Tuesday, July 15, 2014

Lee v. Hanley (Cal. Ct. App. - July 15, 2014)

Isn't it wonderful when the first couple of paragraphs of an opinion tell you the vast majority of what you need to know about the case?  Absolutely.

Hence my love for Justice Moore's opinion in this case.

Here's the first page, which tells you almost all that you need to know:

"Plaintiff and appellant Nancy F. Lee hired Attorney William B. Hanley to represent her in certain civil litigation. After the litigation settled, Lee sought a refund of unearned attorney fees and unused expert witness fees she had advanced to Attorney Hanley. Not having received a refund, Lee hired Attorney Walter J. Wilson and terminated the services of Attorney Hanley. Attorney Hanley thereafter refunded certain expert witness fees, but no attorney fees. More than a year after hiring Attorney Wilson, Lee filed a lawsuit against Attorney Hanley seeking the return of attorney fees.

Attorney Hanley filed a demurrer to Lee’s second amended complaint, based on the one-year statute of limitations contained in Code of Civil Procedure section 340.6.1 The court sustained the demurrer and dismissed the action with prejudice. Lee appeals. We reverse.

Section 340.6 provides the statute of limitations for an action based on “a wrongful act or omission, other than for actual fraud, arising in the performance of professional services . . . .” According to the plain wording of the statute, to the extent the wrongful act or omission in question arises “in the performance of professional services,” the statute applies; to the extent the wrongful act or omission in question does not arise “in the performance of professional services,” the statute is inapplicable.

This notwithstanding, it seems that almost any time a client brings an action against his or her attorney the wrongful act in question is construed as one arising in the performance of legal services, such that section 340.6 applies. But surely it cannot be the case that every conceivable act an attorney may take that affects his or her client is one arising in the performance of legal services. For example, if a client leaves her purse unattended in the attorney’s office and the attorney takes money from it, would we say that act arose in the performance of legal services? How different is it if, when the legal services have been completed and the attorney’s representation has been terminated, the attorney keeps the unearned fees belonging to the client? To steal from a client is not to render legal services to him or her. We hold that, to the extent a claim is construed as a wrongful act not arising in the performance of legal services, such as garden variety theft or conversion, section 340.6 is inapplicable."

Love it.

By the way, statute of limitations aside, this seems like a fairly decent lawsuit.  Backed up by the (likely inadmissible) fact that the State Bar has also charged Mr. Hanley with misconduct based on these same events.  As well as, in Count Four, a little problem concerning a forged letter that Mr. Hanley allegedly submitted to the State Bar.

So the world gets to find out a little more detail about whether this particular Newport Beach attorney made off with tons of money from his client or whether that client gave that cash to him as a "bonus" for a job well done.

One thing's for sure:  The client is definitely not happy now.