury to or for the death of one caused by the wrongful act or neglect of another, or by a depositor against a bank for the payment of a forged or raised check, or a check that bears a forged or unauthorized endorsement, or against any person who boards or feeds an animal or fowl or who engages in the practice of veterinary medicine as defined in Business and Professions Code Section 4826, for such person's neglect resulting in injury or death to an animal or fowl in the course of boarding or feeding such animal or fowl or in the course of the practice of veterinary medicine on such animal or fowl; ‘4. An action against a sheriff or other officer for the escape of a prisoner arrested or imprisoned on civil process; ‘5. An action against an officer to recover damages for the seizure of any property for a statutory forfeiture to the State, or for the detention of, or injury to property so seized, or for damages done to any person in making any such seizure.’

LILLIE, Justice.

WOOD, P. J., and FOURT, J., concur.