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CA: Statute of Limitations tolled until client discovers or should discover cause of action for attorney malpractice

Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal. 3d 176, 491 P.2d 421 (1971)

CA: Tort Law

Student Contributor: Louis Dell

Facts: Plaintiffs hired an attorney to represent their wrongful death action against San Bernardino County. The attorney, without informing the plaintiffs, associated as counsel another law firm. Neither the original or new law firm had arranged for service of summons. This prompted the court to dismiss the plaintiff’s action for failure to serve a summons within three years.
The plaintiffs’ case was dismissed in 1965. Plaintiffs did not know of this until late 1967 when they consulted with another attorney. The defendants argued that the statute of limitations begins running when the last negligent act occurred. If the court accepted this argument the plaintiff’s case would be dismissed because the statute of limitations only allows two years to bring a malpractice suit and over three years had passed.
The Plaintiffs allege that if the summons had been served that the case would have gone to trial and they would have won the suit.

Issue: Under CA law, when does the statute of limitation begin running in a legal malpractice case?

Ruling: The statute of limitations does not begin running until after the plaintiff discovers the cause of action.

“In an action for professional malpractice against an attorney, the cause of action does not accrue until the plaintiff knows, or should know, all material facts essential to show the elements of that cause of action.”

In an ordinary tort or contract case the statute of limitations would begin to run when the last element essential to the cause of action occurs. In the case of legal malpractice this is not true because “the client may not recognize the negligence of the professional when he sees it.”

The attorney client relationship is a fiduciary relationship. The clients “lack [of] awareness of a practitioner’s malpractice implies, in many cases, a second breach of duty by the fiduciary, namely, a failure to disclose material facts to his client.” If the statute of limitations was not postponed the attorney would receive immunity for his non-disclosure.

Lesson: An attorney should always make full disclosure of all material information relating to the client’s case. The two year statute of limitations will not run until the client knows all material information essential to show the elements of the cause of action.  

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Posted in: California, Discovery Rule