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September 19, 2006

Slovensky v. Friedman (2006) 06 Cal. Daily Op. Serv. 8904

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The Third District holds that a plaintiff cannot establish damages, elements of both a legal malpractice and a breach of fiduciary duty claim, when the underlying cause of action is time-barred.

Tamara Slovensky retained Morton L.  Friedman, C.  Brooks Cutter, the law firms of Friedman, Collard, Cutter & Panneton, and the Cutter Law Firm to pursue a toxic mold personal injury action against Sequoia Fairway Apartments.  The attorneys represented many other tenants and former tenants suing for their health problems.  Slovensky’s share of a global settlement was $340,000.

In a lawsuit for legal malpractice and breach of fiduciary duty Slovensky alleged that the attorneys represented plaintiffs with conflicting interests; breached their duty of confidentiality; pressured her into a quick settlement precluding proof of greater damages at trial; misrepresented that her case was being evaluated independently and not being treated as part of a global settlement; misrepresented that the medical information she had was not reliable; and misrepresented the level of her illness due to exposure to toxic mold.

The Court of Appeal upheld the trial court’s grant of summary judgment for defendant attorneys.  There was no triable issue of material fact that at the time Slovensky first retained her attorneys her toxic mold claim was already time barred.  Because Slovensky’s claim was time-barred from the date she filed it, she was entitled to no recovery and was therefore not damaged by her attorneys’ alleged malpractice.

The breach of fiduciary duty claim also failed due to the inability to establish damages.  The court accepted as true the allegations in the complaint that the attorneys falsely told Slovensky her case was being evaluated independently; failed to advise Slovensky of the conflicts of interest; concealed from Slovensky that the success of a global settlement turned on her agreement to its terms; made false statements to pressure her into settlement; breached their duty of confidentiality; and improperly handled the settlement funds.

Nevertheless, without any triable issue of fact as to damages, there was no valid breach of fiduciary duty claim.

This included Slovensky’s request for disgorgement of fees.  Although disgorgement of fees is an appropriate remedy for a breach of fiduciary duty, where an attorneys’ misrepresentation or concealment causes no damage, disgorgement of fees is not warranted.pp

Comment: Damages are an essential element of any claim against an attorney.  Attorney misconduct that does not cause monetary harm will not support a claim for damages.

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