Panel reinstates $11M fraud suit against Buchalter

A Court of Appeal panel reinstated an $11 million lawsuit claiming that a Buchalter APC attorney participated in a covert scheme to assume ownership of a medical spa practice.

The opinion written by Justice Gail R. Feuer of the 2nd District found that claims of fraud by the plaintiff were not time-barred by Code of Civil Procedure 340.6(a), as Los Angeles County Superior Court Judge Barbara M. Scheper ruled in 2022.

“The complaint sufficiently alleged the Buchalter defendants conspired to commit actual fraud, such that Section 340.6 does not apply and the corporation’s conspiracy cause of action survives demurrer,” Feuer wrote in the unpublished opinion filed on Jan. 19. Williams et al. v. Lucas et al., B327061 (Cal. App. 2nd, filed Jan. 19, 2024).

Justices John L. Segal and Gonzalo Martinez concurred.

Plaintiff Dr. Wilbur Williams Jr. and his medical corporation were represented by sole practitioner Nick A. Alden of Beverly Hills. W. Allan Edmiston of Loeb & Loeb LLP represented defendant and Buchalter shareholder Carol K. Lucas, as well as the firm itself.

Counsel for neither side could be reached via email or telephone for comment by press time on Monday.

In a complaint filed in May 2022, Williams claimed that Lucas conspired with the doctor’s business associate, Sevana Petrosian, to help covertly take possession of a medical spa practice Williams owned. Williams et al. v. Lucas et al., 22STCV14857 (L.A. Sup. Ct., filed May 4, 2022).

The complaint pointed to an April 2014 meeting, claiming that Lucas led Williams to believe she represented both Williams and Petrosian. In truth, the complaint claimed, Lucas only represented Petrosian, and a management services agreement presented to Williams as a fair contract was actually a first step in a scheme for Petrosian to take over the practice.

“From the onset Lucas knew of Petrosian’s intent to own the practice, take all the profits and pay Dr. Williams some kind of salary and, upon termination of the agreement, Petrosian intended to take over the practice, which she did,” the complaint read.

In a demurrer to the complaint, the defense side cited California Code of Civil Procedure 340.6(a), which stipulates that legal action against an attorney for a wrongful act other than fraud must be brought within one year of the alleged conduct.

A memorandum of points and authorities in support of the demurrer noted that Williams terminated his business relationship with Petrosian in February 2020.

“Even accounting for emergency pandemic-related tolling from April 6, 2020 to Oct. 1, 2020, this case was filed well more than one year later, on May 4, 2022,” the memorandum read.

In the appellate ruling, however, Feuer wrote that the gravamen of the complaint brought by Williams and his medical corporation was fraud, bringing it out from under the cited statute of limitation.

“The Buchalter defendants do not cite, and we are not aware of any, case holding that an otherwise sufficient cause of action for intentional fraud by an attorney is subject to Section 340.6’s one-year statute of limitations,” Feuer said.

At the same time, Feuer ruled that individual claims by the doctor, including conspiracy, elder abuse and declaratory relief, were inadequately pleaded. The panel directed the trial court to vacate its order sustaining the demurrer and draft a new order only sustaining the demurrer with the inadequately pleaded charges.