Thursday, March 28, 2002
Page 1
C.A. Rejects Malpractice Suit Growing Out of Failed Downtown Project, Says Plaintiff Waited Too Long
By KENNETH OFGANG, Staff Writer/Appellate Courts
A lawsuit by developers who sued their lawyers after their plan for a mixed-use downtown development was nixed by Los Angeles officials has been rejected by this district’s Court of Appeal.
First Street Plaza Partners and the other would-be developers of the First Street Project waited too long to sue Cox, Castle & Nicholson, LLP and LeBoeuf, Lamb, Greene & MacRae, LLP, Presiding Justice Paul A. Turner wrote Tuesday in an unpublished opinion for Div. Five.
The developers sued the law firms in December 1997, months after a Los Angeles Superior Court judge dismissed their $26 million law suit against the city for abandoning the First Street Project. The mixed-use development, including a city office building, would have been built near Alameda and First streets.
The project was envisioned in the 1980s, before the crash of the Southern California real estate market. A contract was negotiated between the developers and the City Administrative Office, and the City Council and then-Mayor Tom Bradley approved a CAO report setting forth the terms of the contract.
But no contract was formally signed, and the city’s view of the project changed after the election of Richard Riordan as mayor in 1993. The council voted in 1994 not to go ahead with the deal.
The developers’ suit against the city was dismissed, in part, based on failure to comply with City Charter Sec. 385, which sets forth technical requirements that must be complied with before a contract is binding on the city.
In suing their former lawyers, the developers claimed that the lawyers were negligent in failing to advise them that they did not have a binding contract with the city and in not taking steps to create a contract.
They further claimed that the Cox firm was negligent in advising them to pursue unwinnable litigation and not advising them of the requirements of Sec. 385.
While the suit was pending, the Supreme Court decided Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739. The case holds that the one-year limitations period in legal malpractice action begins to run when the client suffers “actual injury” as a result of its lawyers’ negligence, even if the underlying litigation has not been concluded.
Based on that ruling, Los Angeles Superior Court Judge Kurt Lewin, who has since retired, held that the developers’ suits against the LeBoeuf and Cox firms were time-barred and granted summary judgment.
Turner, writing Tuesday for the Court of Appeal, said the trial judge was correct in applying the Supreme Court ruling retroactively.
The general rule, Turner explained, is that appellate rulings apply to all cases pending in the trial courts. The recognized exceptions—when retroactive application would be unfair or contrary to public policy—are narrow and don’t apply to this case, the jurist said.
“…Jordache did not announce a new rule of law” or overrule “long-standing and widespread practice,” Turner explained. Prior rulings on similar issues, the jurist said, suggested that a Supreme Court majority, confronted with an appropriate case, might reach the result it did in Jordache, the presiding justice said.
The case was argued in the Court of Appeal by Bruce A. Broillet of Greene, Broillet, Taylor, Wheeler & Panish for the developers, by Alan Jay Weil of Gaims, Weil, West & Epstein for LeBoeuf Lamb, and by Stuart N. Senator of Munger, Tolles & Olsen for Cox Castle.
The case is FSPP Limited Partnership v. LeBoeuf, Lamb, Greene & McRae, B146610.
Copyright 2002, Metropolitan News Company