Jordache's Brief After Remand – Conkle, Kremer & Engel, PLC

2d Civil No.
B093126

IN THE COURT OF APPEAL
SECOND APPELLATE DISTRICT
STATE OF CALIFORNIA
DIVISION FIVE

JORDACHE ENTERPRISES, INC., et al,
Plaintiffs and Appellants,

BROBECK, PHLEGER & HARRISON, et al,
Defendants and Appellees.
___________________________________________/

APPEAL FROM THE SUPERIOR COURT OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
HONORABLE AURELIO MUNOZ, JUDGE PRESIDING
APPELLANTS’ SUPPLEMENTAL BRIEF AFTER
REMAND BY THE SUPREME COURT

William C. Conkle (SB No. 076103)
John A. Conkle (SB No. 117849)
Eric S. Engel (SB No. 105656)
Conkle, Kremer & Engel
Professional Law Corporation
3130 Wilshire Boulevard, Suite 500
Santa Monica, California 90403
(310) 998-9100

I. INTRODUCTION

Beginning in 1984, Brobeck, Phleger & Harrison led its clients into a litigation war, amassing millions of dollars in fees and costs, without ever mentioning to the clients that there might be insurance coverage for the claims asserted against them. There was coverage, but years of delay allowed the insurers a “late notice” defense and resulted in a discounted settlement of Jordache’s insurance claims. When Jordache sought to hold Brobeck accountable for its malpractice in failing to raise insurance issues, Brobeck raised its own “late notice” issue, the statute of limitations, to defeat its clients’ legal malpractice claims, asserting that the client had suffered “actual damage” as a result of Brobeck’s misconduct from virtually the first day of Brobeck’s representation. Brobeck convinced the trial court to grant summary judgment on this technical defense.

The trial court’s decision was wrong. Aside from C.C.P. § 340.6(a)(1), the “actual injury” tolling provision, Jordache briefed to the Court of Appeal three additional bases for reversal of the trial court’s judgment. First, that the “continuous representation” tolling provision of Section 340.6(a)(2) provided an independent ground for tolling the statute of limitation through at least November 1989, which was less than one year prior to date that this malpractice action was deemed filed, August 15, 1990. (App. #37 at 1884, ¶ 1) Second, the trial court had relied on inadmissible evidence – the “percipient” declaration of Brobeck’s counsel who had no personal knowledge of the facts he described. Third, the trial court had improperly entered an order containing findings that had not been made (and could not be made in light of the disputed evidence), after that court had lost jurisdiction by entering a judgment in favor of Brobeck.

This Court of Appeal held that the statute of limitations was tolled by the “actual injury” requirement of Section 340.6(a)(1). Because its holding on Section 340.6(a)(1) was dispositive of Jordache’s appeal, this Court expressly did not reach the question of whether any other tolling provision within Section 340.6 applied, the evidenciary rulings, or whether the trial court’s purported nunc pro tunc order after judgment was valid. Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 49 Cal. App. 4th 609, 56 Cal. Rptr. 2d 661 (1996) (review granted and reversed)

Brobeck obtained California Supreme Court review and reversal of this Court’s decision. The Supreme Court also addressed only the “actual injury” tolling provision, Section 340.6(a)(1), and expressly made no ruling on any other tolling provision.(1) The Supreme Court remanded to this Court for further proceedings. This Court is now faced with the task of resolving the other grounds raised by Jordache in its appeal: Section 340.6(a)(2) “continuous representation” tolling, the evidentiary rulings, and the void post-judgment order entered by the trial court.

II. STATEMENT OF FACTS

A. FACTUAL BACKGROUND OF CLAIMS AGAINST BROBECK

As this Court has previously noted, many, but not all, of the essential facts are not in dispute. An exposition of many of these facts is contained in this Court’s earlier decision in this matter.

1. Brobeck Represented Jordache in the Marciano Action

In 1984, an action was filed against Jordache by the Marcianos in the Los Angeles Superior Court. That lawsuit, one of the largest cases ever litigated in this District, was known as Marciano v. Nakash, Los Angeles Superior Court Case No. C 524 347 (the “Marciano Action”). (App. #12 at 207, ¶ 3)(2) The Marciano Action alleged that the Nakashes, Avi, Joe & Ralph, who are Jordache’s owners, had undertaken efforts through Jordache-controlled entities to manufacture and market “knock-offs” of apparel made by Guess?, a company in which the Nakashes owned a one-half interest. The Los Angeles Superior Court action was just one of a number of actions between these parties pertaining to this subject matter, in which Brobeck provided services.(3) Brobeck represented Jordache in the Marciano Action as well as in many other matters; in effect, Brobeck was Jordache’s California counsel. (App. # 13 at 504) Over the years, other firms worked with Brobeck on Jordache’s behalf in connection with the Marciano Action, and the related actions in New York and Hong Kong. Brobeck’s activities in the Marciano Action representation extended to all areas of these “related” cases, including corporate, criminal, tax, international trade, and other issues as they arose.

Two weeks after the Marciano Action was filed, Jordache advised its insurance broker, Advocate Brokerage, of the Marciano Action. (App. #33 at 1764-67) While several of the parties had insurers paying for all or part of their defense to the Marciano claims, for almost three years Jordache did not make a formal claim for defense or indemnity. (App. #24 at 1342) At the early stages of the case, Jordache did not expressly request, and Brobeck did not offer, any advice concerning the availability of insurance coverage on the Marciano Action. There was simply no discussion about potential insurance coverage for the Marciano Action at the beginning of the suit. (App. #14 at 769) Avi Nakash testified that insurance was ultimately broached as a topic between Jordache and Brobeck sometime in 1987. At a settlement conference, Mr. Nakash noticed that all the other parties were represented by insurers. Avi testified that he asked Brobeck’s lead lawyer, Dan Woods, “where’s our insurance lawyer?” Woods replied “You don’t have insurance.” (App. #24 at 1357)

2. Brobeck Continued to Perform Substantial Service to Jordache Until November 1989

Brobeck had been involved in the Marciano Action since “Day One,” structuring the original deal to acquire Guess?, and representing Jordache in connection with the first suit filed by the Marciano’s in Federal District Court. (App. #13 at 295-96) Nonetheless, in the course of the litigation of the Marciano Action, a number of law firms were retained to represent Jordache. For example, in 1986, Paul, Weiss, Rifkind, Warton & Garrison of New York was brought in “to work together with Brobeck in handling the case.” (App. #14 at 727) Three years into the Marciano Action, Jones Day Revis & Pogue was retained by Jordache to work on Jordache’s behalf. A substitution of attorneys was filed in April 1987 in which Jones Day replaced Brobeck as counsel of record in the Los Angeles Superior Court action. (App. #13 at 303-06) Despite the filing of the substitution, Brobeck continued to work in the Marciano Action with Jones Day and numerous other law firms in Los Angeles, Hong Kong, New York, Philadelphia and London. Later, the Wyman Bautzer firm was hired and continued to work with Brobeck and Jones, Day.(4)

Paul Weiss and Jones, Day were hired because Jordache had concerns about Brobeck’s handling of the Marciano Action. (App. #14 at 760) Specifically, there were concerns about Brobeck’s credibility with the trial judge, Hon. Norman Epstein. (App. # 24 at 1352-54) Throughout all of these additions of counsel, Brobeck was not ousted. In the view of both its co-counsel and its clients, Brobeck remained a member of the Jordache’s Marciano “team” to the end of the case. (App. #24 at 1351, 1354) This was expressly discussed between Avi Nakash and Brobeck partner Dan Woods at a meeting at Kennedy Airport in 1987. Mr. Nakash testified that he asked, through Mr. Woods, that Brobeck remain involved in the Marciano Action. Mr. Woods agreed, saying he did not mind an arrangement in which Brobeck continued to work on the matter with successor counsel, so long as they were not relegated to “carrying [the lead attorney’s] attache case.” (App. #24 at 1367- 68)(5) Avi Nakash’s mindset was clear: “they still represented me. Maybe they weren’t lead counsel, but they were still counsel to the Nakashes and Jordache.” (App. #24 at 1363-67, 1369) Brobeck billed Jordache $303,168.50 for legal services in the two and one half year period between April 1987 and November 1989. A few examples of Brobeck’s continuing services that were cited to the trial court include:

(a) 1987 Brobeck Services

Brobeck attorney Robert Sutcliffe, who had handled numerous matters in the litigation, worked many hours on an indemnity agreement with Jordache’s Hong Kong manufacturers of the alleged “knock-offs,” traveling to Hong Kong to deal with this aspect of the Marciano Action between May 30, 1987 and June 11, 1987. (App. #24 at 1457 & 1465) Brobeck conducted interviews with news reporters on April 17, 1987, April 21, 1987, September 1, 1987 and October 14, 1987. (App. #24 at 1435-36, 1491 & 1498) They did work regarding an offering circular and engagement letter on July 16, 1987. (App. #24 at 1476) Brobeck attorney Dan Woods continued to attend depositions on behalf of Jordache (billing, for example, more than 33 hours to prepare for and attend a deposition on September 14-18, 1987). (App. #24 at 1492) Brobeck handled issues regarding judicial disqualification on September 22, 1987. (App. #24 at 1493) Brobeck attorneys counseled regarding banking issues on October 20, 1987 and November 17, 1987. (App. #24 at 1499 & 1503) Brobeck discussed appeal issues with other Jordache counsel on November 16, 1987. (App. #24 at 1559)

(b) 1988 Brobeck Services

On January 27 & 28, 1988, Jordache’s lead counsel, Jones, Day, requested the “benefit of your analysis” from Brobeck partner and corporations expert Harold Marsh, concerning issues raised by the Marcianos. (App. #24 at 1564-68) On February 2, 1988, Brobeck offered its views as to a suitable candidate to serve as a corporate director of Guess?. (App. #24 at 1569-70) Throughout the year, Brobeck reviewed declarations and documents to be filed in support of motions in the Marciano Action. (App. #24 at 1511-12 & 1537) Brobeck’s attorneys regularly counseled regarding Jordache directorship of Guess?. (App. #24 at 1516-17)

Brobeck consulted with Jordache’s trial counsel regarding testimony at the trial of the Marciano Action. (App. #24 at 1546 & 1556) Brobeck corresponded with counsel for the Marcianos, Jordache’s adversaries, on February 16, 1989, March 13, 1989 and July 21, 1989. (App. #24 at 1545, 1550 & 1577) Brobeck’s August 31, 1989 Fee Statement to Jordache reflected charges for access to computerized legal research services, Lexis and Dialog. (App. #24 at 1551) Throughout these years, Brobeck advised Jordache’s accountants, Coopers & Lybrand, that one of its activities was “advice to Jordache respecting” the Marciano Action. (App. #24 at 1560, 1573 & 1582)

Throughout its services, Brobeck’s billing letters to Jordache stated that it was billing for services rendered in the Marciano Action. For example, the last bill that Brobeck sent stated it was “for services rendered in the month of November 1989 in the Marciano v. Nakash matter.” (App. #24 at 1586-87)

3. Brobeck Was Employed in the Marciano Action When the Insurance Claims Were Made

In August 1987, Jordache instructed its counsel to ask each of its insurance brokers to forward a copy of pleadings in the Marciano Action to Jordache’s insurers. In December 1987, Jordache retained the law firm of Conkle, Kremer & Engel to make and prosecute claims which Jordache might have against its liability insurers concerning the Marciano Action. Conkle, Kremer & Engel formally tendered the defense of the Marciano Action to Jordache’s liability insurance carriers. Shortly thereafter, Conkle, Kremer & Engel filed six lawsuits against the five insurance carriers alleging that each carrier had failed to provide a defense and had wrongfully refused to acknowledge coverage. (App. #11 at 178, ¶ 5) Jordache sought reimbursement of some $30 million in attorneys fees which it alleged it had paid to defend the Marciano Action. While Brobeck was not expressly consulted nor advised about the tender letters or the filing of the coverage lawsuits on behalf of Jordache, Brobeck knew of the filing of the claims shortly after they were filed. (App. #10 at 1088, ¶ 3)

4. The Claims Against Brobeck

On February 14, 1991, Jordache sued Brobeck on several different legal theories, each based on the claim that Brobeck committed legal malpractice when it failed to tender the Marciano Action to Jordache’s insurance carriers, or otherwise to alert the company to the possibility that the claims in Marciano Action might be covered by insurance. (App. # 13 at 290-301) By stipulation, the parties tolled the statute of limitations between August 15, 1990 and February 15, 1991. Consequently the parties agree that the Jordache lawsuit filed on February 14, 1991 is deemed to have been filed August 15, 1990. Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal. 4th 739, 76 Cal. Rptr. 2d 749, 754 (1998). As Brobeck’s services to Jordache in the Marciano Action continued through at least November 1989, the malpractice action was filed within one year after the end of Brobeck’s representation.

B. BROBECK COMMITTED MALPRACTICE BY FAILING TO ADVISE JORDACHE REGARDING POTENTIAL INSURANCE COVERAGE OF THE MARCIANOS’ CLAIMS

Jordache put forward evidence, including the declaration of the renowned attorney malpractice expert Ronald E. Mallen, that Brobeck committed the following negligent omissions: (a) failure to realize that the Marciano Action involved claims that were covered or potentially covered by insurance; (b) failure to advise Jordache concerning the potential coverage available; (c) failure to inquire or investigate into the types of insurance Jordache had; and (d) failure to give notice of the Marciano Action to insurers whose policies might provide coverage, or to suggest that Jordache or someone else give notice, or to otherwise cause notice to be given. (App. #2 at 42-43, ¶ 9; & #24 at 1330-33, ¶¶ 2-10.) Brobeck’s malpractice did not involve a failure by Brobeck to pursue litigation claims against insurers. Each of these acts or omissions occurred in the course of Brobeck’s representation of Jordache in relation to the Marciano Action, not in any litigation involving insurers. (App. #24 at 1331, ¶ 5)

That Jordache did not specifically ask for insurance advice from Brobeck is not determinative, as illuminated in Mallen & Smith’s influential treatise, Legal Malpractice (West 1995). The layman may not use the right terminology or ask the right questions, but is entitled to rely upon the consulting lawyer to describe the array of legal remedies available, alert the layperson to any apparent legal problems, and, if appropriate, indicate limitations on the retention of counsel and the need for other counsel. In the event the lawyer fails to so advise the layperson, it is also reasonably foreseeable the layperson will fail to ask relevant questions regarding the existence of other remedies and be deprived of relief through a combination of ignorance and lack or failure of understanding.

Nichols v. Keller, 15 Cal. App. 4th 1672, 1687, 19 Cal. Rptr. 2d 601 (1993). Citing Mr. Mallen’s treatise, the Nichols decision observed that “[t]he rationale is that, as between the lay client and the attorney, the latter is more qualified to recognize and analyze the client’s legal needs.” Id. at 1684.

C. PROCEDURAL BACKGROUND TO APPEAL

1. Jordache and Brobeck Filed Cross-Motions for Summary Adjudication of the Statute of Limitations

On March 14, 1995, Jordache filed a Motion for Summary Adjudication against Brobeck’s first and second affirmative defenses, each of which raised statute of limitations defenses. (App. #4 – #7) Brobeck filed a cross-motion for summary judgment based on the statute of limitations, and also a motion to disqualify Jordache’s counsel. (App. #9 – #17)

In its papers, Jordache presented competent evidence that Brobeck had continuously represented Jordache in regard to the same subject matter in which the malpractice occurred, the Marciano Action, through at least November 1989, with the effect of tolling the statute of limitations during the continuous representation. (App. #24 at 1341, ¶ 3; 1350-54; & at 1363-70 & 1556-57) Further, Jordache argued that it was restricted from pursuing claims against Brobeck while the underlying Marciano Action and insurance litigation was pending. (App. #22 at 1272) Brobeck did not object to any of the evidence offered by Jordache.

Brobeck countered by asserting that it had never represented Jordache in regard to the subject matter of “giving notice,” completely disclaiming any responsibility for Jordache’s predicament. (App. #10 at 158-60) Brobeck’s secondary defense was that any duty as to the “specific subject matter” of giving insurance coverage and notice advice devolved to Paul Weiss and Jones Day in 1987 and then later to Conkle, Kremer & Engel. (App. #10 at 159) Brobeck relied for most of its supporting evidence on a declaration of its counsel, Mr. Chanin, which was stated to be based on his “review of the documents, deposition transcripts, and other materials” from the action. (App., #12 at 183, ¶ 2) Jordache filed timely written objections to Brobeck’s evidence, and particularly to the declaration submitted by Brobeck’s counsel. (App. #29 & #44)

2. The Trial Court Entered an Order Granting Brobeck Summary Judgment on April 18, 1995

On April 18, 1995, the trial court granted Brobeck’s Motion for Summary Judgment. The court rejected a proposed order granting summary judgment that had been lodged by Brobeck prior to the hearing. (App. #39) Instead, the trial court directed that “[t]he ruling will be in accordance with the tentative.” (App. #49 at 2136) The trial court directed Brobeck to give notice of the court’s order. (App. #49 at 2137 & #50 at 2140) A Minute Order that was virtually identical to the court’s written tentative ruling was entered on the same day. (App. #50 & #51 at 2154) While the trial court is alleged by Brobeck to have concluded that Brobeck had ceased representing Jordache over the “subject matter” of the alleged malpractice no later than December 1987, when Jordache hired Conkle, Kremer & Engel to handle insurance matters, that conclusion is nowhere expressed in the trial court’s contemporaneous ruling. (App. #51 at 2145) The April 18, 1995 Minute Order provided, in pertinent part:

DEFENDANT[S’] MOTION FOR SUMMARY JUDGMENT BASED ON EXPIRATION OF THE STATUTE OF LIMITATIONS IS GRANTED. THE FACTS PRESENTED TO THIS COURT REVEAL THAT PLAINTIFFS KNEW OF THE EXISTENCE OF THE INSURANCE ISSUE AS EARLY AS 1987. DURING THE PERIO[D] OF TIME BETWEEN THE DISCOVERY OF ANY NEGLIGENCE OF DEFENDANTS AND THE INSTITUTION OF THE PRESENT LAWSUIT, PLAINTIFFS WERE DAMAGED IN THAT THEY LOST PROFITS AND HAD TO EXPEND MILLIONS OF DOLLARS IN LEGAL EXPENSES. SINCE PLAINTIFFS KNEW OF THE MALPRACTICE AND ALSO SUFFERED DAMAGES MORE THAN A YEAR PRIOR TO THE INSTITUTION OF THIS NEW LAWSUIT, THIS ACTION IS BARRED BY THE PROVISIONS OF SECTION 340.6 CODE OF CIVIL PROCEDURE.

DEFENDANT[S’] MOTION TO DISQUALIFY PLAINTIFF[S’] COUNSEL IS OFF CALENDAR AS MOOT.

DEFENDANT[S’] COUNSEL TO GIVE NOTICE.

(App. #50 at 2139-40) The contemporaneous minute order makes no reference to any evidence to support (let alone compel) a determination in Brobeck’s favor on continuous representation.

3. The Trial Court Entered Judgment on May 3, 1995, But Subsequently Entered A Second Order Granting Summary Judgment

Instead of giving notice of the trial court’s order as the trial court had ordered, counsel for Brobeck served a second proposed order along with a proposed Judgment. (App. #52) Jordache responded by serving timely objections to the second proposed order on May 1, 1995, which objections were filed with the trial court on May 2, 1995. (App. #51) Jordache asserted that the second proposed order was submitted in violation of the court’s direction and did not accurately reflect any part of the trial court’s ruling, other than that Brobeck prevailed. Instead, the second proposed order included numerous findings that were never made by the trial court, and deleted portions of the court’s actual rulings. (App. #51 at 2142-47) Jordache did not object to the form of the proposed Judgment.

Over Jordache’s objection, Brobeck lodged the second proposed order with the trial court. (See App. #52) The trial court signed and entered Brobeck’s proposed Judgment on May 3, 1995, but did not simultaneously enter the proposed order. (App. #54 & #55) On May 15, 1995, twelve days after entry of the May 3, 1995 Judgment, the trial court signed Brobeck’s second proposed order and designated the new order “nunc pro tunc as of 5/3/95.” (App. #55 at 2184)

4. This Court Reversed the Trial Court’s “Actual Injury” Conclusion

On September 18, 1996 this Court reversed the trial court’s ruling on the motions for summary judgment. This Court ruled that under section 340.6 (a)(1), Jordache had not sustained actual injury more than one year prior to the critical date of August 15, 1990. Due to this dispositive ruling, this Court did not address the other bases upon which the summary judgment motion was granted, nor the other errors raised in Jordache’s appeal. This Court stated:

because we conclude that the statute of limitations was tolled until Jordache suffered actual injury in July 1990, we need not consider whether any other tolling provision of section 340.6 applied to the facts of this case. Nor need we address Jordache’s assignments of error regarding its evidentiary objections on the motion for summary judgment, and court jurisdiction to modify summary judgment order (“nunc pro tunc”).

Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal. 4th 739, 76 Cal. Rptr. 2d 749 (1998).

5. The Supreme Court Reversed this Court’s Decision and Remanded

The Supreme Court granted review of this Court’s decision. In granting review, the Supreme Court expressly limited its own proceeding to the following issue:

Whether Jordache’s actual injury (C.C.P. § 340.6, subd. (a)(1)) from Brobeck’s allegedly negligent failure to tender defense of a third-party action to Jordache’s insurers occurred upon settlement of the subsequent coverage actions against the insurers.

On July 30, 1998, the Supreme Court reversed this Court’s decision and held that Jordache had suffered “actual injury” more than one year prior to the filing date of the action and thus the statute of limitation was not tolled by 340.6(a)(1). The Supreme Court expressly did not address the continuous representation tolling provision, stating

we do not decide the merits of Jordache’s claim that the “continuous representation” tolling provision of section 340.6, subdivision (a)(2), also applies to this case. The Court of Appeal did not reach the merits of the trial court’s ruling on that point. Our grant of review did not include this issue, and we do not resolve it. We assume other tolling provisions do not apply only for the purpose of focusing on the “actual injury” question.

Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal. 4th 739, 76 Cal. Rptr. 2d 749, 755, n. 5 (1998). In reversing this Court’s decision, the Supreme Court specified that issues remained for review on appeal:

[B]ecause the Court of Appeal did not reach the other issues Jordache raised on appeal from the trial court’s judgment, we remand the case for further proceedings consistent with this opinion.

III. THE TRIAL COURT INCORRECTLY APPLIED THE STATUTE OF LIMITATIONS

A. THE TRIAL COURT IMPROPERLY DISREGARDED JORDACHE’S EVIDENCE OF BROBECK’S CONTINUING REPRESENTATION

The statute of limitations is tolled for all purposes during the entire time that “the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.” Section 340.6(a)(2) (emphasis added). Brobeck’s representation of Jordache, including Brobeck’s failure to consider insurance issues and appropriately advise Jordache, occurred in the course of Brobeck’s services to Jordache in regard to the Marciano Action. (App. #24 at 1330-33, ¶¶ 3-10) Jordache presented strong evidence that Brobeck continued to represent Jordache in the Marciano Action through at least November 1989. (App. #24 at 1341, ¶ 3; at 1350-54, 1363-70 & 1556-57) The effective filing date of Jordache’s Complaint against Brobeck, August 15, 1990, was well within a year of Brobeck’s last services in the Marciano Action. (App. #37 at 1884, ¶ 1)

It is apparent from the April 18, 1995 Minute Order that the trial court simply ignored continuous representation as a basis for tolling the statute of limitation. (App. #50 at 2139-40) The trial court’s order makes no reference at all to the tolling provided under Section 340.6(a)(2), but focused exclusively on the actual injury issue under Section 340.6(a)(1). If the trial court had considered the issue, it could not possibly have found in Brobeck’s favor on summary judgment, because there were disputed issues of material fact as to when Brobeck’s representation terminated.

B. THE PURPOSE OF CONTINUOUS REPRESENTATION TOLLING

The continuous representation tolling provision was adopted by the legislature with relatively little discussion. What is apparent from the legislative history is that the legislature put no particular significance on the language “specific subject matter.” Rather, the legislators consistently explained that the purpose of the language of section 340.6(a)(2) was to provide tolling:

. “during the time that the attorney still represents the plaintiff in the same matter. . . .” (Legislative Counsel’s Digest, AB 298, as amended May 9, 1977, May 17, 1977 and August 17, 1977, p. 1; and Enrolled Bill Memorandum to Governor, AB 298, Sept. 15, 1977); and

. while “[t]he attorney continues to represent the plaintiff regarding the matter in which malpractice occurred.” (Assembly Third Reading, AB 298, as amended May 17, 1977; Aug. 23, 1977 Concurrence in Senate Amendments, AB 298, as amended Aug. 17, 1977).

The primary interest protected by the rule is uncontroversial:

This ‘continuous representation’ rule was adopted in order to ‘avoid the disruption of an attorney-client relationship by a lawsuit while enabling the attorney to correct or minimize an apparent error, and to prevent an attorney from defeating a malpractice cause of action by continuing to represent the client until the statutory period has expired.’ (Sen. Com. on Judiciary, Second reading analysis of Assembly Bill No. 298 (1977-1978 Reg. Sess.) as amended May 17, 1977). Laird v. Blacker, 2 Cal. 4th 606, 618, 7 Cal. Rptr. 2d 550 (1992) (emphasis added).

The California rule for continuous representation under Section 340.6(a)(2) is stated succinctly in Gurkewitz v. Haberman, 137 Cal. App. 3d. 328, 333, 187 Cal. Rptr. 14 (1982) (“Gurkewitz”): “We hold that, so long as there are unsettled matters tangential to a case, and the attorney assists the client with these matters, he is acting as [the client’s] representative.”

It is undisputed that Brobeck had an oral agreement to represent Jordache in the Marciano Action and related proceedings. There is no evidence of any limitation of the scope of Brobeck’s representation. Indeed, Brobeck’s representation plainly transcended litigation, tax, corporate, international trade, intellectual property and other areas of law, to include a virtually unlimited scope of duties in connection with Guess? and the claims by the Marcianos. (See App. #24 at Ex. 4) Jordache offered evidence that the scope of Brobeck’s representation in the Marciano Action included the duty to advise Jordache concerning insurance for the Marcianos’ claims. (App. #24 at 1330-33, ¶¶ 3-10.)

A lawyer’s ancillary duties to advise the client concerning all of the client’s rights related to the representation commence immediately and continue throughout the course of the representation.

One of an attorney’s basic functions is to advise. Liability can exist because the attorney failed to provide advice. Not only should an attorney furnish advice when requested, but he or she should also volunteer opinions when necessary to further the client’s objectives. The attorney need not advise and caution of every possible alternative, but only of those that may result in adverse consequences if not considered. * * * [E]ven when a retention is expressly limited, the attorney may still have a duty to alert the client to legal problems which are reasonably apparent, even though they fall outside the scope of the retention. The rationale is that, as between the lay client and the attorney, the latter is more qualified to recognize and analyze the client’s legal needs. The attorney need not represent the client on such matters. Nevertheless, the attorney should inform the client of the limitations of the attorney’s representation and of the possible need for other counsel. 2 Mallen & Smith, Legal Malpractice (3d ed. 1989) § 19.5, 19.28, pp. 159-162, 229-233; see also Davis v. Damrell, 119 Cal. App. 3d 883, 886-89, 174 Cal. Rptr. 257 (1981).

Nichols at 1683-84. So long as Brobeck’s representation of Jordache in regard to the Marciano Action continued in any form, Jordache’s claims were tolled under section 340.6(a)(2).

C. TERMINATION OF BROBECK’S REPRESENTATION PRIOR TO NOVEMBER 1989 CANNOT BE SUMMARILY ADJUDICATED IN BROBECK’S FAVOR

Jordache submitted evidence to the trial court that its officers understood and believed that Brobeck continued to represent Jordache in the Marciano Action through at least November 1989. (App. #24 at 1363-70) Certainly, Brobeck continued to bill Jordache for Brobeck’s services specifically in the Marciano Action, through at least November 1989. (App. #24 at 1551) In its summary judgment papers, Brobeck did not offer any evidence that its services in the Marciano Action ceased at any time prior to November 1989. Nor did Brobeck offer any evidence that the clients’ understanding of Brobeck’s continuing services was unreasonable.

Jordache provided evidence that the clients’ perspective of Brobeck’s continuous services through November 1989 was not only reasonable, but was the only possible conclusion. Brobeck continued to communicate with Jordache’s other counsel and opposing counsel in the Marciano Action, continued to provide research and advice, and continued to bill Jordache for every 1/10 of an hour of its services. The only evidence of any termination of Brobeck’s services is that Brobeck stopped billing for services after November 1989, having billed Jordache $303,168.50 for services after the April 1987 substitution. (App. #24 at 1341, ¶ 3, & 1556-57)

“It is a question of law whether an attorney-client relationship exists. However, where the evidence is conflicting, the factual basis for the determination whether an attorney-client relationship exists must be resolved before the legal question is addressed.” Ronson v. Superior Court, 24 Cal. App. 4th 94, 104, 29 Cal. Rptr. 2d 268 (1994). Where the evidence is conflicting, courts have divided on what perspective is controlling — whether the client’s perspective is the only consideration, or whether the relationship is determined objectively if the factual premise is undisputed.

The view that the client’s subjective belief controls is championed by the Third Appellate District, which wrote: “Once the client unequivocally decides that the relationship is over application of the tolling provision can no longer serve its purpose and should be applied no further.” Hensley v. Caietti, 13 Cal. App. 4th 1165, 1171, 16 Cal. Rptr. 2d 837 (1993) (“Hensley”). But even that “subjective” view has an objective component, based on the client’s and attorney’s actions. While “the question of representation should be viewed from the perspective of the client[,] * * * bare opinions are variable in firmness and susceptible to reconsideration. We need not decide whether such an opinion ends the period of representation until that opinion is acted upon.” Id. at 1172. Thus, the client’s and attorney’s actions determine their intention.

The Sixth District Court of Appeal has rejected Hensley’s subjective approach, and adopted a more objective standard. As observed in Worthington v. Rusconi, 29 Cal. App. 4th 1488, 1495, 35 Cal. Rptr. 2d 169 (1994) (“Worthington”), the facts in Hensley supported its finding. The facts in Hensley were undisputed, in that the plaintiff client admitted that, in her view, the “relationship was over” at the same point as contended by the defendant attorney. By the client asking another lawyer to represent her in place of the defendant attorney and never again having dealings with the defendant attorney, the parties acted consistently with the conclusion that the relationship was over. While the Hensley Court reached the right determination on its facts, the Worthington Court observed that the statutory language of section 340.6(a)(2) does not contemplate a subjective determination of the parties’ intent; rather “the statutory language requires an objective determination of whether the representation has ended.” Id. at 1497.

Where the facts are disputed, no objective determination can be made on summary judgment. In Worthington, like the present action, the facts were disputed. “[T]he attorney-client relationship was not in obvious jeopardy. Although plaintiff admitted she had lost confidence and trust in her attorney by the time she first met with [another attorney, who would later replace the defendant attorney], she did not manifest a desire to end Rusconi’s representation of her at that point.” Id. at 1497-98. That the client had discovered the attorney’s malpractice and no longer had trust in him was irrelevant. The Worthington court noted that “‘Trust and confidence,’ . . . ‘are not stated requirements of the continuous representation tolling provision of section 340.6, subdivision (a)(2).” Id. at 1497-98. “Continuity of representation ultimately depends, not on the client’s subjective beliefs, but rather on evidence of an ongoing mutual relationship and of activities in furtherance of the relationship.” Id. at 1498 (emphasis in original). Because the parties did not agree on the fundamental facts, as they had in Hensley, summary judgment was not possible in Worthington.(6)

Here, there is no undisputed fact that provides a basis for an objective determination that Brobeck was “outside” of continuous representation. Brobeck suggests that the date the substitution of attorneys was filed in April 1987 may provide such a date. But Brobeck’s embrace of this position is half-hearted, as well it should be in light of the hundreds of thousands of dollars in fees it billed in the Marciano Action after the substitution. Moreover, formal substitution of counsel does not itself determine that a representation is discontinued. Shapero v. Fliegel, 191 Cal. App. 3d 842, 847, 236 Cal. Rptr. 696 (1987). Brobeck also cited to the trial court the date of Jordache’s retention of new counsel, Conkle, Kremer & Engel, in December 1987, to pursue claims against insurers for wrongful failure to defend and indemnify Jordache against the Marcianos’ claims. Brobeck argued that retention of new counsel to, in part, address problems created by Brobeck’s malpractice necessarily meant that Brobeck no longer continuously represented Jordache in regard to the specific subject matter in which the malpractice occurred. (App. #38 at 1915-16)

First, Brobeck’s position is illogical and contrary to the purpose of the continuous representation tolling. Until the client has discovered the malpractice, the limitation period does not even commence, and tolling would serve no purpose. “When the client has discovered an attorney’s negligence the purpose of Code of Civil Procedure section 340.6 is to toll the period of limitations during the time that the client cannot reasonably be expected to initiate a malpractice action because to do so would disrupt an ongoing attorney-client relationship.” Hensley, at 1171.

Second, Brobeck offered absolutely no authority for its contention that the “specific subject matter” referred to in § 340.6(a)(2) can be “subdivided” in the manner desired by Brobeck. That is not the law. The fact that the client retains additional attorneys to try to rectify or mitigate the original attorneys’ malpractice does not mean that the original attorney no longer represents the client in regard to the subject matter in which the malpractice originally occurred.

In O’Neill v. Tichy, 19 Cal. App.4th 114, 25 Cal. Rptr. 2d 162 (1993), clients retained attorney Tichy to advise them on labor issues, and the actions recommended by Tichy led to the clients being cited for unfair labor practices. The clients received advice from an independent attorney that Tichy had committed malpractice, but allowed Tichy to represent them in the appeal. After losing the appeal, the clients retained counsel to pursue a malpractice claim against Tichy, but advised Tichy that they expected him to continue to pursue further appeal. The clients hired new attorneys to conduct settlement negotiations. Still later, the clients formally discharged Tichy and, within one year of the date of the formal discharge, commenced a legal malpractice action. The Court of Appeal held that the fact that the clients had consulted counsel concerning Tichy’s malpractice, and had actually retained counsel to pursue malpractice claims against Tichy, did not affect the continuous representation tolling of section 340.6(a)(2):

Id. at 120-21. (Emphasis added)

Brobeck’s argument is similar to one that was rejected as “misguided” in Baright v. Willis, 151 Cal. App. 3d 303, 309, 198 Cal. Rptr. 510 (1984). Attorney Willis was retained to prosecute the client’s damages claims arising from a work-related accident. Willis filed the worker’s compensation claim, but failed to pursue any third party complaints. The statute of limitation ran on potential third party complaints while defendant still represented plaintiff on the worker’s compensation claim. The attorney argued that the “continuous representation” tolling provision should not apply to a claim for malpractice based on failing to file third party complaints, because after the statute of limitations on third party complaints ran out, the “specific subject matter” under Section 340.6(a)(2) was effectively split so that he could only have been representing the client in regard to the pending worker’s compensation claim. The Court of Appeal held that the attorney’s attempt to “subdivide” his representation “insults logic and the clear meaning and purpose of section 340.6.” Id. at 309. The scope of the attorney’s representation does not change based on the attorneys’ failure to pursue some of the claims that were within the scope of the attorneys’ services.

D. THE RECENT CASE, CROUSE v. BROBECK, SUPPORTS A DETERMINATION IN JORDACHE’S FAVOR

The very recent decision of Crouse v. Brobeck, Phleger & Harrison, 98 C.D.O.S. 8691, 98 Daily Journal D.A.R. 12051 (Fourth Dist. Court of Appeal, 11/25/98) (“Crouse”), considered at length the issue of what constitutes continued representation. In Crouse, an attorney named Boatright, who worked at Brobeck, represented Crouse concerning a 1988 sale of Crouse’s limited partnership interest in a company called “Med-Trans,” for which Crouse received a promissory note. In 1989, Boatright left Brobeck and joined another firm. In 1990, Crouse hired Boatright (at the different firm) to negotiate a restructuring of the promissory note. The restructuring failed in September 1990 because Boatright was unable to deliver the original promissory note, which he had lost. A few weeks later, in October 1990, Boatright negotiated a different, less favorable restructuring. Also in October 1990, Crouse learned from independent lawyers that Boatright’s loss of the note was negligent. Nonetheless, Boatright continued to represent Crouse until July 1993 to collect proceeds from the restructured note.

Through the effect of a tolling agreement (like the one between Brobeck and Jordache), Crouse’s malpractice action against Boatright and Brobeck was deemed filed as of December 1993. The timeliness of the action was dependent entirely on the continuous representation tolling provision, section 340.6(a)(2). Crouse contended that Boatright had continued to represent her regarding the sale of her limited partnership interest through July 1993. Boatright disagreed, contending that his representation had been “subdivided,” just as Brobeck argues today.

According to Boatright, his negligence occurred during his representation of Crouse concerning the original note, which he argued ended in October 1990. Crouse at 98 Daily Journal D.A.R. 12054. Boatright contended that his representation as to the restructured note was not the same “specific subject matter” as his representation as to the original note. The parties agreed that no negligence had occurred in the negotiation or handling of the restructured note, and Boatright urged that his representation as to the original note, which was the only representation during which negligent acts occurred, had ended in October 1990, more than one year prior to the December 1993 commencement of the malpractice action.

The Fourth District disagreed with Boatright’s analysis. Crouse offered evidence that Boatright’s engagement encompassed all negotiations and transactions regarding the sale of Crouse’s limited partnership interest. Crouse also cited other facts, including Boatright’s billing statements: Boatright had continued to bill Crouse for services under the matter label “Med-Trans.”

The Court held that “the test for whether the attorney has continued to represent a client on the same specific subject matter is objective, and ordinarily the representation is on the same specific subject matter until the agreed tasks have been completed or events inherent in the representation have occurred.” Crouse, 98 Daily Journal D.A.R. 12055, citing Worthington at 1496-97. The Court concluded, “although Boatright advised Crouse about the sale of her Med-Trans partnership interest for which she received the note, the fact the note was later transformed into the new note does not make Boatright’s later representation in collecting the new note representation on a different specific subject matter.” Crouse, id. The Court relied on the O’Neill holding that “so long as there are unsettled matters tangential to a case, and the attorney assists the client with these matters, he is acting as his representative, and the statute of limitations is tolled.” O’Neill at 121, quoting Gurkweitz at 333. The Court also cited the treatise by Mallen & Smith, stating “The activities allegedly constituting the continuous representation must relate to the main task or particular undertaking in which the error occurred . . . . * * * The focus should be on the objectives of the prior retention and whether the present activities fall within those objectives.” As a matter of law, the undisputed facts showed Boatright’s continuing representation in the same specific subject matter as his representation at the time of the loss of the note, through July 1993. Crouse at 98 Daily Journal D.A.R. 12056.

Crouse demonstrates that no different analysis of continuing representation applies to an attorney who continues to represent a client after the client knows of the attorney’s malpractice. Whether the client still possesses full “trust and confidence” in the attorney is irrelevant to the statutory tolling provision. O’Neill at 120; Worthington, at 1498-99. The Crouse Court recognized that it is the attorney’s choice to continue to represent the client, as much as it is the client’s choice to continue to work with the attorney. “The statutory price for the attorney’s availing himself of the continuing representation benefit is the tolling of the statute of limitations on a malpractice claim against him. The attorney may decline continued representation to preserve the defense, or he may waive the defense by continuing to represent the client.” Crouse, at 12059. Where the attorney has elected to continue working with the client, and continue billing the client, the attorney is not permitted to later claim that he “wasn’t really” representing the client in order to receive the benefit of the statute of limitation.

The reasoning of Crouse controls the present action. Mallen declared in this case, just as he wrote in his treatise, that advice concerning insurance coverage fell within Brobeck’s representation of Jordache in the Marciano Action. (App. #24 at 1330-32) Those objectives remained the same throughout Brobeck’s representation of Jordache in the Marciano Action.

E. THERE IS AT LEAST AN ISSUE OF FACT AS TO CONTINUOUS REPRESENTATION

Jordache presented, at minimum, evidence sufficient to establish a question of fact as to when Brobeck ceased its representation of Jordache in regard to the specific subject matter in which the malpractice had occurred. (App. #24 at 1341, ¶ 3; 1350-54, 1363-70 & 1413-1587) As the Supreme Court has reminded, it is a “well-settled principle that in legal malpractice actions, statute of limitations issues . . . are at base factual inquiries.” Adams v. Paul, 11 Cal. 4th 583, 588, 46 Cal. Rptr. 2d 594 (1995). The trial court erred when it disregarded Jordache’s evidence without comment.

Brobeck has urged two principal points to avoid continuous representation tolling, neither of which can justify summary judgment: (1) “Jordache was contractually forbidden from looking to Brobeck for insurance advice after December 1987” when it signed the California Attorney Contingent Fee Contract with Conkle, Kremer & Engel (App. #313); (2) Brobeck’s activities on behalf of Jordache within the last year prior to the effective date of filing of the malpractice action, August 15, 1989, were “de minimis” and “sporadic.” (Respondents’ Brief at 35 & 40, emphasis in original.) Brobeck’s arguments may raise a question of fact as to continuous representation, but they do not justify summary judgment in Brobeck’s favor.

1. Brobeck is Not Permitted to Subdivide its Representation to Avoid the Tolling Statute

First, Brobeck persists in trying to subdivide its responsibilities in relation to the Marciano Action, even though it cites no authority permitting such agile carving of duties to its client. Brobeck’s primary thrust is at the Contingent Fee Contract, urging that it “forbids” Jordache from obtaining insurance advice from Brobeck.(7) The Contingent Fee Agreement provides in pertinent part as follows:

Clients [Jordache] retain Attorneys [Conkle, Kremer & Engel] for the purpose of making and prosecuting any claims Clients . . . may have against any liability insurer on the basis of the Marciano Action. Clients have not retained other counsel to prosecute such claims. Clients have had other agents and attorneys make claims to insurers, but upon executing this agreement, Clients confer exclusive authority over any such insurance claims pertaining to the Marciano Action to Attorneys.

(App. # 313) The “exclusive authority” granted to Conkle, Kremer & Engel is “over any such insurance claims pertaining to the Marciano Action” that were previously made by other agents and attorneys to insurers, for the purpose of “making and prosecuting any claims Clients . . . may have against any liability insurer. . . .” Nowhere does the agreement suggest that the client cannot obtain insurance advice from Brobeck or anyone else. No one has ever asserted that Brobeck was required to prosecute Jordache’s claims against liability insurers, which was the sole purpose of Conkle, Kremer & Engel’s representation. Brobeck’s attempt to subdivide its responsibilities fails as a matter of fact, even if there were any authority to support such an effort.

The type of “subdivision of representation” that Brobeck urges finds no support in the statutory language, the legislative history, or cases that have considered section 340.6(a)(2). One reason is that Brobeck’s proposed “subdivision” is a slippery slope, with little to guide clients, lawyers and courts in the future. Imagine, for example, the common circumstance of a lawyer representing a client against multiple defendants. If one of the defendants obtains a dismissal based on lack of personal jurisdiction due to the lawyer’s negligence (for example, the lawyer fails to present available evidence to defeat a motion to quash summons), but the action continues against the remaining defendants, when does the lawyer’s representation of the client in the “specific subject matter” end? When the one defendant was dismissed, or when the action is concluded against the remaining defendants? Would it make any difference if the client hired another lawyer to continue pursuing the same claim against the escaped defendant by filing a new action in another jurisdiction? Or if the escaped defendant became effectively judgment proof, by retreating to an inaccessible foreign jurisdiction? Or if the escaped defendant was the only “deep pocket”?

If the negligent lawyer were a Brobeck attorney, he would assert that the “specific subject matter” was limited to the defendant who got away, and the continuous representation as to that specific subject matter ended while the lawyer continued to represent the client against the remaining defendants. The Brobeck lawyer would be emboldened if the client hired another lawyer to continue the claim against the defendant in another jurisdiction, urging that the client obviously was no longer relying on the Brobeck lawyer for that service. The Brobeck lawyer would argue the legal proposition that each claim against each defendant is a separately triable claim. The Brobeck lawyer would cite to the legislative purpose of the statute. The Brobeck lawyer would assert that the client knew of the error, had lost trust and confidence in the lawyer (at least in relation to the defendant who escaped jurisdiction), and that the Brobeck lawyer was no longer allowed any opportunity by the client to correct his error. In other words, the Brobeck lawyer would make all the same arguments that Brobeck makes in this action.

But does it make sense to conclude that the lawyer’s continuous representation ceased as of the day one defendant was dismissed, and the clock started ticking on the client’s malpractice claim despite the lawyer’s continued representation of the client in the same action, on the same claims, against other defendants? The answer is provided in substantial part by the O’Neill decision, which concluded that such questions raise issues that cannot be resolved in the lawyer’s favor on summary judgment:

We are confronted with the situation of clients who suspect their attorney has committed malpractice, retain malpractice counsel to investigate such a claim, yet continue to utilize their attorney to perform services related to the matter in which the malpractice is suspected. * * * Under the plain language of section 340.6, subdivision (a)(2) the statute of limitations for professional negligence was tolled until the date respondents ceased to represent appellants on the specific matter in which the malpractice allegedly occurred. The record reveals a triable issue of material fact concerning that date. There is evidence that respondents continued to bill appellants for work done on “the specific subject matter in which the alleged wrongful act or omission occurred” (§ 340.6, subd. (a)(2)) until the date of their formal discharge as appellants’ attorneys. However, what they were authorized to do and the extent of their involvement is uncertain; there is also evidence that another attorney took over the subject matter at issue at an earlier date. As Gurkewitz concluded, “. . . so long as there are unsettled matters tangential to a case, and the attorney assists the client with these matters, he is acting as his representative,” and the statute of limitations is tolled. (Gurkewitz v. Haberman, supra, 137 Cal.App.3d at p. 333.) In light of this conflicting evidence on a material fact affecting the statute of limitations’ bar, summary judgment cannot be sustained.

O’Neill, at 120-21 (emphasis added). In the same manner, Brobeck’s argument that it is entitled to summary judgment must fail. At most, Brobeck’s position raises a question of fact as to when continuous representation in the specific subject matter ended.

2. Brobeck’s 1989 Representation was Not De Minimus

Brobeck’s effort to portray its conduct in the last year of the Marciano Action as “de minimus” is insulting. Brobeck did not offer any evidence of any agreement, communication or defining event that occurred at the “one year mark” that could possibly justify treating its activities after the “one year mark” any differently from its activities prior to that time. Brobeck has cited no authority to support its argument that the Court must turn a blind eye to the attorneys’ continuous services that were performed the day, week, month or year before the “final year” in the malpractice countdown.

Brobeck argues that its services must have been de minimis because “Brobeck charged only $1,791 for its time” during the last year. (Respondents’ Brief, at 41 (emphasis in original).) Many would disagree that $1,791 can be characterized as “de minimis.” But more significantly, Brobeck has not cited a single authority for the proposition that the amount of money charged (nor the number of hours incurred) by counsel has any bearing on the continuing representation analysis. Prevailing cases give no weight at all to the dollar amount charged by the attorney during the last year of service.

IV. THE TRIAL COURT IMPROPERLY OVERRULED JORDACHE’S OBJECTIONS TO THE INADMISSIBLE EVIDENCE ON WHICH BROBECK BASED ITS SUMMARY JUDGMENT MOTION

Jordache lodged written objections to the evidence offered by Brobeck in support of its summary judgment motion. The objections specified the portions of evidence offered that were inadmissible, advanced the specific legal grounds for exclusion, and were made well in advance of the hearing, as permitted by C. C. P. § 437c(d). The objections were thus properly presented and preserved for review on appeal. See People v. Morris, 53 Cal. 3d 152, 190, 279 Cal. Rptr. 720 (1991). The trial court, however, completely ignored Jordache’s objections.

Declarations, particularly those submitted in support of summary judgment motions, must be admissible evidence. Snider v. Snider, 200 Cal. App. 2d 741, 748, 19 Cal. Rptr. 709, (1962) (“Snider”). The declarant must demonstrate his personal knowledge by affirmative evidence, and establish that he is competent to testify to the matters stated, before setting forth assertedly admissible evidence. C.C.P. § 437c(d); LASC R. 9.21(c); Hayman v. Block, 176 Cal. App. 3d 629, 637, 222 Cal. Rptr. 293 (1986) (“Hayman”). Simple conclusions as to competency and personal knowledge are inadequate. Snider at 748.

Declarations by attorneys for parties to the litigation are sufficient only if the facts stated are matters of which the attorney must be presumed to have knowledge, i.e., facts concerning the course of the lawsuit, as opposed to the underlying facts on which the lawsuit is based. Otherwise, the declaration does not meet the personal knowledge requirement, and the declarant/attorney is incompetent to testify. Maltby v. Shook, 131 Cal. App. 2d 349, 353, 280 P.2d 541 (1955) (Affidavit by counsel held to contain “not a single statement therein which shows the affiant possesses facts within his personal knowledge to which he would be competent to testify”). Declarations containing hearsay, factual and legal conclusions and opinion are improper. Hayman at 638. A declaration based upon hearsay or conclusions and which contains no competent evidence is of no value in a summary judgment motion. Witchell v. De Korne, 179 Cal. App. 3d 965, 947-75, 225 Cal. Rptr. 176 (1986).

It is clear that the declaration submitted by Brobeck’s counsel, Mr. Chanin, was entirely inadmissible. From the outset, Mr. Chanin declared that his knowledge is “based on my personal review of documents, deposition transcripts and other materials produced” during this action. (App. #12 at 183, ¶ 2) With this introduction, Mr. Chanin established that his entire declaration is inadmissible hearsay, and improperly conclusory, and that Mr. Chanin lacked the personal knowledge required for his declaration to constitute competent evidence. (See App. #44 at 2006-8)

The inadmissibility of Mr. Chanin’s declaration was amply demonstrated by its contents, based on nothing more than Mr. Chanin’s conclusions from discovery as to whether certain events did or did not occur during 1984 through 1990, a period during which Mr. Chanin (1) was not counsel of record in this action (which didn’t exist until 1991), (2) was completely uninvolved in the Marciano v. Nakash Action, and (3) was completely uninvolved in Jordache’s insurance litigation. (See, e.g., App. #12 at 186-88, 195-96 & 202-03, ¶¶ 19, 28, 52, 56 and 86) Mr. Chanin’s “testimony” was gross speculation. Mr. Chanin also purported to provide authentication for numerous documents as to which he could have no personal knowledge, and which were not authenticated by any other means. For just one example, in paragraph 50 of his declaration Mr. Chanin claims William Conkle identified and authenticated Exhibit 45 as his notes. The cited deposition transcript shows that when shown Exhibit 45 and asked if they were his notes, William Conkle answered: “No.” (App. #12 at 194 ¶ 50; & W. Conkle Depo. at 401-402)

The trial court should have sustained all of Jordache’s evidentiary objections. With virtually no factual support, Brobeck’s summary judgment motion was required to be denied.

V. THE TRIAL COURT IMPROPERLY ATTEMPTED TO MODIFY THE ORDER GRANTING SUMMARY JUDGMENT AFTER ENTRY OF JUDGMENT

As described above, the trial court granted summary judgment on April 18, 1995, and the same day entered a Minute Order stating its basis for the ruling. (App. #50) The trial court did not ask any party to prepare a proposed order (indeed, the trial court rejected a proposed order previously submitted by Brobeck), but instead ordered “Defendant[s’] counsel to give notice.” (App. #39; #49 at 2137; & #50 at 2140) Nonetheless, Brobeck’s counsel prepared and submitted a new proposed order along with a proposed Judgment. (App. #52) Jordache timely objected to the proposed order. (App. #51)

The trial court signed and entered the proposed Judgment on May 3, 1995. (App. #54) On May 15, 1995, twelve days after entry of the May 3, 1995 Judgment, the trial court signed Brobeck’s second proposed order and designated that new order “nunc pro tunc as of 5/3/95.” (App. #55 at 2184) That May 15, 1995 order, however, was entered without jurisdiction and can have no bearing on this appeal.

Trial courts have inherent authority to reconsider and modify their interim rulings “until those rulings become final by entry of judgment.” Ziller Electronics Lab GmbH v. Superior Court, 206 Cal. App. 3d 1222, 1230, 254 Cal. Rptr. 410 (1988). A “judgment, no matter how designated, is the final determination of the rights of the parties in an action.” Passavanti v. Williams, 225 Cal. App. 3d 1602, 1606, 275 Cal. Rptr. 887 (1990).

A court may reconsider its order granting or denying a motion and may even reconsider or alter its judgment so long as judgment has not yet been entered. Once judgment has been entered, however, the court may not reconsider it and loses its unrestricted power to change the judgment. It may correct judicial error only through certain limited procedures such as motions for new trial and motions to vacate the judgment.

Id. at 1606 (emphasis omitted). “Until entry of judgment, the court retains complete power to change its decision as the court may determine; it may change its conclusions of law or findings of fact. Phillips v. Phillips, 41 Cal. 2d 869, 874, 264 P.2d 926 (1953). After judgment a trial court cannot correct judicial error except in accordance with statutory proceedings.” Nave v. Taggart, 34 Cal. App. 4th 1173, 40 Cal. Rptr. 2d 714 (1995). If a party desires to have the court modify its findings, it is the party’s obligation to request that the judgment not be entered until the findings are modified, or to timely move to vacate the judgment so that erroneous findings can be corrected. The party is not permitted to take no action and expect the appellate court to ignore the impropriety or beneficently grant relief. Id. at 1177-78.

Here, virtually every rule concerning the entry of an order was violated. The trial court entered a written order on April 18, 1995, which order did not specify that any further order would be entered. Rule 391 of the California Rules of Court was satisfied. The trial court’s order at the time of the hearing (both oral and written) specifically directed Brobeck’s counsel to “give notice,” not to prepare a new order. Instead of giving notice, Brobeck’s counsel submitted a new order. The new order bore only passing resemblance to the order already entered. No action was taken to vacate the existing order of April 18, 1995. The Judgment was entered, based on the existing April 18, 1995 order. Once the Judgment was entered, the trial court was without authority to modify the order on which the Judgment was based. Yet, with Brobeck’s prodding, the trial court purported to enter a second order granting summary judgment on May 15, 1995 (“nunc pro tunc” to the date of entry of the Judgment), without ever seeking to vacate either the existing April 18, 1995 order or the May 3, 1995 Judgment.

In short, everything that was done by way of entry of an order granting summary judgment after April 18, 1995 was beyond the court’s authority. The May 15, 1995 “nunc pro tunc” order is a nullity, and the findings reflected in that order can have no bearing here.

VI. CONCLUSION

The Judgment should be reversed. Summary adjudication in favor of Jordache should be granted. The evidence presented by Jordache establishes as a matter of law that Brobeck continued to represent Jordache in the same subject matter in which the malpractice occurred until less than one year prior to the filing of this action. Alternatively, the grant of summary judgment in favor of Brobeck must be reversed. At minimum, a question of fact exists as to the date of termination of Brobeck’s continuous representation of Jordache in the same matter in which the malpractice occurred, and summary judgment in favor of Brobeck must be reversed.

Dated: December 24, 1998 William C. Conkle,
John A. Conkle
Eric S. Engel, members of
Conkle, Kremer & Engel
Professional Law Corporation

By: _____________________
Eric S. Engel
Attorneys for
Plaintiffs and Appellants

1. Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal. 4th 739, 76 Cal Rptr. 2d 749 (1998).

2. “App. #___” refers to the Joint Appendix filed herein, at the referenced Index Tab Number and page.

3. The related actions included: Georges Marciano, et al. v. Joe Nakash, Civ. No. 7910 (Delaware Court of Chancery); Guess?, Inc. v. Lee Seck Mon, 1986, No. 63 (Hong Kong Ct. of Appeals); Guess?, Inc. v. Lee Seck Mon, 1986, No. A 604 Supreme Ct. of Hong Kong), Guess? v. Robert Speigelman, Case No. 87-963 WMB(Kx)(U.S.D.C. D.C. Ca); Guess? v. Ctavio Pena, et al. Case No. 89-4716 WMB (Kx) (U.S.D.C., C.D. Ca); United States Attorney Investigation, Southern District of New York. (App. #12 at 200-201; App. #35 at 1840; Avi Nakash v. Georges Marciano, No. 87-08391 FFF (Tx) U.S.D.C. CD Ca); Jordache Enterprises, Inc. v. Georges Marciano, Index No. 1465-90 N.Y. Sup. Ct.); Ralph Nakash v. Dept. of Justice, No. 88 Civ. 1481 (CHT) (U.S.D.C. SDNY)

4. Even after the Jones Day firm came on the scene in March 1987, Brobeck continued to be involved in a myriad of activities in all the Marciano matters. For example, Brobeck’s own bills reflect Brobeck work regarding Hong Kong documents (App. #24 at 1419); Grand Jury matters (App. #24 at 1418); 5th Amendment privilege issues (App. #24 at 1418); Agendas for Guess? Board Meeting and Board of Director issues (App. #24 at 1427, 1439, 1452); Excess compensation of Guess? employees (App. # 24 at 1428); U.S. Attorney and tax matters (App. #24 at 1436); and travel to Hong Kong (App. #24 at 1457). Moreover, Brobeck continued to receive “new assignments on [the] case,” after the substitution. (App. #24 at 1449)

5. This meeting occurred on April 1, 1987, not sometime in March, as Mr. Nakash recalled. The meeting is reflected in the contemporaneous Brobeck billing records. (App. #24 at 1422)

6. Similarly, in Nichols, summary judgment could not be granted to a defendant lawyer who claimed that the plaintiff client had not relied upon him after the matter was assigned to another attorney who associated in as counsel. “[P]laintiff’s reliance upon defendant, or lack thereof, is a triable issue of material fact.” Nichols, at 1688.

7. It is extremely unlikely that an agreement “forbidding” the client from consulting other counsel would be enforceable, even if it did exist. Aside from the serious policy concerns such a monopolistic term would raise, it would inevitably clash with the client’s absolute right to discharge its attorney at any time for any reason. Fracasse v. Brent, 6 Cal. 3d 784, 790, 100 Cal. Rptr. 385 (1972).