SEDGWICK, DETERT, MORAN ARNOLD LLP v. JDTP/Petersen's...hearing his demurrer to the complaint filed...

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5 10 15 20 25 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 21 22 23 24 26 27 OCf46299 I v I SEDGWICK, DETERT, MORAN & ARNOLD LLP Gregory H. Halliday (Bar No.083554) /\ I <...J gregory .halli [email protected] Frederick B. Hayes (Bar No. 165315) [email protected] 5·;6 3 Park Plaza, 17th Floor Irvine, CA 92614-8540 Telephone: 949.852.8200 Fax: 949.852.8282 Attorneys for Defendant GREGORY GLENN PETERSEN SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO SAN DIEGO POLlCE OFFICERS ) CASE NO. 37-2010-00088794-CU-PN-CTL ASSOCIA TION, ) ) Plaintiff, ) DEFENDANT GREGORY GLENN ) PETERSEN'S NOTICE OF DEMURRER v. ) AND DEMURRER TO PLAINTIFF'S ) COMPLAINT; MEMORANDUM OF JACKSON, DeMARCO, TIDUS & ) POINTS AND AUTHORITIES PECKENPAUGH, A LAW CORPORATION, ) GREGORY GLENN PETERSEN, an ) individual, MOHAMED ALIM AHMAD ) DATE:· July 2, 2010 MALIK, an individual, and DOES I-50, ) TIME: 10:30 a.m. ) DEPT. : 61 Defendants. ) ) ) ) ) ) TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on July 2, 20 I 0, at 10:30 a.m., or as soon thereafter as counsel may be heard, in Department 61 of the above-entitled Court, located at 330 West Broadway, San Diego, California 92101, Defendant Gregory Glenn Petersen will bring on for hearing his demurrer to the complaint filed by plaintiff San Diego Police Officers Association pursuant to California Code of Civil Procedure section 430.10 and 430.30. Petersen's demurrer Defendant Petersen's Demurrer To Complaint

Transcript of SEDGWICK, DETERT, MORAN ARNOLD LLP v. JDTP/Petersen's...hearing his demurrer to the complaint filed...

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SEDGWICK DETERT MORAN amp ARNOLD LLP Gregory H Halliday (Bar No083554) bull I ltJ

gregory halli daysdmacom Frederick B Hayes (Bar No 165315) fredhayessdmacom 5middot6 3 Park Plaza 17th Floor Irvine CA 92614-8540 Telephone 9498528200 Fax 9498528282

Attorneys for Defendant GREGORY GLENN PETERSEN

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

SAN DIEGO POLlCE OFFICERS ) CASE NO 37-2010-00088794-CU-PN-CTL ASSOCIA TION )

) Plaintiff ) DEFENDANT GREGORY GLENN

) PETERSENS NOTICE OF DEMURRER v ) AND DEMURRER TO PLAINTIFFS

) COMPLAINT MEMORANDUM OFJACKSON DeMARCO TIDUS amp ) POINTS AND AUTHORITIESPECKENPAUGH A LAW CORPORATION )

GREGORY GLENN PETERSEN an ) individual MOHAMED ALIM AHMAD ) DATEmiddot July 2 2010 MALIK an individual and DOES I-50 ) TIME 1030 am

) DEPT 61Defendants )

) ) ) ) )

------------~--------------)

TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD

PLEASE TAKE NOTICE that on July 2 20 I 0 at 1030 am or as soon thereafter as

counsel may be heard in Department 61 of the above-entitled Court located at 330 West

Broadway San Diego California 92101 Defendant Gregory Glenn Petersen will bring on for

hearing his demurrer to the complaint filed by plaintiff San Diego Police Officers Association

pursuant to California Code of Civil Procedure section 43010 and 43030 Petersens demurrer

Defendant Petersens Demurrer To Complaint

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is made on the grounds that the complaint fails to state facts sufficient to constitute a cause of

action Petersen requests that Plaintiff be denied leave to amend

This demurrer is based upon this Notice of Demurrer and Demurrer the attached

Memorandum of Points and Authorities the Request for Judicial Notice and exhibits all other

pleadings papers records and documentary materials on file or deemed to be on file those other

matters of which this Court mayor must take judicial notice the arguments of counsel at the

hearing on this Demurrer and upon such other evidence and materials as this Court may

consider

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOL~P

BYmiddotG~cf~ltfsmiddot ~ Imiddot Frederick B Hayes Attorneys for Defendant GREGORY GLENN PETERSEN

Defendant Petersens Demurrer To Complaint

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DEMURRER TO COMPLAINT

Defendant Gregory Glenn Petersen (Petersen) demurs to the complaint of plaintiff San

Diego Police Officers Association (the SDPOA) on the following grounds

1 The complaint fails to state facts sufficient to a cause of action See Code Civ

Proc sect 431l0(e)

DEMURRER TO FIRST CAUSE OF ACTION

Defendant Petersen demurs to the SDPOAs first cause of action labeled Attorney

Malpractice on the following grounds

1 The complaint fails to state facts sufficient to a cause of action Code Civ

Proc sect 43110(e)

WHEREFORE defendant Gregory Glenn Petersen prays that his Demurrer to the

SDPOAs complaint be sustained without leave to amend and that the court grant such other and

further relief as it deems just and appropriate

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOL LLP

BY1Nd~ I-J Gregory H Halliday Frederick B Hayes Attorneys for Defendant GREGORY GLENN PETERSEN

Defendant Petersens Demurrer To Complaint

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MEMORANDUM OF POINTS AND AUTHORITIES

I

INTRODUCTION AND SUMMARY OF ARGUMENT

This legal malpractice lawsuit by Plaintiff San Diego Police Officers Association (the

SDPOA) arises from a protracted fight between it and the City of San Diego (the City) over

retirement benefits for the CityS police officers Plaintiff alleges that the Jackson DeMarco

Tidus amp Peckenpaugh law firm (JDTP) and two attorneys including defendant Gregory Glenn

Petersen (Petersen) committed legal malpractice while representing the SDPOA in several

underlying litigation matters against the City namely SDPOA v Aguirre et al (Aguirre) and

McGuigan v City ofSan Diego et al (McGuigan) (See Compiaint ~ 9)1middot

Defendant Petersen demurs to SDPOAs legal malpractice complaint on the grounds that

it is barred by Code of Civil Procedure section 3406 the one year statute of limitations

applicable to a cause of action for legal malpractice2

In the underlying McGuigan case the trial court granted judgment in favor of the City

defendants in December 2006 In the underlying Aguirre case the trial court granted summary

judgment in favor of the City defendants and against the SDPOA in May 2007 Although both

matters were appealed Petersens attorney-client relationship with the SDPOA ended in March

2008 when Petersen left the JDTP law firm The SDPOAs complaint offers no facts that would

toll Section 3406 as against Petersen once he left JDTP Beal Bank SSB v Arter amp Hadden

LLP (2007) 42 CaL4th 503 Because the present legal malpractice lawsuit was not filed until

I The cases identified in paragraph 9 of the SDPOAs instant complaint are San Diego Police Officers Association v Aguirre et al United States District Court Southern District of California Case No 05-CV-1581 and McGuigan v City of San Diego Superior Court of San Diego County Case No GIC949883 In the McGuigan case the SDPOA was an objector in the trial court proceedings

2 All further statutory references are to the Code of Civil Procedure unless stated otherwise

The SDPOA must concede that its attorney-client relationship with Petersen terminated in March 2008 when Petersen left the JDTP law firm In an unpublished opinion arising from the McGuigan case the appellate court noted that as of April 2008 the SDPOAs original lead attorney Gregory Peterson [sic] recently left the Jackson DeMarco firm and temporarily sought to take the case with him but at this time counsel for [the SDPOA] remains the Jackson DeMarco firm See McGuigan v City ofSan Diego 2008 WL 4358551 attached as Exh 1 to Petersens Request for Judicial Notice See also Petersens Request for Judicial Notice at Exh 2 [April 2008 order in Aaron]

-4shyDefendant Petersens Demurrer To Complaint

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March 2010 more than two years after Petersens attorney-client relationship with the SDPOA

ended it is time barred by Section 3406 Because no amendment can change this result

Petersens demurrer should be sustained without leave to amend

In addition to being time-barred the SDPOAs legal malpractice action also fails as a

matter of law because the SDPOA cannot meet the causation and damages elements of its

malpractice claim In particular the SDPOA cannot establish that but for the alleged legal

malpractice it is more likely than not that the SDPOA would have achieved a more favorable

outcome Viner v Sweet (2003) 30 Ca14th 1232 1240-1243 (Viner) The purpose of this

requirement which has been in use for more than 120 years is to safeguard against speculative

and conjectural claims Viner 30 CaL4th at p 1241 citing Matteo Forge Inc v Arthur Young

amp Co (1997) 52 CalAppAth 820 832-834 This requirement serves the essential purpose of

ensuring that damages awarded for an attorneys malpractice actually -were caused by the

malpractice Matteo Forge Inc v Arthur Young amp Co supra 52 CalAppAth at p 834 In this

case the SDPOAs failure to allege facts showing that but for the alleged negligence a

different result would have been obtained is another reason why the SDPOAs complaint fails to

state sufficient facts to constitute a cause of action against Petersen

In the underlying lawsuits the SDPOA argued that retirement health benefits were vested

and therefore the City could not unilaterally modify those benefits In this legal malpractice

lawsuit the SDPOA alleges that the defendant attorneys did a poor job of presenting the vested

retirement benefits issue to the courts The SDPOA further alleges that the defendant attorneys

malpractice caused the courts in the underlying litigation matters to rule against the SDPOA in

those cases In making these allegations the SDPOA does not identify a single negligent act or

omission and the SDPOAs silence on this point is telling

The fatal defect inherent in the SDPOAs present action is that it cannot plead or

establish that the defendant attorneys caused the SDPOA any harm In its complaint the

SDPOA speculates that it could have obtained a more favorable outcome had the defendant

attorneys merely done some unspecified act or presented some unidentified argument Whether

the retirement health benefits were vested under federal law is a legal question The SDPOAs

Defendant Petersens Demurrer To Complaint

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allegations fail to even hint at what fact or legal precedent or argument should have been

presented to the courts in the underlying actions to causes them to reach a different conclusion as

to whether under federal law the SDPOAs members retirement health benefits were vested

The SDPOAs inability to prove causation is also the result of the SDPOAs ovvD acts

Although the federal law claims brought by the SDPOA in the underlying litigation were

disposed of on their merits the state law causes of action were dismissed without prejudice and

subsequently the SDPOA filed a state court action SDPOA v Aguirre et aI Superior Court of

San Diego County Case No GIC 841845 After filing this state court lawsuit the SDPOA

dismissed it on December 9 2009 through its attorney Michael Conger who is also the

SDPOAs attorney of record in the present legal malpractice lawsuit Thus state law remedies

which had they been successfully prosecuted would have obviated any claim of damage by the

SDPOA were voluntarily relinquished by the SDPOA when it dismissed its state court lawsuit

Stated otherwise because the SDPOA voluntarily terminated its lawsuit asserting the

state law claims regarding the vesting of the retirement health benefits the SDPOA is now

precluded from asserting any act or omission by the defendants in the present matter caused it

any injury Because the SDPOA chose to dismiss its state claims their eventual outcome is

necessarily in the realm of speculation and conjecture and the SDPOAs present claim fails

Finally the SDPOA cannot seriously assert that it knows what motivated the City or that

the City would not have taken other steps to reduce its exposure for pay andor retirement

benefits if only some fact had been presented or some argument made As this court wells

knows as a result of pension liabilities the City was facing a deficit that exceeded one billion

dollars Simply put the SDPOA cannot show that but for the defendants alleged negligence

it is more likely than not that the courts in the underlying litigation matters would have reached

different conclusions or that these court decisions caused the City to reduce the compensation to

the SDPOAs members when the City had already stated before the underlying litigation

matters were filed that it intended to do so The SDPOA lawsuit fails as a matter of law and

should be dismissed

Defendant Petersens Demurrer To Complaint

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II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299I v I

is made on the grounds that the complaint fails to state facts sufficient to constitute a cause of

action Petersen requests that Plaintiff be denied leave to amend

This demurrer is based upon this Notice of Demurrer and Demurrer the attached

Memorandum of Points and Authorities the Request for Judicial Notice and exhibits all other

pleadings papers records and documentary materials on file or deemed to be on file those other

matters of which this Court mayor must take judicial notice the arguments of counsel at the

hearing on this Demurrer and upon such other evidence and materials as this Court may

consider

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOL~P

BYmiddotG~cf~ltfsmiddot ~ Imiddot Frederick B Hayes Attorneys for Defendant GREGORY GLENN PETERSEN

Defendant Petersens Demurrer To Complaint

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t VICK oo~laquo bull NOUgt~ 2 8

OC46299I vI

DEMURRER TO COMPLAINT

Defendant Gregory Glenn Petersen (Petersen) demurs to the complaint of plaintiff San

Diego Police Officers Association (the SDPOA) on the following grounds

1 The complaint fails to state facts sufficient to a cause of action See Code Civ

Proc sect 431l0(e)

DEMURRER TO FIRST CAUSE OF ACTION

Defendant Petersen demurs to the SDPOAs first cause of action labeled Attorney

Malpractice on the following grounds

1 The complaint fails to state facts sufficient to a cause of action Code Civ

Proc sect 43110(e)

WHEREFORE defendant Gregory Glenn Petersen prays that his Demurrer to the

SDPOAs complaint be sustained without leave to amend and that the court grant such other and

further relief as it deems just and appropriate

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOL LLP

BY1Nd~ I-J Gregory H Halliday Frederick B Hayes Attorneys for Defendant GREGORY GLENN PETERSEN

Defendant Petersens Demurrer To Complaint

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OC462991vi

MEMORANDUM OF POINTS AND AUTHORITIES

I

INTRODUCTION AND SUMMARY OF ARGUMENT

This legal malpractice lawsuit by Plaintiff San Diego Police Officers Association (the

SDPOA) arises from a protracted fight between it and the City of San Diego (the City) over

retirement benefits for the CityS police officers Plaintiff alleges that the Jackson DeMarco

Tidus amp Peckenpaugh law firm (JDTP) and two attorneys including defendant Gregory Glenn

Petersen (Petersen) committed legal malpractice while representing the SDPOA in several

underlying litigation matters against the City namely SDPOA v Aguirre et al (Aguirre) and

McGuigan v City ofSan Diego et al (McGuigan) (See Compiaint ~ 9)1middot

Defendant Petersen demurs to SDPOAs legal malpractice complaint on the grounds that

it is barred by Code of Civil Procedure section 3406 the one year statute of limitations

applicable to a cause of action for legal malpractice2

In the underlying McGuigan case the trial court granted judgment in favor of the City

defendants in December 2006 In the underlying Aguirre case the trial court granted summary

judgment in favor of the City defendants and against the SDPOA in May 2007 Although both

matters were appealed Petersens attorney-client relationship with the SDPOA ended in March

2008 when Petersen left the JDTP law firm The SDPOAs complaint offers no facts that would

toll Section 3406 as against Petersen once he left JDTP Beal Bank SSB v Arter amp Hadden

LLP (2007) 42 CaL4th 503 Because the present legal malpractice lawsuit was not filed until

I The cases identified in paragraph 9 of the SDPOAs instant complaint are San Diego Police Officers Association v Aguirre et al United States District Court Southern District of California Case No 05-CV-1581 and McGuigan v City of San Diego Superior Court of San Diego County Case No GIC949883 In the McGuigan case the SDPOA was an objector in the trial court proceedings

2 All further statutory references are to the Code of Civil Procedure unless stated otherwise

The SDPOA must concede that its attorney-client relationship with Petersen terminated in March 2008 when Petersen left the JDTP law firm In an unpublished opinion arising from the McGuigan case the appellate court noted that as of April 2008 the SDPOAs original lead attorney Gregory Peterson [sic] recently left the Jackson DeMarco firm and temporarily sought to take the case with him but at this time counsel for [the SDPOA] remains the Jackson DeMarco firm See McGuigan v City ofSan Diego 2008 WL 4358551 attached as Exh 1 to Petersens Request for Judicial Notice See also Petersens Request for Judicial Notice at Exh 2 [April 2008 order in Aaron]

-4shyDefendant Petersens Demurrer To Complaint

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OC46299 I y I

March 2010 more than two years after Petersens attorney-client relationship with the SDPOA

ended it is time barred by Section 3406 Because no amendment can change this result

Petersens demurrer should be sustained without leave to amend

In addition to being time-barred the SDPOAs legal malpractice action also fails as a

matter of law because the SDPOA cannot meet the causation and damages elements of its

malpractice claim In particular the SDPOA cannot establish that but for the alleged legal

malpractice it is more likely than not that the SDPOA would have achieved a more favorable

outcome Viner v Sweet (2003) 30 Ca14th 1232 1240-1243 (Viner) The purpose of this

requirement which has been in use for more than 120 years is to safeguard against speculative

and conjectural claims Viner 30 CaL4th at p 1241 citing Matteo Forge Inc v Arthur Young

amp Co (1997) 52 CalAppAth 820 832-834 This requirement serves the essential purpose of

ensuring that damages awarded for an attorneys malpractice actually -were caused by the

malpractice Matteo Forge Inc v Arthur Young amp Co supra 52 CalAppAth at p 834 In this

case the SDPOAs failure to allege facts showing that but for the alleged negligence a

different result would have been obtained is another reason why the SDPOAs complaint fails to

state sufficient facts to constitute a cause of action against Petersen

In the underlying lawsuits the SDPOA argued that retirement health benefits were vested

and therefore the City could not unilaterally modify those benefits In this legal malpractice

lawsuit the SDPOA alleges that the defendant attorneys did a poor job of presenting the vested

retirement benefits issue to the courts The SDPOA further alleges that the defendant attorneys

malpractice caused the courts in the underlying litigation matters to rule against the SDPOA in

those cases In making these allegations the SDPOA does not identify a single negligent act or

omission and the SDPOAs silence on this point is telling

The fatal defect inherent in the SDPOAs present action is that it cannot plead or

establish that the defendant attorneys caused the SDPOA any harm In its complaint the

SDPOA speculates that it could have obtained a more favorable outcome had the defendant

attorneys merely done some unspecified act or presented some unidentified argument Whether

the retirement health benefits were vested under federal law is a legal question The SDPOAs

Defendant Petersens Demurrer To Complaint

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OC462991v 1

allegations fail to even hint at what fact or legal precedent or argument should have been

presented to the courts in the underlying actions to causes them to reach a different conclusion as

to whether under federal law the SDPOAs members retirement health benefits were vested

The SDPOAs inability to prove causation is also the result of the SDPOAs ovvD acts

Although the federal law claims brought by the SDPOA in the underlying litigation were

disposed of on their merits the state law causes of action were dismissed without prejudice and

subsequently the SDPOA filed a state court action SDPOA v Aguirre et aI Superior Court of

San Diego County Case No GIC 841845 After filing this state court lawsuit the SDPOA

dismissed it on December 9 2009 through its attorney Michael Conger who is also the

SDPOAs attorney of record in the present legal malpractice lawsuit Thus state law remedies

which had they been successfully prosecuted would have obviated any claim of damage by the

SDPOA were voluntarily relinquished by the SDPOA when it dismissed its state court lawsuit

Stated otherwise because the SDPOA voluntarily terminated its lawsuit asserting the

state law claims regarding the vesting of the retirement health benefits the SDPOA is now

precluded from asserting any act or omission by the defendants in the present matter caused it

any injury Because the SDPOA chose to dismiss its state claims their eventual outcome is

necessarily in the realm of speculation and conjecture and the SDPOAs present claim fails

Finally the SDPOA cannot seriously assert that it knows what motivated the City or that

the City would not have taken other steps to reduce its exposure for pay andor retirement

benefits if only some fact had been presented or some argument made As this court wells

knows as a result of pension liabilities the City was facing a deficit that exceeded one billion

dollars Simply put the SDPOA cannot show that but for the defendants alleged negligence

it is more likely than not that the courts in the underlying litigation matters would have reached

different conclusions or that these court decisions caused the City to reduce the compensation to

the SDPOAs members when the City had already stated before the underlying litigation

matters were filed that it intended to do so The SDPOA lawsuit fails as a matter of law and

should be dismissed

Defendant Petersens Demurrer To Complaint

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OC46299]vj

II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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~L NICK fElfT JlIVi(AH ARNOUh 2 8

OC4 62991 v I

In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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OC46299 I v I

452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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t VICK oo~laquo bull NOUgt~ 2 8

OC46299I vI

DEMURRER TO COMPLAINT

Defendant Gregory Glenn Petersen (Petersen) demurs to the complaint of plaintiff San

Diego Police Officers Association (the SDPOA) on the following grounds

1 The complaint fails to state facts sufficient to a cause of action See Code Civ

Proc sect 431l0(e)

DEMURRER TO FIRST CAUSE OF ACTION

Defendant Petersen demurs to the SDPOAs first cause of action labeled Attorney

Malpractice on the following grounds

1 The complaint fails to state facts sufficient to a cause of action Code Civ

Proc sect 43110(e)

WHEREFORE defendant Gregory Glenn Petersen prays that his Demurrer to the

SDPOAs complaint be sustained without leave to amend and that the court grant such other and

further relief as it deems just and appropriate

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOL LLP

BY1Nd~ I-J Gregory H Halliday Frederick B Hayes Attorneys for Defendant GREGORY GLENN PETERSEN

Defendant Petersens Demurrer To Complaint

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OC462991vi

MEMORANDUM OF POINTS AND AUTHORITIES

I

INTRODUCTION AND SUMMARY OF ARGUMENT

This legal malpractice lawsuit by Plaintiff San Diego Police Officers Association (the

SDPOA) arises from a protracted fight between it and the City of San Diego (the City) over

retirement benefits for the CityS police officers Plaintiff alleges that the Jackson DeMarco

Tidus amp Peckenpaugh law firm (JDTP) and two attorneys including defendant Gregory Glenn

Petersen (Petersen) committed legal malpractice while representing the SDPOA in several

underlying litigation matters against the City namely SDPOA v Aguirre et al (Aguirre) and

McGuigan v City ofSan Diego et al (McGuigan) (See Compiaint ~ 9)1middot

Defendant Petersen demurs to SDPOAs legal malpractice complaint on the grounds that

it is barred by Code of Civil Procedure section 3406 the one year statute of limitations

applicable to a cause of action for legal malpractice2

In the underlying McGuigan case the trial court granted judgment in favor of the City

defendants in December 2006 In the underlying Aguirre case the trial court granted summary

judgment in favor of the City defendants and against the SDPOA in May 2007 Although both

matters were appealed Petersens attorney-client relationship with the SDPOA ended in March

2008 when Petersen left the JDTP law firm The SDPOAs complaint offers no facts that would

toll Section 3406 as against Petersen once he left JDTP Beal Bank SSB v Arter amp Hadden

LLP (2007) 42 CaL4th 503 Because the present legal malpractice lawsuit was not filed until

I The cases identified in paragraph 9 of the SDPOAs instant complaint are San Diego Police Officers Association v Aguirre et al United States District Court Southern District of California Case No 05-CV-1581 and McGuigan v City of San Diego Superior Court of San Diego County Case No GIC949883 In the McGuigan case the SDPOA was an objector in the trial court proceedings

2 All further statutory references are to the Code of Civil Procedure unless stated otherwise

The SDPOA must concede that its attorney-client relationship with Petersen terminated in March 2008 when Petersen left the JDTP law firm In an unpublished opinion arising from the McGuigan case the appellate court noted that as of April 2008 the SDPOAs original lead attorney Gregory Peterson [sic] recently left the Jackson DeMarco firm and temporarily sought to take the case with him but at this time counsel for [the SDPOA] remains the Jackson DeMarco firm See McGuigan v City ofSan Diego 2008 WL 4358551 attached as Exh 1 to Petersens Request for Judicial Notice See also Petersens Request for Judicial Notice at Exh 2 [April 2008 order in Aaron]

-4shyDefendant Petersens Demurrer To Complaint

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OC46299 I y I

March 2010 more than two years after Petersens attorney-client relationship with the SDPOA

ended it is time barred by Section 3406 Because no amendment can change this result

Petersens demurrer should be sustained without leave to amend

In addition to being time-barred the SDPOAs legal malpractice action also fails as a

matter of law because the SDPOA cannot meet the causation and damages elements of its

malpractice claim In particular the SDPOA cannot establish that but for the alleged legal

malpractice it is more likely than not that the SDPOA would have achieved a more favorable

outcome Viner v Sweet (2003) 30 Ca14th 1232 1240-1243 (Viner) The purpose of this

requirement which has been in use for more than 120 years is to safeguard against speculative

and conjectural claims Viner 30 CaL4th at p 1241 citing Matteo Forge Inc v Arthur Young

amp Co (1997) 52 CalAppAth 820 832-834 This requirement serves the essential purpose of

ensuring that damages awarded for an attorneys malpractice actually -were caused by the

malpractice Matteo Forge Inc v Arthur Young amp Co supra 52 CalAppAth at p 834 In this

case the SDPOAs failure to allege facts showing that but for the alleged negligence a

different result would have been obtained is another reason why the SDPOAs complaint fails to

state sufficient facts to constitute a cause of action against Petersen

In the underlying lawsuits the SDPOA argued that retirement health benefits were vested

and therefore the City could not unilaterally modify those benefits In this legal malpractice

lawsuit the SDPOA alleges that the defendant attorneys did a poor job of presenting the vested

retirement benefits issue to the courts The SDPOA further alleges that the defendant attorneys

malpractice caused the courts in the underlying litigation matters to rule against the SDPOA in

those cases In making these allegations the SDPOA does not identify a single negligent act or

omission and the SDPOAs silence on this point is telling

The fatal defect inherent in the SDPOAs present action is that it cannot plead or

establish that the defendant attorneys caused the SDPOA any harm In its complaint the

SDPOA speculates that it could have obtained a more favorable outcome had the defendant

attorneys merely done some unspecified act or presented some unidentified argument Whether

the retirement health benefits were vested under federal law is a legal question The SDPOAs

Defendant Petersens Demurrer To Complaint

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allegations fail to even hint at what fact or legal precedent or argument should have been

presented to the courts in the underlying actions to causes them to reach a different conclusion as

to whether under federal law the SDPOAs members retirement health benefits were vested

The SDPOAs inability to prove causation is also the result of the SDPOAs ovvD acts

Although the federal law claims brought by the SDPOA in the underlying litigation were

disposed of on their merits the state law causes of action were dismissed without prejudice and

subsequently the SDPOA filed a state court action SDPOA v Aguirre et aI Superior Court of

San Diego County Case No GIC 841845 After filing this state court lawsuit the SDPOA

dismissed it on December 9 2009 through its attorney Michael Conger who is also the

SDPOAs attorney of record in the present legal malpractice lawsuit Thus state law remedies

which had they been successfully prosecuted would have obviated any claim of damage by the

SDPOA were voluntarily relinquished by the SDPOA when it dismissed its state court lawsuit

Stated otherwise because the SDPOA voluntarily terminated its lawsuit asserting the

state law claims regarding the vesting of the retirement health benefits the SDPOA is now

precluded from asserting any act or omission by the defendants in the present matter caused it

any injury Because the SDPOA chose to dismiss its state claims their eventual outcome is

necessarily in the realm of speculation and conjecture and the SDPOAs present claim fails

Finally the SDPOA cannot seriously assert that it knows what motivated the City or that

the City would not have taken other steps to reduce its exposure for pay andor retirement

benefits if only some fact had been presented or some argument made As this court wells

knows as a result of pension liabilities the City was facing a deficit that exceeded one billion

dollars Simply put the SDPOA cannot show that but for the defendants alleged negligence

it is more likely than not that the courts in the underlying litigation matters would have reached

different conclusions or that these court decisions caused the City to reduce the compensation to

the SDPOAs members when the City had already stated before the underlying litigation

matters were filed that it intended to do so The SDPOA lawsuit fails as a matter of law and

should be dismissed

Defendant Petersens Demurrer To Complaint

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II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC462991vi

MEMORANDUM OF POINTS AND AUTHORITIES

I

INTRODUCTION AND SUMMARY OF ARGUMENT

This legal malpractice lawsuit by Plaintiff San Diego Police Officers Association (the

SDPOA) arises from a protracted fight between it and the City of San Diego (the City) over

retirement benefits for the CityS police officers Plaintiff alleges that the Jackson DeMarco

Tidus amp Peckenpaugh law firm (JDTP) and two attorneys including defendant Gregory Glenn

Petersen (Petersen) committed legal malpractice while representing the SDPOA in several

underlying litigation matters against the City namely SDPOA v Aguirre et al (Aguirre) and

McGuigan v City ofSan Diego et al (McGuigan) (See Compiaint ~ 9)1middot

Defendant Petersen demurs to SDPOAs legal malpractice complaint on the grounds that

it is barred by Code of Civil Procedure section 3406 the one year statute of limitations

applicable to a cause of action for legal malpractice2

In the underlying McGuigan case the trial court granted judgment in favor of the City

defendants in December 2006 In the underlying Aguirre case the trial court granted summary

judgment in favor of the City defendants and against the SDPOA in May 2007 Although both

matters were appealed Petersens attorney-client relationship with the SDPOA ended in March

2008 when Petersen left the JDTP law firm The SDPOAs complaint offers no facts that would

toll Section 3406 as against Petersen once he left JDTP Beal Bank SSB v Arter amp Hadden

LLP (2007) 42 CaL4th 503 Because the present legal malpractice lawsuit was not filed until

I The cases identified in paragraph 9 of the SDPOAs instant complaint are San Diego Police Officers Association v Aguirre et al United States District Court Southern District of California Case No 05-CV-1581 and McGuigan v City of San Diego Superior Court of San Diego County Case No GIC949883 In the McGuigan case the SDPOA was an objector in the trial court proceedings

2 All further statutory references are to the Code of Civil Procedure unless stated otherwise

The SDPOA must concede that its attorney-client relationship with Petersen terminated in March 2008 when Petersen left the JDTP law firm In an unpublished opinion arising from the McGuigan case the appellate court noted that as of April 2008 the SDPOAs original lead attorney Gregory Peterson [sic] recently left the Jackson DeMarco firm and temporarily sought to take the case with him but at this time counsel for [the SDPOA] remains the Jackson DeMarco firm See McGuigan v City ofSan Diego 2008 WL 4358551 attached as Exh 1 to Petersens Request for Judicial Notice See also Petersens Request for Judicial Notice at Exh 2 [April 2008 order in Aaron]

-4shyDefendant Petersens Demurrer To Complaint

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OC46299 I y I

March 2010 more than two years after Petersens attorney-client relationship with the SDPOA

ended it is time barred by Section 3406 Because no amendment can change this result

Petersens demurrer should be sustained without leave to amend

In addition to being time-barred the SDPOAs legal malpractice action also fails as a

matter of law because the SDPOA cannot meet the causation and damages elements of its

malpractice claim In particular the SDPOA cannot establish that but for the alleged legal

malpractice it is more likely than not that the SDPOA would have achieved a more favorable

outcome Viner v Sweet (2003) 30 Ca14th 1232 1240-1243 (Viner) The purpose of this

requirement which has been in use for more than 120 years is to safeguard against speculative

and conjectural claims Viner 30 CaL4th at p 1241 citing Matteo Forge Inc v Arthur Young

amp Co (1997) 52 CalAppAth 820 832-834 This requirement serves the essential purpose of

ensuring that damages awarded for an attorneys malpractice actually -were caused by the

malpractice Matteo Forge Inc v Arthur Young amp Co supra 52 CalAppAth at p 834 In this

case the SDPOAs failure to allege facts showing that but for the alleged negligence a

different result would have been obtained is another reason why the SDPOAs complaint fails to

state sufficient facts to constitute a cause of action against Petersen

In the underlying lawsuits the SDPOA argued that retirement health benefits were vested

and therefore the City could not unilaterally modify those benefits In this legal malpractice

lawsuit the SDPOA alleges that the defendant attorneys did a poor job of presenting the vested

retirement benefits issue to the courts The SDPOA further alleges that the defendant attorneys

malpractice caused the courts in the underlying litigation matters to rule against the SDPOA in

those cases In making these allegations the SDPOA does not identify a single negligent act or

omission and the SDPOAs silence on this point is telling

The fatal defect inherent in the SDPOAs present action is that it cannot plead or

establish that the defendant attorneys caused the SDPOA any harm In its complaint the

SDPOA speculates that it could have obtained a more favorable outcome had the defendant

attorneys merely done some unspecified act or presented some unidentified argument Whether

the retirement health benefits were vested under federal law is a legal question The SDPOAs

Defendant Petersens Demurrer To Complaint

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OC462991v 1

allegations fail to even hint at what fact or legal precedent or argument should have been

presented to the courts in the underlying actions to causes them to reach a different conclusion as

to whether under federal law the SDPOAs members retirement health benefits were vested

The SDPOAs inability to prove causation is also the result of the SDPOAs ovvD acts

Although the federal law claims brought by the SDPOA in the underlying litigation were

disposed of on their merits the state law causes of action were dismissed without prejudice and

subsequently the SDPOA filed a state court action SDPOA v Aguirre et aI Superior Court of

San Diego County Case No GIC 841845 After filing this state court lawsuit the SDPOA

dismissed it on December 9 2009 through its attorney Michael Conger who is also the

SDPOAs attorney of record in the present legal malpractice lawsuit Thus state law remedies

which had they been successfully prosecuted would have obviated any claim of damage by the

SDPOA were voluntarily relinquished by the SDPOA when it dismissed its state court lawsuit

Stated otherwise because the SDPOA voluntarily terminated its lawsuit asserting the

state law claims regarding the vesting of the retirement health benefits the SDPOA is now

precluded from asserting any act or omission by the defendants in the present matter caused it

any injury Because the SDPOA chose to dismiss its state claims their eventual outcome is

necessarily in the realm of speculation and conjecture and the SDPOAs present claim fails

Finally the SDPOA cannot seriously assert that it knows what motivated the City or that

the City would not have taken other steps to reduce its exposure for pay andor retirement

benefits if only some fact had been presented or some argument made As this court wells

knows as a result of pension liabilities the City was facing a deficit that exceeded one billion

dollars Simply put the SDPOA cannot show that but for the defendants alleged negligence

it is more likely than not that the courts in the underlying litigation matters would have reached

different conclusions or that these court decisions caused the City to reduce the compensation to

the SDPOAs members when the City had already stated before the underlying litigation

matters were filed that it intended to do so The SDPOA lawsuit fails as a matter of law and

should be dismissed

Defendant Petersens Demurrer To Complaint

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OC46299]vj

II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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OC4 62991 v I

In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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OC46299 I v I

452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299 I y I

March 2010 more than two years after Petersens attorney-client relationship with the SDPOA

ended it is time barred by Section 3406 Because no amendment can change this result

Petersens demurrer should be sustained without leave to amend

In addition to being time-barred the SDPOAs legal malpractice action also fails as a

matter of law because the SDPOA cannot meet the causation and damages elements of its

malpractice claim In particular the SDPOA cannot establish that but for the alleged legal

malpractice it is more likely than not that the SDPOA would have achieved a more favorable

outcome Viner v Sweet (2003) 30 Ca14th 1232 1240-1243 (Viner) The purpose of this

requirement which has been in use for more than 120 years is to safeguard against speculative

and conjectural claims Viner 30 CaL4th at p 1241 citing Matteo Forge Inc v Arthur Young

amp Co (1997) 52 CalAppAth 820 832-834 This requirement serves the essential purpose of

ensuring that damages awarded for an attorneys malpractice actually -were caused by the

malpractice Matteo Forge Inc v Arthur Young amp Co supra 52 CalAppAth at p 834 In this

case the SDPOAs failure to allege facts showing that but for the alleged negligence a

different result would have been obtained is another reason why the SDPOAs complaint fails to

state sufficient facts to constitute a cause of action against Petersen

In the underlying lawsuits the SDPOA argued that retirement health benefits were vested

and therefore the City could not unilaterally modify those benefits In this legal malpractice

lawsuit the SDPOA alleges that the defendant attorneys did a poor job of presenting the vested

retirement benefits issue to the courts The SDPOA further alleges that the defendant attorneys

malpractice caused the courts in the underlying litigation matters to rule against the SDPOA in

those cases In making these allegations the SDPOA does not identify a single negligent act or

omission and the SDPOAs silence on this point is telling

The fatal defect inherent in the SDPOAs present action is that it cannot plead or

establish that the defendant attorneys caused the SDPOA any harm In its complaint the

SDPOA speculates that it could have obtained a more favorable outcome had the defendant

attorneys merely done some unspecified act or presented some unidentified argument Whether

the retirement health benefits were vested under federal law is a legal question The SDPOAs

Defendant Petersens Demurrer To Complaint

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OC462991v 1

allegations fail to even hint at what fact or legal precedent or argument should have been

presented to the courts in the underlying actions to causes them to reach a different conclusion as

to whether under federal law the SDPOAs members retirement health benefits were vested

The SDPOAs inability to prove causation is also the result of the SDPOAs ovvD acts

Although the federal law claims brought by the SDPOA in the underlying litigation were

disposed of on their merits the state law causes of action were dismissed without prejudice and

subsequently the SDPOA filed a state court action SDPOA v Aguirre et aI Superior Court of

San Diego County Case No GIC 841845 After filing this state court lawsuit the SDPOA

dismissed it on December 9 2009 through its attorney Michael Conger who is also the

SDPOAs attorney of record in the present legal malpractice lawsuit Thus state law remedies

which had they been successfully prosecuted would have obviated any claim of damage by the

SDPOA were voluntarily relinquished by the SDPOA when it dismissed its state court lawsuit

Stated otherwise because the SDPOA voluntarily terminated its lawsuit asserting the

state law claims regarding the vesting of the retirement health benefits the SDPOA is now

precluded from asserting any act or omission by the defendants in the present matter caused it

any injury Because the SDPOA chose to dismiss its state claims their eventual outcome is

necessarily in the realm of speculation and conjecture and the SDPOAs present claim fails

Finally the SDPOA cannot seriously assert that it knows what motivated the City or that

the City would not have taken other steps to reduce its exposure for pay andor retirement

benefits if only some fact had been presented or some argument made As this court wells

knows as a result of pension liabilities the City was facing a deficit that exceeded one billion

dollars Simply put the SDPOA cannot show that but for the defendants alleged negligence

it is more likely than not that the courts in the underlying litigation matters would have reached

different conclusions or that these court decisions caused the City to reduce the compensation to

the SDPOAs members when the City had already stated before the underlying litigation

matters were filed that it intended to do so The SDPOA lawsuit fails as a matter of law and

should be dismissed

Defendant Petersens Demurrer To Complaint

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OC46299]vj

II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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~L NICK fElfT JlIVi(AH ARNOUh 2 8

OC4 62991 v I

In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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OC46299 I v I

452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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OC46299 I vI

Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC462991v 1

allegations fail to even hint at what fact or legal precedent or argument should have been

presented to the courts in the underlying actions to causes them to reach a different conclusion as

to whether under federal law the SDPOAs members retirement health benefits were vested

The SDPOAs inability to prove causation is also the result of the SDPOAs ovvD acts

Although the federal law claims brought by the SDPOA in the underlying litigation were

disposed of on their merits the state law causes of action were dismissed without prejudice and

subsequently the SDPOA filed a state court action SDPOA v Aguirre et aI Superior Court of

San Diego County Case No GIC 841845 After filing this state court lawsuit the SDPOA

dismissed it on December 9 2009 through its attorney Michael Conger who is also the

SDPOAs attorney of record in the present legal malpractice lawsuit Thus state law remedies

which had they been successfully prosecuted would have obviated any claim of damage by the

SDPOA were voluntarily relinquished by the SDPOA when it dismissed its state court lawsuit

Stated otherwise because the SDPOA voluntarily terminated its lawsuit asserting the

state law claims regarding the vesting of the retirement health benefits the SDPOA is now

precluded from asserting any act or omission by the defendants in the present matter caused it

any injury Because the SDPOA chose to dismiss its state claims their eventual outcome is

necessarily in the realm of speculation and conjecture and the SDPOAs present claim fails

Finally the SDPOA cannot seriously assert that it knows what motivated the City or that

the City would not have taken other steps to reduce its exposure for pay andor retirement

benefits if only some fact had been presented or some argument made As this court wells

knows as a result of pension liabilities the City was facing a deficit that exceeded one billion

dollars Simply put the SDPOA cannot show that but for the defendants alleged negligence

it is more likely than not that the courts in the underlying litigation matters would have reached

different conclusions or that these court decisions caused the City to reduce the compensation to

the SDPOAs members when the City had already stated before the underlying litigation

matters were filed that it intended to do so The SDPOA lawsuit fails as a matter of law and

should be dismissed

Defendant Petersens Demurrer To Complaint

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OC46299]vj

II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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OC4 62991 v I

In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299]vj

II

STATEMENT OF FACTS

On March 29 2010 the SDPOA filed its present legal malpractice lawsuit against the

JDTP law firm and two attorneys - Petersen and Mohamed Alim Ahmad Malik - asserting a

single cause of action labeled Attorney Malpractice The SDPOA alleges the defendants

represented it in underlying litigation against the City identified as SDPOA v Aguirre et al and

McGuigan v City oSan Diego et al (See Complaint ~ 9) The SDPOAs complaint alleges

nine generally described breaches of the duty of care such as the failure to present sufficient

evidence to prevail on the retiree health claim in SDPOA v Aguirre et al even though such

evidence existed resulting in a reduction of retiree heaith benefits to SDPOA members (Id at

~ 11(b)) As a result of these and the other alleged breaches of the duty of care the SDPOA

seeks damages including the fees it paid to the JDTP law firm in the underlying litigation (Jd

at ~ 11(b))

The SDPOAs bare bones complaint omits several key chronological facts that are

dispositive of its claims against Petersen

(1) The McGuigan court entered judgment on the SDPOAs claims in December

2006

(2) The Aguirre court entered summary judgment in favor of the City defendants and

against the SDPOA in May 2007

(3) Petersen left the JDTP law firm in March 2008 and his attorney-client

relationship with the SDPOA terminated then

Indeed the fact that Petersen left the JDTP law firm in March 2008 is patently obvious

from an April 2008 order entered by the United States District Court Southern District of

California in Aaron et a v Aguirre et at (Aaron) Case No 06-CV -1451 a related health

benefits litigation matter filed by approximately 1800 SDPOA members In Aaron the District

Court entered an order in April 2008 requiring each of the approximately 1800 plaintiffs to sign

a substitution of attorney stating whether he or she was represented by Petersen and the Petersen

Law Firm or the JDTP law firm or someone else (RJN Exh 2)

Defendant Petersens Demurrer To Complaint

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OC4 62991 v I

In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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OC46299 I v I

452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC4 62991 v I

In other words court records firmly establish that the SDPOAs cause ofact10n for legal

malpractice against Petersen accrued no later than March 2008 As of March 2008 the SDPOA

had alleged suffered actual harm as a result of Petersens malpractice and he was not longer

representing it Accordingly the one year statute for any claim the SDPOA had against Petersen

for legal malpractice arising from the McGuigan and Aguirre matters commenced to run in

March 2008 Because the SDPOA did not file this lawsuit until March 29 2010 its claim for

legal malpractice against Petersen is time barred by Section 3406

III

DEMURRER IS PROPER WHERE ACTION IS BARRED

BY STATUTE OF LIMITATIONS

The party against whom a complaint has been filed may object by demurrer as

provided in Section 43030 to the pleading on the grounds that [tJhe pleading does not

state facts sufficient to constitute a cause of action (Code Civ Proc sect 43010 subd (e))

When the plaintiffs action is barred by the statute of limitations a general demurrer (ie

the pleading does not state facts sufficient to constitute a cause of action) is proper (Saliter v

Pierce Bros lvfortuaries (1978) 81 CaLApp3d 292300 fn 2 Iverson Yoakum Papiano amp

Hatch v Berwald (1999) 76 CalApp4th 990 995)

A demurrer is also appropriate if a pleading does not state facts sufficient to constitute a

cause of action Code Civ Proc sect 430l0e) Bockrath v Aldrich Chemical Co (1999) 21

Ca14th 7183 Here the SDPOA cannot state facts to support the causation and damages

elements of its legal malpractice cause of action Although a court must on demurrer accept as

true properly pleaded facts a demurrer does not admit contentions or conclusions of law or fact

freeman v San Diego Ass n ofRealtors (l999) 77 CaLApp4th 71 185 n 11

Under Section 43030 a demurrer can also be based on matter subject to judicial notice

is properly based on any matter of which the court is required to or may take judicial notice

(Code Civ Proc sect 43030 subd (a)) Under Evidence Code section 452(d) the court can take

judicial notice of the court records of any court of record of the United States (Evid Code sect

Defendant Petersens Demurrer To Complaint

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452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299 I v I

452(d))4 When court records subject to judicial notice disclose an absolute defense to the action

or a deficiency in the complaint the matter can be adjudicated at by way of demurrer

(Bistawros v Greenberg (1987) 189 CalApp3d 189 192 [court took judicial notice of its own

files in sustaining demurrer on ground of another action pending between same parties on same

cause1 see also Frornrnhagen v Board ofSupervisors ofSanta Cruz County (1987) 197

Ca1App3d 1292 1299 [court took judicial notice of complaint in prior action] Britz Inc v

Dow Chern Co (1999) 73 CalAppAth 177 180 [in ruling on demurrer court could take judicial

notice of prior order approving good faith settlement under Code of Civil Procedure sect 8776])

Here defendant Petersen requests that this court take judicial notice pursuant to Evidence

Code section 452(d) of the court records including court orders in the underlying actions on

which the SDPOAs present legal malpractice claims are based namely San Diego Police

Officers Association v Aguirre et al USDC Case No 05-CV -1581 McGuigan v City ofSan

Diego San Diego County Case No OIC 949883 and the action by the SDPOAs members

Aaron et al v Aguirre et at (Aaron) USDC Case No 06-CV -1451

These court records establish that as of March 2008 the SDPOA had allegedly suffered

actual injury and its attorney-client relationship with Petersen terminated Accordingly as of

March 2008 the one year statute commenced to run The SDPOAs failure to file its lawsuit

against Petersen within one year of March 2008 means its claim against him is now time barred

IV

THE ENTIRE ACTION AGAINST PETERSEN IS BARRED

BY CODE OF CIVIL PROCEDURE SECTION 3406

A The One Year Statute of Limitations Set Forth In Section 3406 Applies To

The SDPOAs Claims

The SDPOAs claims against Petersen are barred by the one year statute of limitations set

forth in Section 3406 which is the statute of limitations for all actions against attorneys for

4 Evidence Code section 452 provides as follows Judicial notice may be taken ofthe following matters (~~J (d) Records of (1) any court of this state or (2) any court of record of the United States

Defendant Petersens Demurrer To Complaint

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

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3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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OC46299 I vI

Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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0CI462991vl

alleged wrongful acts or omissions arising out of the rendition of professional services

(Crowley v Katleman (1994) 8 Ca14th 666681-682) Section 3406 states

An action against an attorney for a wrongful act or omission other than for actual fraud arising in the performance of professional services shall be commenced within one year after the plaintiff discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission or four years from the date ofthe wrongful act or omission whichever occurs first (Code Civ Proc sect 3406(a))

Where an attorney has been accused of wrongful conduct the courts recognize that

regardless of the labels attached to the pleadings allegations the gravamen of the complaint is

legal malpractice (Kracht v Perrin Gartland amp Doyle (1990) 219 CalApp3d 1019 1022-1023

(Kracht) [complaint for breach of statutory duty constructive fraud and ordinary negligence

treated as malpractice claim for purposes of upholding order sustaining demurrer without leave

to amend] Jackson v Rogers amp Wells (1989) 210 CaLApp3d 336346349 [fraud and breach of

contract theories where alleged misfeasance Were acts requiring professional judgment calls

treated as malpractice claims for assignability purposes]) California case law treats all actions

arising out of the wrongful acts or omissions of attorneys as falling under the umbrella of legal

malpractice (Pompilio v Kosmo Cho amp Brown (1995) 39 CalAppAth 1324 1329 [plaintiffs

breach of fiduciary duty cause of action for attorneys errors and omissions sounds in legal

malpractice] see also Levin v Graham amp James (1995) 37 CalAppAth 798 Thompson v

Halvonik (1995) 36 CalAppAth 657664 Jacoby v Schenkel (1995) 36 CalAppAth 1701

Radovich v Locke-Paddon (1995) 35 CalAppAth 946 966 Stoll v Superior Court (1992) 9

CalAppAth 1362 1368)

Put simply when the claim concerns an alleged injury arising by reason of an attorneys

professional negligence the claim is one for legal malpractice subject to the statute of limitations

set forth in Section 3406 (Kracht 219 CaLApp3d at pp 1022-1023) Here the thrust of the

SDPOAs claim is that the Defendants including Petersen negligently handled the underlying

litigation (Complaint ~20) The complaints allegations plainly establish that the SDPOA is

suing Defendants for alleged errors and omissions arising from the provision oflegal services

Defendant Petersens Demurrer To Complaint

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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OC46299 1 vI

3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

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DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

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4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299 IvI

with respect to underlying litigation Thus the applicable statute of limitations is Section 3406

(Kracht 219 CalApp3d at pp 1022-1023)

B The SDPOA Suffered Actual Injury When The Underlying Trial Courts

Entered Judgment Against It In The Underlying Litigation Matters

The California Supreme Court has made it clear that [a]ctual injury occurs when the

client suffers any loss or injury legally cognizable as damages in a legal malpractice action based

on the asserted errors or omissions (Jordache Enterprises Inc v Brobeck Phleger and

Harrison (1998) 18 Cal4th 739 743 (Jordache)) The Jordache court determined that the loss

or diminution of a right or remedy constitutes injury or damage Neither uncertainty of amount

nor difficulty of proof renders that injury speculative or inchoate (fd at p 744) As explained

by the Supreme Court in determining actual injury the inquiry necessarily is more qualitative

than quantitative because the fact of damage rather than the amount is the critical factor (Id

at p 752)

In Jordache the plaintiff alleged that the defendant committed malpractice by failing to

advise the plaintiff to tender a complaint filed against it to its insurance carrier (fd at p 746)

As a result of the defendants omission significant time passed before the plaintiff tendered the

complaint to the insurer (Id at p 745) The insurance carrier argued that the plaintiffs late

tender relieved its obligation to provide benefits (Ibid) The plaintiff initiated litigation against

the insurer regarding the coverage issue and the viability of the insurers late tender defense

(Ibid) The plaintiff did not file its professional malpractice claim against the defendant until

after resolution of the coverage litigation (fd at p 746)

In evaluating when the actual injury occurred under Section 3406 the California

Supreme Court concluded that in addition to incurring legal fees to prosecute the coverage

dispute the defendants alleged omissions also gave the insurers an objectively viable defense

which consequently reduced those [insurance] claims settlement value (Id at p 743)

Because the insurers objection rendered the plaintiffs claims immediately less valuable than

they were prior to the assertion of such defense and because the defense arose as a result of the

plaintiffs counsels omission the plaintiff was actually injured within the meaning of Section

Defendant Petersens Demurrer To Complaint

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OC46299 1 vI

3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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OC46299 I vI

Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

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4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299 1 vI

3406 at the time the insurers defense was asserted (ld at pp 743-744) It does not matter

whether a plaintiff is able to quantify the amount by which its claims were devalued at the time

such a defense accrued and was asserted because actual injury may well precede quantifiable

financial costs (Adams v Paul (1995) 11 CaL4th 583 591 fn 5)

Thus under Jordache the test for actual injury under section 3406 therefore is

whether the plaintiff has sustained any damages compensable in an action against an attorney

for a wrongful act or omission arising in the performance of professional services (Jordache

18 CaL4th at p 751)

With respect to the present case the SDPOA suffered actual injury in the underlying

litigation matters when the trial courts entered judgment against the SDPOA Thus it suffered

actual injury in the McGuigan matter in December 2006 and it suffered actual injury in the

Aguirre matter in May 2007

c The SDPOA Discovered The Alleged Injuries In December 2006 and May

2007

To constitute discovery as that term is used in Section 3406 a plaintiff need only be

apprised of the fact that someone has done a wrong - plaintiff need not have a legal theory or

knowledge that he has a cause of action against an attorney at that point (McGee v Weinberg

(1979) 97 CaLApp3d 798 (lvfcGee) Worton v Worton (1991) 234 CaLApp3d 1368)

Discovery for purposes of triggering the commencement of the limitations period under Section

3406 occurs when the client discovered or should have discovered the facts giving rise to a

cause of action for legal malpractice As noted by the McGee court The test is whether the

plaintiff has information of circumstances sufficient to put a reasonable person on inquiry or has

the opportunity to obtain knowledge from sources open to his or her investigation (McGee 97

CaLApp3d at p 798)

Here the SDPOA knew it had lost the McGuigan case in December 2006 and the

Aguirre case in May 2007 The SDPOA also knew that its attorney client relationship with

Petersen terminated in March 2008 when he left the JDTP law firm

Defendant Petersens Demurrer To Complaint

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Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299 I vI

Thus as of March 2008 the SDPOA had information sufficient to put a reasonable

person on inquiry The possibility that the SDPOA may not have understood or that their

attorneys at JDTP may not have told them of all of the significance of Petersens departure from

the JDTP law firm (eg the commencement of the statute as to any claims against Petersen) does

not alter the fact that the SDPOA discovered (or should have discovered) the facts which gave

rise to their legal malpractice claims against Petersen no later than March 3 2008

D Plaintiffs Suffered Actual Injury More Than One Year Before Filing Their

Complaint And The Statute of Limitations Has Not Been Tolled

Under Code of Civil Procedure section 3406 an action must be commenced one year

from discovery unless tolled because among other things the attorney continues to represent the

plaintiff regarding the specific subject matter in which the alleged act or omission occurred

(Code Civ Proc sect 3406) In this case there is no dispute that Petersens representation of the

SDPOA terminated in March 2008 when he left the JDTP law firm and ceased his representation

of the SDPOA As such there is no tolling ofthe statute in this situation for continuous

representation The present situation is somewhat analogous to Beal Bank SSB v Arter amp

Hadden LLP (2007) 42 Ca14th 503 (Beal Bank)

Beal Bank acquired loans that contained default provisions and retained the AampH law

firm to handle the collection efforts The attorney handling the matter left the AampH law firm and

the attorneys new firm took over Beal Banks representation When the collections efforts were

unsuccessful Beal Bank sued the AampH law firm and the new law firm The AampH law firm

demurred to the malpractice complaint on the theory that when the lawyer left and took the client

with him there was no need to continue to toll the statute of limitations against the AampH law

firm due to continued representation The Supreme Court agreed and held that once the case

leaves the firm the representation of the prior firm ceases and the statute of limitations clock

begins to tick against the prior firm (Beal Bank 42 Ca14th at pp 512-514)

The Supreme Court recognized that this situation may require malpractice plaintiffs to

move swiftly and perhaps act in filing a lawsuit before the underlying action was resolved but

the Supreme Court did not let this concern affect its reasoning regarding when continuous

Defendant Petersens Demurrer To Complaint

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~ liCK -rampRNOO 28

OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

-----

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC462991vl

representation tolling ceases Here the clock for the SDPOAs malpractice claims against

Petersen commenced to tick in March 2008 when he left the JDTP law firm The SDPOA did

not file its action against Petersen within one year of March 2008 and therefore its legal

malpractice claim against him is time barred

The SDPOA may argue that because it appealed from the District Court and Superior

Courts orders in the underlying Aguirre and ~McGuigan litigation matters the statute of

limitations did not commence to run until the decisions on those appeals were rendered This

argument lacks merit and was rejected by the Jordache court when it determined that a causal

nexus between the injury and the malpractice does not need to be confirmed by settlement or

adjudication (Jordache 18 Cal4th at p 744) The Supreme Court reasoned that an existing

injury is not contingent or speculative simply because future events may effect its permanency or

the amount of monetary damages eventually incurred (fd at p 754)

Thus even if the SDPOA did not know whether future events (ie their appeals) may

effect the permanency of their injury (eg ruling that retiree benefits were not vested-

Complaint at 20) they still had suffered actual injury when the District Court and Superior Court

ruled against them and any tolling of the statute of limitations ended when Petersen departed the

JDTP law firm and his attorney-client relationship with the SDPOA terminated The fact that

appeals were still pending when he departed the JDTP law firm is of no consequence because in

determining actual injury the inquiry necessarily is more qualitative than quantitative because

the fact of damage rather than the amount is the critical factor (fd at p 752) The limitations

period is not tolled even ifthe injury is in some way remediable and appreciable actual injury

does not depend on the plaintiffs ability to attribute a quantifiable sum of money to

consequential damages (Jordache 18 Ca14th at p 750)

Here the underlying court records show Petersen no longer represented the SDPOA after

March 2008 The SDPOAs complaint offers no facts that would toll Section 3406 after the one

year limitations period commenced in March 2008 Because the SDPOA did not file this action

until March 29 2010 its claims against Petersen are time barred and this demurrer should be

sustained without leave to amend as to Petersen

-14shy--------- ---shy

Defendant Petersens Demurrer To Complaint

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC46299lvl

V

PETERSENS DEMURRER SHOULD ALSO BE SUSTAINED BECAUSE THE SDPOA

HAS NOT PLEADED AND CANNOT PLEAD FACTS IN SUPPORT OF THE

CAUSATION AND DAMAGES ELEMENTS OF A CAUSES OF ACTION FOR LEGAL

MALPRACTICE

A To Prevail On A Claim For Legal Malpractice the Plaintiff Must Plead and

Prove the Defendant Caused the Plaintiffs Harm

The elements of a cause of action for professional negligence are (l) the duty ofthe

professional to use such skill prudence and diligence as other members of the profession

commonly possess and exercise (2) breach of that duty (3) a causal connection between the

negligent conduct and the resulting injury and (4) actual loss or damage resulting from the

professional negligence See ShopofJ amp Cavallo LLP v Hyon (2008) 167 CalApp4th 1489

1509 A claim for breach of contract also requires the plaintiff to prove that the defendants

breach caused the plaintiff to suffer damages See St Paul Fire amp Marin Ins Co v American

Dynasty Surplus Lines Ins Co (2002) 101 CaJApp4th 1038 1060 (An essential element of a

claim for breach of contract are damages resulting from the breach Causation ofdamages in

contract cases requires that the damages be proximately caused by the defendants breach)

The same causation test applies to both professional negligence and breach of contract claims

See Vasiion Therapeutics Inc v Foley amp Lardner LLP (SDCai 2008) 2008 WL 5147201 3 5

It is well settled that if the attorneys negligent conduct does not cause damage it

generates no cause of the action See ShopojJ 167 CaJApp4th at 1509 To show damages

proximately caused by the breach the pJaintiffmust demonstrate that but for the attorneys

malpractice it is more likely than not the plaintiff would have obtained a more favorable result

(d) See also Viner 30 Ca14th at 1240-43 Unless a party suffers damage as a consequence of

his attorneys negligence he cannot establish a cause of action for malpractice Breach of duty

causing only speculative harm is insufficient to create such a cause of action [D]amages may

5 SDPOA labels its claim as one for attorney malpractice and thus it is not clear if it intends to pursue a negligence theory a breach of contract theory or both See Complaint p 6 Regardless of whether the SDPOA pursues a tort or contract claim the same causation standard applies

-15shy----~---- ~----~~-~--~~~---------~------

Defendant Petersens Demurrer To Complaint

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OC462991 v J

not be based upon sheer speculation or surmise and the mere possibility or even probability that

damage will result from wrongful conduct does not render it actionable Thompson v Halvonik

(1995) 36 CalAppAth 657 661-62

As the California Supreme Court made clear in the seminal Viner case the crucial

causation inquiry is what would have happened if the defendant attorney had not been negligent

This is so because the very idea of causation necessarily involves comparing historical events to

a hypothetical alternative Viner 30 CaL4th at 1242 (emphasis in original) Although the label

of the test may differ from case to case the rule underlying the test is always the same to

prevail on a malpractice claim the plaintiff must demonstrate that the attorneys negligence

caused the plaintiffs harm See Viner at 1240 n 4 (noting that the causation inquiry is also

sometimes described as the case within the case or the trial within the trial)

B Causation in a Legal Malpractice Case is Appropriately Treated as an Issue

of Law Rather Than Fact When the Underlying Litigation Was Decided

Based on a Question of Law

The element of causation in a legal malpractice case is treated as an issue of law which

the underlying litigation was decided on a question of law As one California court has

explained no jury can reach its own judgment on the proper outcome of an earlier case that

hinged on an issue of law Piscitelli v Friedenberg (2001) 87 CalAppAh 953 974 quoting

with approval from Chocktoot v Smith (Ore 1977) 571 P2d 1255 1258 see also id at 971

(explaining that [i]n legal malpractice cases whether a court or jury decides the underlying

case-within-a-case [turns on] whether the issues are predominantly questions of fact or law)

C The SDPOA Cannot Establish That Had Defendants Made a Different

Argument the Plaintiff Would Have Obtained a More Favorable Outcome

The SDPOAs causation allegation against Petersen is not merely tenuous it is nonshy

existent First the SDPOA alleges that it was adversely affected before the lawsuit was filed and

Defendants were retained when the City implemented its last bet final offer at the bargaining

table which had the effect of reducing retirement health benefit As a matter of law Petersen is

not the cause of the Citys bargaining position Moreover the underlying litigation on which the

Defendant Petersens Demurrer To Complaint

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

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1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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OCI46299I v I

SDPOAs legal malpractice claims are based were part of the SDPOAs response to the Citys

reduction of the health benefits

Second Plaintiff argues that because the Defendants did not put on evidence of some

unidentified and undisputed facts or make unidentifled arguments or cite unidentified precedent

the trial courts in those matters wrongly decided issues concerning whether the SDPOAs

members retirement health benefits were vested

Whether retirement health benefits were vested under the federal law at issue in the

underlying litigation was a contested issue of law the opposing parties in the underlying action

were represented by very able counsel (the law firms of Latham amp Watkins and Seltzer Caplan

McMahon Vitek) and the legal issues were before and decided by judges after extensive

litigation briefing and argument After considering the law those judges unanimously ruled that

as a matter of law the benefits were not vested The SDPOA cannot possibly satisfy its burden

of proving by a preponderance of the evidence that this legal result was the fault of the

defendants ie that had the defendants only done something different it is more likely than not

that the questions of federal law in the underlying litigation would have been resolved

differently See Shopof[ 167 CalApp4th at 1509 Viner 30 Ca14th at 1240-43 Stated

differently whether the SDPOAs complaint is pure speculation - which it is - is a question of

law for this Court in this demurrer

In addition the same fatal flaw arises because the SDPOA through their present attorney

dismissed its state law claims The SDPOAs voluntary dismissal of its state law claims

precludes it from making the current legal malpractice claim By dismissing those claims the

SDPOA made it impossible to demonstrate but for causation in this case If the SDPOA

suffered any harm it has been on account of its own voluntary actions that have nothing to do

with Petersen and the claims alleged against him here

Lastly it is frivolous for Plaintiff to contend that the Defendants should bear

responsibility for the Citys decision to amend its Municipal Code and impose an $8800 cap on

annual retirement health benefits These Defendants have no control over the City and are not a

-17shyDefendant Petersens Demurrer To Complaint

5

10

15

20

25

1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

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By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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27

OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

5

10

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20

25

1 cause of the Citys own financial predicament and did not cause the City to decide to reduce the

2 SDPOAs members benefits before the underlying lawsuits had even been filed

3 VI

4 CONCLUSION

As discussed above there are at least two reasons why this demurrer should be sustained

6 without leave to amend First the SDPOAs complaint and court records from the underlying

7 litigation firmly establish that the SDPOAs claim against defendant Petersen is barred by the

8 one year statute of limitations applicable to legal malpractice actions Second the SDPOAs

9 allegations also firmly establish that Petersen did not cause the SDPOA any damage as a matter

oflaw

11 For these reasons defendant Petersens demurrer to Plaintiffs complaint should be

12 sustained Moreover because no amendment will change this result this demurrer should be

13 sustained without leave to amend

14

DATED May 142010 SEDGWICK DETERT MORAN amp ARNOLD LLP

17

16

By1~~tra18 Gregory H Halliday

Frederick B Hayes 19 Attorneys for Defendant

GREGORY GLENN PETERSEN

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OC46299 I v I 8shyDefendant Petersens Demurrer To Complaint

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

14 ~ -

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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PROOF OF SERVICE

San Diego Police Officers Association v Jackson Deivfarco Tidus amp Peckenpaugh et al San Diego Superior Court Case No 37-2010-00088794-CU-PN-CTL

I am a resident of the State of California over the age of eighteen years and not a party to the within action My business address is Sedgwick Detert Moran amp Arnold LLP 3 Park Plaza 17th Floor Irvine California 92614middot8540 On May 142010 I served the within document(s)

DEFENDANT GREGORY GLENN PETERSENS NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS COMPLAINT MEMORANDUM OF POINTS AND

AUTHORITIES

o FACSIMILEmiddot by transmitting via facsimile the document(s) listed above to the fax number(s) set forth on the attached Telecommunications Cover Page(s) on this date before 500 pm

MAILmiddot by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid in the United States mail at Irvine California addressed as set forth below

PERSONAL SERVICE - by personally delivering the document(s) listed above to the persltm(s) at the addressees) set forth below

o OVERNIGHT COURIER - by placing the document(s) listed above in a sealed envelope with shipping prepaid and depositing in a collection box for next day delivery to the person(s) at the addressees) set forth below via OverNite Express

SEE ATTACHED LIST

I am readily familiar with the finns practice of collection and processing correspondence for mailing Under that practice it would be deposited with the US Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business I am aware that on motion of the party served service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit

I declare under penalty of perjury under the laws of the State of California that the above is true and correct Executed on May 142010 at Irvine California

OCI463303v I

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15

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

3

4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom

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15

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San Diego Police Officers Association v Jackson Ddvfarco Tidus amp Peckenpaugh et ai SDSC Case No 37-2010-00088794-CU-PN-CTL

2 ProofofService shy Page 2

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4 I Michael A Conger Esq AhUUltys for Plaintiff Law Office of Michael A Conger San Diego Police Officers Association 16236 San Dieguito Road Suite 4-14 PO Box 9374 (858) 759-0200 - telephone

6 Rancho Santa Fe CA 92067 (858) 759-1906 facsimile congermike(aJaoLcom

7 Gregory A Long Esq Attorneys for Defendants

8 Sheppard Mullin Richter amp Hampton LLP Jackson DeMarco Tidus amp Peckenpaugh 333 S Hope Street 48 th Floor

9 Los Angeles CA 90071 (213) 617-5443 phone (213) 620-1398 - facsimile

Iglongsheppardmullincom

11 Matthew W Holder Esq

12 Sheppard Mullin Richter amp HamptonLLP 12275 EI Camino Real Suite 200

13 San Diego CA 92130-2006

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OC463303v I

Attorneys for Defendants Jackson DeMarco Tidus amp Peckenpaugh

(858) 720-8900 - phone (858) 509-3691 facsimile mholdersheppardmullincom