Amendments to SOL for actions against attorneys coming in January

The statute of limitations for claims against attorneys -- Code of Civil Procedure Section 340.6 -- which was enacted in 1977, has been strictly construed throughout its 42-year history. Other than claims for actual fraud, the general period to bring a claim against a former attorney is one year from the date of actual or constructive discovery of the alleged wrongful act. In 2010 the statute was amended to deal with criminal cases, such that the statute commences to run after the plaintiff achieves post-conviction exoneration.

There is an outside date of four years after the wrongful act or omission (other than when factual innocence is a prerequisite to maintaining an action), except the statute has four exclusive tolling provisions; (1) no actual injury; (2) continuous representation; (3) willful concealment -- which tolls only the four-year provision and has never been construed in a published case; and (4) disability.

As was noted in the landmark Supreme Court case of Laird v. Blacker, 2 Cal. 4th 606, 618 (1992), "section 340.6, subdivision a), states 'in no event' shall the prescriptive period be tolled except under those circumstances specified in the statute." Indeed, in Gordon v. Law Offices of Aguirre& Meyer, 70 Cal. App. 4th 972 (1999), the court of appeal rejected the concept of "equitable tolling" as applied to Section 340.6.

In large respect, the availability and affordability of errors and omissions liability insurance, and the need to discourage stale claims, have been cited as reasons why the statute has been strictly construed. See Lee v. Hanley, 61 Cal. 4th 1225 (2015), which is the latest pronouncement by the high court as to 340.6. See also Connelly v. Bornstein, 33 Cal. App. 5th 783 (2019) (one-year period applies to malicious prosecution claims); Weatherup and Feldman, "One-year SOL on malicious prosecution suits is virtually settled," Daily Journal (Aug. 8, 2019). Compare Garcia v. Rosenberg, 2019 DJDAR 11344 (Dec. 4, 2019), wherein in a malicious prosecution case the Court of Appeal granted an anti-SLAPP motion based upon Section 340.6's four-years from the date of wrongful act provision; indeed, the date of discovery of the alleged wrongful act was disputed, so the court did not base its holding on the one year from discovery component of the statute.

The Amendment

The Legislature has seen fit to add a 5th tolling exception to the statute which becomes effective on Jan. 1, 2020. The new exception applies to the Mandatory Fee Arbitration Act (MFAA), and provides for tolling the limitations period applicable to specified attorney misconduct claims pending the resolution of arbitration carried out pursuant to the MFAA. Pursuant to Business and Professions Code Section 6200 et. seq. a client may voluntarily choose to pursue non-binding arbitration (which could become binding either by agreement or if no timely request for trial de novo is made), but where the client commences the proceedings, it is mandatory for the attorney. See Section 6200(c).

In particular, the amendment notes that where a dispute is "pending" under Section 6200, Section 340.6 is tolled. "Pending" means from the date a request for arbitration is filed until 30 days after receipt of notice of the award of the arbitrators, or receipt of notice that the arbitration is otherwise terminated, whichever occurs first."

The legislative history notes that the measure was sponsored by the Conference of California Bar Associations and had no known opposition. Indeed, the bill was described as "non-controversial" and passed by a vote of 74-0 in the Assembly. The rationale for the measure was to incentivize attorneys and their former clients to utilize the MFAA due to it being a lower cost method of settling fee disputes, while providing clients comfort that a potential future malpractice action would not be barred if the proceeding lasted longer than the typical one year period from the end of representation. Another rationale was to save judicial resources. The new legislation also has the goal of standardizing and conforming the language of Business and Professions Code Sections 6201 and 6206 so that both refer to "civil actions or other proceedings."

Conclusion

As one who regularly defends attorneys in malpractice, breach of fiduciary duty and other actions brought by their former clients, the new tolling exception should not be controversial. Likewise, this new provision will not have dramatic implications, unlike the acquisitions by the Lakers of LeBron James and Anthony Davis over the past two seasons. (Warriors fans, you had a great run, but your time has passed.) Indeed, the author does not anticipate the filing of malpractice actions -- which often are filed simply to avoid paying fees incurred in the underlying action or transaction -- will noticeably decrease due to this new tolling provision. 