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June 2, 2006

Gonzalez v. Kalu (2006) 140 Cal.App.4th 21

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The Second District decides that it is a question offact whether the statute of limitations is tolledfor continuous representation despite no services and no attorney-client contact for two and a halfyears.

Gabriella Gonzalez hired Emelike Kalu to represent her in a sexual harassment claim.  Kalu sent a demand letter and a Department of Fair Employment and Housing claim as a precursor to a complaint.  An employee of Kalu told Gonzalez that the case would take a long time and that they would contact her.  Gonzalez did not hear from Kalu nor did she try to contact him for two and a half years.  Gonzalez then went to Kalu’s office to get her file, and learned that Kalu was not prosecuting her case.  Kalu claimed that he told Gonzalez he would not prosecute the matter no later than December 2000.  Kalu had a custom and practice of advising his client in writing of his withdrawal, but no writing was offered in evidence.

The trial court granted summary judgment on the attorney malpractice statute of limitations, C.C.P.  § 340.6, ruling that Gonzales should have realized in the two and a half year period when she had no contact with Kalu that he was not prosecuting her case.  On appeal Gonzales argued, as she did in the trial court, that the limitations period was tolled during the time she reasonably believed that Kalu continued to represent her and that her failure to discover within that time frame that Kalu had not commenced a civil action was reasonable.

Code of Civil Procedure § 340.6 states that an action must be commenced within one year after the plaintiff actually discovers or reasonably should discover the facts constituting a wrongful act or omission, or within four years after the wrongful act or omission, whichever is earlier.  The limitations period is tolled while the attorney continues to represent the plaintiff regarding the same specific subject matter, even if the client is aware of attorney negligence.

Representation usually ends when the client discharges the attorney or consents to a withdrawal; the court consents to the attorney’s withdrawal; or upon completion of the matter.  California authority is split on whether an attorney‑client relationship can be deemed terminated where the client actually has or reasonably should have no expectation of further services.  Under one line of cases an attorney-client relationship exists only as long as there are clear indicia of an ongoing, continuous, developing, and dependent relationship marked with trust and confidence.  Other courts reject this rule because it is not codified in C.C.P.  § 340.6.

The Court of Appeal rejected Kalu’s argument that the statute began running when the failure to file a complaint became “irremediable.” The Court noted that one purpose of the continuous representation rule is to prevent an attorney from defeating a malpractice cause of action by continuing to represent the client until the statutory period has expired.  This purpose would not be served if tolling ended when the client’s loss became irremediable and the attorney could escape malpractice liability by continuing to represent the client until the statue of limitations expired.

The court held that for purposes of C.C.P.  § 340.6, in the event of an attorney’s unilateral withdrawal or abandonment, the representation ends when the client actually has or reasonably should have no expectation that the attorney will provide further legal services.  This may occur through express notification or inferred from the circumstances.  Without actual notice or explicit circumstances indicating the relationship has terminated, a client should be entitled to rely on an attorney to perform the agreed services.  Continuous representation should be viewed objectively from the client’s perspective.  Thus the client may avoid the disruption of an attorney-client relationship that would result from the filing of a malpractice action when the client actually and reasonably believes that the representation is continuing.  Reasonable belief in an ongoing attorney-client relationship is a question of fact and can be decided as a question of law if the undisputed facts can support only one conclusion.

The Court of Appeal concluded that there was a question of fact based on Kalu’s activities on Gonzalez’s behalf; the statement by Kalu’s employee that the case would take a long time and she would be contacted; and Gonzalez’s statement that Kalu never notified her that he had terminated services.  Reasonable minds could differ because Gonzalez was not sophisticated in legal matters and could not be expected to know the difference between an administrative claim and a complaint, or how long the process would take.

Comment: This case is another example of the importance of clarity in the formation and termination of the attorney-client relationship.  If an attorney is providing limited services and will not see a matter through to conclusion, this should be set forth in the written retention agreement.  Once services are completed, a letter to this effect should be sent to the client.  Absent a writing, in most instances the client will be given the benefit of the doubt.

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