By Patrick Maloney and Sam Fogas, The Maloney Firm, APC

Absent extenuating circumstances, the one-year statute of limitations for legal malpractice actions begins to run at the time the client suffers harm and either discovers or through reasonable diligence should have discovered facts concerning the attorney’s neglect. But in a recently published decision, the California Court of Appeal seems to hold that the statute of limitations may in some circumstances run even before the client has suffered any appreciable out of pocket loss.

The Statute of Limitations Clock Starts Before the Harm

In October 2019, the California Court of Appeal muddied when the statute of limitations begins to run when the Court published Sharon v. Porter (2019) 41 Cal.App.5th 1. Elise Sharon (“Sharon”) had been awarded a default judgment in the amount of $17,846.55—despite her attorney Peter Porter’s (“Porter”) failure to plead monetary damages in the Complaint. Compounding the problem, the judgment debtor never paid the default judgment amount.

Sharon eventually hired a new attorney to recover the $17,846.55. Sharon’s new attorney spoke with Porter, and both agreed that the default judgment was likely void for failure to seek specific monetary damages in the initial Complaint. When the new attorney attempted to recover the default judgment from the judgment debtor more than a year after that discussion, the judgment debtor moved to vacate the judgment. The court ultimately granted the motion, holding the default judgment was void because the complaint did not plead damages. Having now suffered the loss of her judgment, Sharon sued Porter for legal malpractice for failing to plead monetary damages in the original case.

Porter immediately moved for summary judgment on the grounds that the period to bring a legal malpractice claim had lapsed. The trial court disagreed, and Porter appealed. In reversing the trial court, the Court of Appeal held that the client had suffered actual harm sufficient to start the statute of limitations when the void judgment was entered, not when it was vacated. Thus, because over one year had passed since Sharon became aware that the judgment was likely void (i.e., through her attorney’s communications with Porter), and because Sharon failed to file a legal malpractice claim within a year of those communications, Sharon’s suit was time-barred by the statute of limitations.

Viability of Legal Malpractice Claims Will Require Greater Initial Investigation Going Forward

Going forward, attorneys will have to conduct greater due diligence with respect to potential clients with legal malpractice claims, investigating what the potential client knew and when. If the client suspects legal malpractice more than a year prior to filing his or her legal malpractice suit, the statute of limitations may have passed and the client may no longer has a viable claim, regardless of when the client suffered appreciable harm.

About the Authors: Patrick Maloney and Sam Fogas

The founding shareholder of The Maloney Firm, APC, Mr. Maloney represents attorneys and clients in disputes over legal fees and legal malpractice. Mr. Fogas is a civil litigation attorney at The Maloney Firm, APC. If you have questions regarding this article, contact Patrick Maloney at pmaloney@maloneyfirm.com and sfogas@maloneyfirm.com.
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