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C.A. Reverses Malpractice Award Against Van Nuys Law Firm
Opinion Says Plaintiff Failed to Prove ‘Collectability’ of Underlying Claim, for Which She Alleges Attorneys’ Services Fell Short; Segal Writes Separately to Ask if Requirement Is ‘Good Rule’
By a MetNews Staff Writer
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MICHAEL AKHIDENOR attorney |
Div. Seven of this district’s Court of Appeal on Friday reversed a professional negligence award against a Van Nuys attorney and his law firm, finding that although the plaintiff showed malpractice, she had failed to prove that she could have collected on an underlying action—an essential element of the malpractice cause of action and a requirement that Justice John L. Segal challenges in a concurring opinion as a “bad rule.”
In the majority opinion, authored by Presiding Justice Gonzalo Martinez and joined in by Justice Natalie P. Stone, the court reversed the $91,734 award on the professional negligence claim, due to a lack of proof as to “collectability,” but affirmed the accompanying award of $25,000 based on emotional distress damages in connection with her breach-of-fiduciary-duty cause of action.
Martinez said the emotional distress damages award was justified because there was evidence that the firm acted with intentional misconduct by bullying the plaintiff into signing a substitution of attorney form on the day she was required to respond to a motion for discovery sanctions.
Justice John L. Segal concurred in the majority’s opinion but wrote separately to ask:
“Why does a legal malpractice plaintiff have to prove a judgment in the underlying action would have been collectible? And is that a good rule?”
Landlord Action
The dispute arose after plaintiff Shalome Kaushansky in March 2014 retained Stonecroft Attorneys APC and its sole principal, Michael Akhidenor—collectively referred to in the opinion as “Stonecroft”—to represent her in a legal action against her landlord relating to alleged water leaks, recurrent electrical problems, and harassment.
On July 24, 2014, the firm filed a complaint on her behalf, asserting causes of action for breach of the implied warranty of habitability and negligent maintenance. Over the course of the next year, Stonecroft did almost nothing to advance Kaushansky’s case and noone appeared on her behalf for scheduled hearings, responded to discovery requests, or conferred with opposing counsel.
After Stonecroft was substituted out as counsel, she was unable to find another attorney and settled for $2,500.
On June 24, 2016, Kaushansky filed her malpractice complaint against the firm and Akhidenor. Following a bench trial, Los Angeles Superior Court Judge Theresa M. Traber found in favor of the plaintiff on the professional negligence and breach of fiduciary duty causes of action.
On appeal, Stonecroft does not dispute Traber’s factual findings of misconduct but argues that the plaintiff failed to prove that the landlord had access to funds to cover the $91,734.29 in damages.
Martinez noted that the only potential evidence as to the solvency of the landlord was an email, introduced to refresh the plaintiff’s memory about when the building was sold, indicating that she had found out that the owner had sold the complex in March 2014 for $11 million. Saying “the email itself held no evidentiary value,” he opined that it could not support a conclusion that the landlord had sufficient funds to pay the damages.
Segal’s View
Segal wrote:
“As the majority describes, there are Court of Appeal cases holding the plaintiff in a legal malpractice case has the burden to prove the judgment the plaintiff would have obtained in the underlying action was collectible….In my view, the rule is legally and economically misguided. I can think of no other area of the law where the plaintiff, to obtain a civil judgment awarding compensatory damages, has to prove not only the elements of the cause of action, but also that the defendant has the financial ability to pay the judgment. Other than entitlement to punitive damages…, the defendant’s ability to pay the judgment is irrelevant.”
Pointing out that the requirement “ignores the economic reality that all judgments, regardless of the ability of the judgment debtor at a particular point in time to pay them, have value” as they may be assigned, sold and transferred to creditors, he said that “[c]ollection agencies and attorneys representing judgment creditors are very patient beasts and routinely collect on judgments over time.”
He pointed to the 1960 Court of Appeal decision by this district’s Div. Two in Campbell v. Magana as the answer to “how did we get what I think is a bad rule?” The Campbell court declared that “one who establishes malpractice on the part of his attorney in prosecuting or defending a lawsuit must also prove that careful management of it would have resulted in recovery of a favorable judgment and collection of same.”
Closer Look
Remarking “let’s take a closer look at that case,” Segal commented:
“[T]he plaintiff in Campbell failed to prove by a preponderance of the evidence two elements of the case within the case: breach and causation. Because the defendant was ‘not legally liable to [the] plaintiff’…in the underlying case, the plaintiff could not prevail in the subsequent legal malpractice case. Fair enough. But that’s not really a collectability issue; that’s a failure to prove the merits of the case within the case.”
Under these circumstances, he opined that “Campbell does not stand for the proposition a legal malpractice plaintiff must prove the judgment he or she would have obtained was collectible” and argued “I recognize the collectability train has left the legal malpractice station, but I would get off here.”
Turning to California Supreme Court cases addressing the issue, he said they similarly involved disputes where the plaintiffs failed to prove the merits of the underlying case.
However, he concluded:
“Though I believe Campbell and its progeny do not support a rule requiring a legal malpractice plaintiff to prove the underlying judgment would have been collectible, Kaushansky does not argue the rule does not apply to her.”
The case is Kaushansky v. Stonecroft Attorneys APC, 2025 S.O.S. 652.
Kaushansky was represented on appeal by Sebastian M. Medvei of the Glendale firm Medvei Law Group. Acting on behalf of Stonecroft was West Los Angeles sole practitioner Edward A. Hoffman.
Copyright 2025, Metropolitan News Company