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Keywords

lawsuitdamageslitigationattorneynegligencestatutetrialsummary judgmentmalpracticetrademarkstatute of limitationslegal malpracticesustained
plaintiffdamagesattorneynegligencestatutetrialsummary judgmentmalpracticewillstatute of limitationssustained

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Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal.4th 739, 958 P.2d 1062, 76 Cal.Rptr.2d 749, 98 Cal. Daily Op. Serv. 5893, 98 Daily Journal D.A.R. 8219

Facts

Jordache Enterprises retained the law firm Brobeck, Phleger & Harrison to defend against a lawsuit alleging trademark infringement. After the lawsuit was filed, Jordache sought advice on insurance coverage but was incorrectly informed that it had none. Brobeck did not investigate potential insurance coverage or advise Jordache to notify its insurers. After discovering the alleged negligence, Jordache settled its insurance claims for less than the full amount and subsequently sued Brobeck for legal malpractice.

Jordache did not request from Brobeck, and Brobeck did not offer, any advice concerning insurance coverage for the Marciano action.

Issue

When does a former client sustain 'actual injury' for the purposes of commencing a legal malpractice action against their attorney under the statute of limitations?

This case presents a relatively narrow legal question: When does a former client—having discovered the facts of its attorneys' malpractice—sustain actual injury so as to require commencement of an action against the attorneys within one year?

Rule

The statute of limitations for legal malpractice actions begins when the client sustains 'actual injury,' which is defined as any loss or injury legally cognizable as damages in a legal malpractice action.

The statute of limitations will not run during the time the plaintiff cannot bring a cause of action for damages from professional negligence.

Analysis

The court determined that Jordache sustained actual injury when it incurred costs due to Brobeck's alleged negligence in failing to notify the insurers. The court emphasized that actual injury occurs when the client suffers any loss that is legally cognizable, regardless of whether the client has settled or adjudicated the underlying claims. The court found that Jordache's losses were not contingent on the outcome of the insurance litigation, as the damages were already incurred due to the attorney's negligence.

The court determined that Jordache sustained actual injury as a result of Brobeck's alleged neglect no later than December 1987.

Conclusion

The Supreme Court reversed the trial court's summary judgment in favor of Brobeck, holding that Jordache had sustained actual injury more than one year before filing the malpractice suit, thus allowing the statute of limitations to bar the claim.

The Supreme Court reversed the trial court's summary judgment in favor of Brobeck, holding that Jordache had sustained actual injury more than one year before filing the malpractice suit.

Who won?

Jordache Enterprises prevailed in the case because the Supreme Court found that it had sustained actual injury due to the law firm's negligence, which allowed the malpractice claim to proceed despite the statute of limitations argument.

Jordache prevailed in the case because the Supreme Court found that it had sustained actual injury due to the law firm's negligence.

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