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KHODAYARI v. MARINO, B229260. (2011)

Court: Court of Appeals of California Number: incaco20111104033 Visitors: 5
Filed: Nov. 04, 2011
Latest Update: Nov. 04, 2011
Summary: NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS CHANEY, J. Plaintiff Bahman Khodayari challenges the trial court's order sustaining the defendants' demurrer without leave to amend. As explained below, based on misinformation, the trial court erroneously believed Mr. Khodayari's complaint was barred as a matter of law and, therefore, incapable of amendment. But, because the complaint was not legally barred, it was an abuse of discretion to deny Mr. Khodayari leave to amend. Accordingly, we reverse
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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

CHANEY, J.

Plaintiff Bahman Khodayari challenges the trial court's order sustaining the defendants' demurrer without leave to amend. As explained below, based on misinformation, the trial court erroneously believed Mr. Khodayari's complaint was barred as a matter of law and, therefore, incapable of amendment. But, because the complaint was not legally barred, it was an abuse of discretion to deny Mr. Khodayari leave to amend. Accordingly, we reverse the judgment and order the trial court to grant Mr. Khodayari leave to amend his complaint.

Background

1. Nina Marino and Her Law Firm Represented Mr. Khodayari in a Criminal Proceeding.

In July 2008, Mr. Khodayari went to trial on charges related to insurance and consumer fraud involving car repair estimates and billing.1 Defendants Nina Marino and her law firm Kaplan Marino (collectively, "Marino") represented Mr. Khodayari in that criminal proceeding. Of the 27 counts against him, 19 were dismissed. A jury found Mr. Khodayari guilty of seven of the eight remaining counts against him. Mr. Khodayari—represented by new counsel—appealed the criminal judgment, seeking reversal of his convictions.

2. After He Was Convicted, Mr. Khodayari Sued Marino.

After he was convicted, but before any decision in his criminal appeal, Mr. Khodayari sued Marino for legal malpractice, breach of contract and common counts. His complaint was a form complaint labeled "ATTY. RETAINER CONTRACT" complaint. Mr. Khodayari checked the boxes next to "Breach of Contract," "Common Counts" and "Other allegations" indicating those causes of action were attached. However, he attached only a "First Cause of Action" form to the complaint.

Mr. Khodayari's "first cause of action" was titled "General Negligence." As to that cause of action, Mr. Khodayari stated Marino negligently injured him on July 18, 2008 through July 24, 2008 at the Los Angeles County Superior Court. Under "description of reasons for liability," Mr. Khodayari added "FIRST CAUSE OF ACTION (Attorney Malpractice)" and listed six "counts" which were alleged instances of Marino's negligence during representation of Mr. Khodayari in the criminal proceeding. Mr. Khodayari summarized his first cause of action stating "Defendant breached her duty to use such skill, prudence and diligence owed to Plaintiff. Moreover that said breach was the actual and proximate cause of Plaintiff's loss of liberty (one year), extra attorney's fees, loss of reputation in the community, lost income, etc. with final damages to be determined later."

Although Mr. Khodayari checked the boxes on his form complaint next to both "Breach of Contract" and "Common Counts" and indicated on his Civil Case Cover Sheet that there were three causes of action, he alleged no facts supporting either of the other two causes of action. He reserved his right to amend the complaint.

3. Marino Filed an Unopposed Demurrer To the Complaint, Which the Trial Court Sustained Without Leave To Amend.

Marino demurred to Mr. Khodayari's complaint, arguing it was "so vague, unintelligible and uncertain that it fails to adequately apprise Marino of the nature of the charges being brought against her." In the demurrer, Marino stated the complaint attempted to state two (instead of three) causes of action against Marino. Overlooking Mr. Khodayari's common counts claim, the demurrer addressed only his breach of contract and legal malpractice claims. In particular, Marino argued Mr. Khodayari failed to plead any facts supporting his breach of contract claim, and his attorney malpractice claim was inadequate because he had not alleged either actual innocence or that he had obtained post-conviction relief. Marino asked the court to sustain the demurrer in its entirety but did not argue that the court should sustain the demurrer without leave to amend. Mr. Khodayari did not oppose the demurrer, did not file an amended complaint and did not appear at the hearing on the demurrer.

At the October 18, 2010 hearing on the demurrer, counsel for Marino argued Mr. Khodayari's complaint failed as a matter of law and could not be amended. To support this claim, counsel misstated that Mr. Khodayari could not plead actual innocence or post-conviction relief because the court of appeal had affirmed his conviction in full. Specifically, counsel told the court Mr. Khodayari "did file an appeal of the underlying action. I did check the Court of Appeal docket. The underlying conviction was affirmed in full. So as a matter of law, he cannot amend around the defects of this complaint." In fact, however, Mr. Khodayari's criminal appeal had not been heard yet, let alone decided. Nonetheless, the trial court took Marino's counsel at his word and, upon hearing Mr. Khodayari's criminal conviction had been affirmed in full, the court stated "Then I'll sustain the demurrer without leave to amend."

About one week later, Mr. Khodayari filed a motion for reconsideration and a motion to vacate or set aside the trial court's order. Before briefing on those motions was complete, the trial court entered a judgment of dismissal with prejudice on November 1, 2010. On December 3, 2010, Mr. Khodayari filed his notice of appeal from the judgment.

Marino filed opposition to Mr. Khodayari's motions on December 30, 2010. The trial court denied the motions in January 2011.

4. Mr. Khodayari Filed a Second Lawsuit Against Marino.

On November 16, 2010, after the trial court dismissed his first lawsuit, Mr. Khodayari filed a second lawsuit against his former lawyers, alleging 17 causes of action, all of which relate to Marino's representation of Mr. Khodayari in the 2008 criminal proceeding.2 As far as we can tell from the record on appeal, that second lawsuit remains pending before the superior court.

5. Mr. Khodayari Filed His Opening Brief in His Criminal Appeal.

As to his criminal appeal, Mr. Khodayari filed his Opening Brief in April 2011, months after the trial court dismissed Mr. Khodayari's civil complaint against Marino. In his Opening Brief in the criminal appeal, Mr. Khodayari argues the trial court made various evidentiary and instructional errors, the evidence was insufficient to sustain various convictions, and the trial court should have granted a mistrial after Mr. Khodayari was taken into custody in front of the jurors. He does not argue ineffective assistance of counsel.

Discussion

1. Standards of Review

When a demurrer is sustained, we review the complaint de novo to determine whether it alleges facts stating a cause of action under any legal theory. (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 43.) "A demurrer tests the legal sufficiency of factual allegations in a complaint. [Citation.] In reviewing the sufficiency of a complaint against a general demurrer, this court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. This court also considers matters that may be judicially noticed." (Id. at pp. 42-43.) "Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show the complaint alleges facts sufficient to establish every element of each cause of action." (Id. at p. 43.)

We review the trial court's decision to sustain a demurrer without leave to amend for an abuse of discretion. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) This is true even if no request to amend the pleading was made below. (Rakestraw, supra, 81 Cal.App.4th at p. 43; Code Civ. Proc., § 472c, subd. (a).) "[I]f there is a reasonable possibility the defect in the complaint could be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend." (City of Atascadero, supra, 68 Cal.App.4th at p. 459.)

2. Sufficiency of Complaint

a. Legal Malpractice

The elements of a claim for legal malpractice in a criminal proceeding are: (1) the duty of the attorney to use the skill, prudence and diligence that members of his profession commonly possess and exercise, (2) a breach of that duty, (3) a proximate causal connection between the breach and the resulting injury, (4) actual loss or damage resulting from the attorney's negligence, and (5) proof of the client's actual innocence. (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199-1200 ("Coscia ").) It is undisputed that Mr. Khodayari did not specifically allege actual innocence in his complaint. Although Mr. Khodayari claims he "implied" his actual innocence, we do not glean such an inference from the complaint. As such, his complaint was insufficient and the trial court correctly sustained Marino's demurrer on that cause of action.

b. Breach of Contract and Common Counts

Other than checking the box next to "Breach of Contract" on the form complaint, Mr. Khodayari alleged nothing to support that cause of action. The complaint is clearly inadequate as to the claimed breach of contract. Thus, the trial court correctly sustained the demurrer as to that cause of action.

Although neither Marino nor the trial court addressed Mr. Khodayari's purported common counts claim, it too was similarly inadequate. Like his breach of contract cause of action, Mr. Khodayari simply checked the box next to "Common Counts" on the form complaint. That is insufficient to state a cause of action.

3. Leave to Amend

The remaining question is whether it was an abuse of discretion to deny Mr. Khodayari leave to amend his complaint. We conclude it was.

"`[I]f the plaintiff has not had an opportunity to amend the complaint in response to the demurrer, leave to amend is liberally allowed as a matter of fairness, unless the complaint shows on its face that it is incapable of amendment. [Citations.]' [Citations.] . . . [T]he plaintiff bears the burden of showing `in what manner [it] can amend [its] complaint and how that amendment will change the legal effect of [its] pleading.' [Citation.] The plaintiff may make this showing in the first instance on appeal. [Citation.]" (Align Technology, Inc. v. Bao Tran (2009) 179 Cal.App.4th 949, 971.)

Here, based on misinformation supplied by Marino's counsel, which Mr. Khodayari failed to correct, the trial court believed the complaint was legally barred (i.e., incapable of successful amendment). Accordingly, the court sustained Marino's demurrer without leave to amend. As discussed below, however, the complaint is not "incapable of amendment" and, therefore, Mr. Khodayari should be given leave to amend.

a. Legal Malpractice

At the hearing on the demurrer, counsel for Marino erroneously told the trial court that Mr. Khodayari could not amend his complaint. Counsel mistakenly believed not only that Mr. Khodayari's appeal in the criminal matter was over, but also that the court of appeal had affirmed his convictions in full. Based on that misinformation, counsel argued—and the trial court concluded—that Mr. Khodayari could not save his complaint.3 Counsel was wrong. In fact, at the time of the hearing on the demurrer, Mr. Khodayari had not yet filed his Opening Brief in the criminal appeal. Accordingly, his convictions were not final and, if overturned, he would be able to show post-conviction relief and argue actual innocence.4

Despite Marino's position to the contrary, Mr. Khodayari's responses to requests for admissions do not undercut his ability to plead actual innocence or post-conviction relief. In fact, in those responses, Mr. Khodayari was clear that his criminal appeal remained pending and that the rulings on some of the charges against him could change. Unlike Marino, we do not read Mr. Khodayari's statement that "the ruling on some charges may change" (italics added) to mean Mr. Khodayari admits guilt on other charges. Rather, in light of his Opening Brief in the criminal appeal, which seeks reversal of his convictions, we read this as an acknowledgment that many of the charges against Mr. Khodayari were dismissed and that those dismissals were not appealed and will not change.5

While his appeal in the criminal matter remains pending, Mr. Khodayari cannot prove actual innocence or post-conviction relief. In such circumstances, our Supreme Court has directed the trial court to stay the action pending resolution of the criminal matter. Although a legal malpractice action "is subject to demurrer or summary judgment while a plaintiff's conviction remains intact, the court should stay the malpractice action during the period in which such a plaintiff timely and diligently pursues postconviction remedies. . . . By this means, courts can ensure that the plaintiff's claim will not be barred prematurely by the statute of limitations. This approach at the same time will protect the interest of defendants in attorney malpractice actions in receiving timely notice and avoiding stale claims." (Coscia, supra, 25 Cal.4th at pp. 1210-1211.)

Marino points out that the statute of limitations for legal malpractice actions was amended effective January 1, 2010. (Code Civ. Proc., § 340.6.) That amendment does not change our analysis. The 2010 amendment gave plaintiffs who must establish factual innocence (such as Mr. Khodayari) more time to file their legal malpractice claims. The amendment does not require courts to dismiss legal malpractice complaints that are filed before the plaintiff achieves post-conviction relief. As noted above, Coscia instructs that the trial court may stay such cases while the plaintiff diligently seeks post-conviction relief. Appellant should be given leave to amend to allege factual innocence.

b. Breach of Contract, Common Counts, and Other Causes of Action

In his briefs on appeal, Mr. Khodayari explains how he would amend his complaint to state valid causes of action for breach of contract and common counts. We conclude he should be given the opportunity to amend those causes of action as well, subject to appropriate challenge. (See Align Technology, Inc. v. Bao Tran, supra, 179 Cal.App.4th at p. 971.) Appellant has also requested leave to amend to allege additional causes of action and should also be given the opportunity to amend these additional causes of action, subject to appropriate challenge.

Disposition

The judgment is reversed. The case is remanded with instructions that the court enter an order sustaining the demurrer with leave to amend to allege factual innocence and additional causes of action subject to appropriate challenge. Appellant is awarded costs on appeal.

MALLANO, P. J. and ROTHSCHILD, J., concurs.

FootNotes


1. The facts related to the underlying criminal proceeding against Mr. Khodayari are taken from his Opening Brief on appeal in that case. Defendants Nina Marino and Kaplan Marino, APC, filed an unopposed motion asking us to take judicial notice of that brief, which motion we now grant.
2. The 17 causes of action are: (1) breach of contract, (2) unjust enrichment, (3) money had and received, (4) breach of implied covenant, (5) fraud, (6) intentional misrepresentation, (7) concealment, (8) deceit, (9) constructive fraud, (10) negligent misrepresentation, (11) negligence, (12) professional negligence, (13) breach of fiduciary duty, (14) intentional infliction of emotional distress, (15) abuse of process, (16) civil conspiracy, and (17) violations of Business and Professions Code section 17200 et seq.
3. Of course, Mr. Khodayari did not help matters when he failed to oppose the demurrer or to appear at the hearing on the demurrer.
4. We take no position on whether Mr. Khodayari will be able to prove actual innocence. Although Marino argues he will not be able to do so, such arguments are premature as we do not know the outcome of Mr. Khodayari's criminal appeal and, at this point, are addressing only his ability to amend his complaint.
5. The same reasoning leads us to reject Marino's collateral estoppel argument. In other words, because we do not agree that some or any of Mr. Khodayari's convictions were final, he is not collaterally stopped from alleging actual innocence at this time.
Source:  Leagle

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