(This article appeared in "Los Angeles Daily Journal")
A case involving the failure of an attorney to file a case before the expiration of the statute of limitations is sometimes called a "blown statute case." A blown statute would seem to be a slam-dunk legal malpractice case, assuming that the underlying case would have been won. However, there are many instances when the statute of limitations is tolled or extended. For example, was the previous lawyer run over while on the way to the courthouse? Or was his former client knocked unconscious? Perhaps his former client's negligent surgeon was out-of-state for several weeks, or declared bankruptcy. The expiration of one year does not necessarily mean that the plaintiff's rights were lost.
If a client presents a case that is based upon the failure of the previous attorney to file a complaint before the statute of limitations expired, the second attorney should make sure that it has, in fact, expired. If the subsequent attorney files a legal malpractice case, unaware that the statute has not expired, he or she -- and not the previous attorney -- will have caused the harm when the statute expires while the matter is under his or her control.
Out-of-State Travel: Code of Civil Procedure section 351 provides that a cause of action does not accrue while a defendant is out of the state. In other words, for every day a defendant is absent from the state, the statute of limitations is tolled. There are a few exceptions to this statute. It does not apply, for example, to defendants engaging in interstate commerce, or to licensed California drivers or cars registered in California in automobile accident cases. However even in an automobile case, the statute may be tolled if the plaintiff proves that reasonable efforts to locate a defendant were unsuccessful.
An Example of Tolling For Out-of-State Travel: Assume that the underlying basis of a client's legal malpractice case is a physician's medical negligence in August. Many physicians attend conferences, travel, or vacation out of state. For example, if the doctor attends a week-long "medical conference" in Las Vegas in October, spends ten days skiing in Colorado during the winter, and vacations in Hawaii for a week in April, the statute of limitations would expire nearly a month later than it otherwise would have.
Proving Absence From the State: In one case, an enterprising investigator was given the assignment of proving the defendant's absence from the state. He telephoned the defendant and announced that he was calling from a game show. Responding to a question, the defendant admitted that she was out-of-state for two weeks during the previous year. [O'Laskey v. Sortino (1990) 224 Cal.App.3d 241.] More traditional forms of fact finding would include inquiry by deposition or by interrogatory, and requests for production of office calendars, airline tickets, hotel bills, and charge-card receipts. In a recent case, I discovered in the defendant-doctor's resume that he had delivered lectures in out-of-state venues.
It has been said that "when your only tool is a hammer, everything looks like a nail." "Hammering out an agreement" at a settlement conference is not the only way to avoid the trap of ongoing contentious litigation. There are many ADR tools for the parties to consider ranging from binding arbitration to mediated litigation management agreements.
A Bankruptcy Filing May Toll the Statute: Assume a situation where an attorney has accepted a legal malpractice case based on the failure of the previous attorney to file a complaint within one year. The attorney keeps the case in his office and files the malpractice case nearly a year later. The attorney later discovers that the defendant in the underlying case had filed for bankruptcy before the original statute of limitations expired, but the petition had been dismissed six months later.
The filing of a petition with the bankruptcy court operated as an automatic stay of the commencement of a judicial action against the debtor, and the statute of limitations was suspended under Code of Civil Procedure section 356. Thus, the period between the filing of the bankruptcy petition and the cessation of the stay was added to the applicable statute of limitations period. Plaintiff's second attorney is now exposed to possible liability because the statute of limitations had not expired when he was consulted by the client. It expired after he had been retained to enforce the plaintiff's rights and incorrectly assumed that the only remedy was a malpractice case.
Other Possible Jurisdictions May Provide a Forum: An attorney should ascertain whether the client with the possible legal malpractice case can file his underlying action somewhere else. Many states have statutes of limitation which are longer than in California. The second lawyer who sues the previous lawyer for not filing suit within one year, may later learn, too late, that he could have protected his client's rights by filing the case in another jurisdiction with a longer statute. For example, in Ferens v. John Deere Co., 110 S.Ct 1274 (1990), the plaintiff claimed injury as a result of a defective tractor. The injury occurred in Pennsylvania which had a one-year statute of limitations. However, there was a two-year statute in Mississippi, where the defendant corporation was located. More than one year after the injury, the plaintiff filed his lawsuit in federal court in Mississippi, and then moved to transfer the case to Pennsylvania. The U.S. Supreme Court approved the procedure.
Partial Payment by Insurance Company: Insurance Code section 11583 provides that if an insurance company has made partial payment on a personal injury case, without notifying the injured person of the statute of limitations, and the person is not represented by an attorney, the statute is tolled, as to the insured defendant, from the time of the partial payment until the notice is given.
Incorrect Legal Remedy Or Forum Pursued By Plaintiff's Lawyer: In Elkins v. Derby (1974) 12 Cal.3d 410, an injured man commenced a worker's compensation action which was dismissed by the WCAB more than one year after the injury after finding that plaintiff was not covered as an "employee" and, therefore, not entitled to benefits. When he subsequently filed a Superior Court action to recover for his injuries, defendants asserted that it was barred by the statute of limitation. In finding for the plaintiff, the Supreme Court held that if the defendant is not prejudiced by the delay, the running of the limitations period is tolled when an injured person has several legal remedies and, reasonably and in good faith, pursues one. This applies also to actions filed in federal court but dismissed for lack of jurisdiction. [Addison v. State (1978) 21 Cal.3d 313.]
Equity Based Decisional Rule of Tolling: "Courts may construe implicit exceptions where purely technical application of procedural rules would result in manifest injustice." [Elkins v. Derby, supra.] This principle follows the so-called "equity based decisional rule of tolling." [Bollinger v. National Fire Ins. Co. (1944) 29 Cal.2d 399.]Application of this concept was used in an unusual case where the plaintiff's attorney, who was crossing Civic Center Drive in Santa Ana, on his way to the courthouse to try a case, was hit by a car and seriously injured. While he was incapacitated, the statute of limitations expired. In a decision that explored numerous tolling provisions, the Court of Appeal held that the statute of limitations was tolled, finding statutory authority in Civil Code section 3531, the codification of the maxim of jurisprudence, "The law never requires impossibilities." [Lewis v. Superior Court (1985) 175 Cal.App.3d 366.]
State Bar Takes Over Attorney's Practice: If a plaintiff has not yet filed suit and was represented by an attorney whose practice was taken over by the State Bar, Code of Civil Procedure section 353.1 extends the applicable statute of limitations by six months from the entry of the order.
Unconsciousness of Plaintiff: When a person is "insane," the statute of limitations does not run against him. [Code of Civil Procedure section 352(a).] This also applies to a person who is in a coma or unconscious. In Feeley v. Southern Pacific Transportation Co. (1991) 234 Cal.App.3d 949, the plaintiff was in a coma for twelve days after being knocked unconscious while on the defendant's premises. He filed suit one year and one day afterward. The Court of Appeal held that the statute was tolled while he was unconscious.
Death of the Defendant or Plaintiff: If a potential plaintiff or defendant dies before the expiration of the statute of limitations, and the cause of action survives, an action may be commenced within one year after the date of death, and the time otherwise limited for the commencement of the action does not apply. [Code of Civil Procedure sections 366.1, 366.2.]
Action for Damages Against Felon: Assume that a claimant's husband is killed by a driver who is subsequently convicted of felony drunk driving. Code of Civil Procedure section 340.3 provides that suit may be brought within one year after judgment is pronounced. If judgment is stayed, the tolling stays in effect until the stay is lifted. A stay does not include the time during appeal or probation.
Injured Employee Does Not File Timely Action But Employer Does: An injured employee has one year to sue a third-party tortfeasor for his general and special damages. An action by the employer or its insurance carrier for the compensation benefits it paid is governed by the same time limitation. Labor Code section 3853 provides that when an action is brought against a third party by either the employer, the employee may, at any time before trial on the facts, join as party plaintiff, even though more than one year had passed from the date of his injury.CONCLUSION: AVOIDING MALPRACTICE
What should an attorney do when a client presents a case that appears to be barred by the statute of limitations? Whether the failure to file was due to the client's delay or the negligence of the prior attorney, the procedure is the same. The attorney should determine whether the statute may have been tolled. The attorney who advises a client that the statute of limitations has expired may incur liability if the statute of limitations has been tolled or extended. If the facts cannot be readily ascertained, a lawsuit immediately filed may protect the client's rights. Investigation and discovery can then be undertaken to determine whether the action is really barred by the statute of limitations.© John P. Blumberg, 1997