Village Nurseries v. Greenbaum

101 Cal. App. 4th 26, 123 Cal. Rptr. 2d 555, 2002 Daily Journal DAR 9167, 2002 Cal. Daily Op. Serv. 7346, 2002 Cal. App. LEXIS 4495
CourtCalifornia Court of Appeal
DecidedAugust 9, 2002
DocketNo. G028121
StatusPublished
Cited by57 cases

This text of 101 Cal. App. 4th 26 (Village Nurseries v. Greenbaum) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Village Nurseries v. Greenbaum, 101 Cal. App. 4th 26, 123 Cal. Rptr. 2d 555, 2002 Daily Journal DAR 9167, 2002 Cal. Daily Op. Serv. 7346, 2002 Cal. App. LEXIS 4495 (Cal. Ct. App. 2002).

Opinion

Opinion

FYBEL, J.

In this legal malpractice action, plaintiff Village Nurseries, L.P., appeals from a summary judgment entered in favor of defendants [31]*31Martin B. Greenbaum, Dennis Ferentz, Greenbaum & Ferentz (collectively the Greenbaum defendants), Raymond King, and The Coulombe Law Firm. The trial court granted the Greenbaum defendants’ motion for summary judgment on the ground that plaintiff’s claims were barred by the judgmental immunity doctrine. In order to establish judgmental immunity, a defendant must prove (1) the law was unsettled at the time professional advice was rendered, and (2) the advice was based upon the exercise of informed judgment. Because neither the Greenbaum defendants nor The Coulombe Law Firm showed they exercised informed judgment when they rendered professional advice to Village Nurseries, they failed to establish the second prong of the judgmental immunity test and were not entitled to summary judgment on that basis.

The Greenbaum defendants and The Coulombe Law Firm moved for summary judgment on the ground the statute of limitations barred Village Nurseries’ claims, but the trial court denied those motions. We conclude Village Nurseries’ claims against the Greenbaum defendants and The Coulombe Law Firm were barred by the statute of limitations pursuant to Code of Civil Procedure section 340.6. Therefore, we affirm judgment in their favor.

Village Nurseries retained defendants for legal advice and services regarding perfection of liens on real property. Village Nurseries was actually injured by defendants’ alleged malpractice when a bankruptcy trustee asserted a viable argument against the validity of Village Nurseries’ liens on the ground they were not properly perfected. Village Nurseries should have discovered the facts constituting defendants’ wrongful acts or omissions and their link to the trustee’s position when Attorney King informed Village Nurseries that (1) its liens may be invalid because a statutory notice had not been served, (2) the trustee argued the liens were unperfected, (3) the judge in the case expressed doubt as to the validity of the liens, and (4) Village Nurseries should look into the possibility of legal malpractice. Code of Civil Procedure section 340.6 was not tolled as to the Greenbaum defendants and The Coulombe Law Firm because their representation of Village Nurseries ceased 17 months before the complaint was filed.

Defendant Raymond King’s notices of joinder in the summary judgment motions of the Greenbaum defendants and The Coulombe Law Firm were not motions seeking judgment in favor of King as required by Code of Civil Procedure section 437c. King did not file a separate statement. We therefore reverse the grant of summary judgment in favor of King.

[32]*32I. Facts

A. Chronology

Village Nurseries, a landscape and irrigation systems contractor, was retained by Baldwin Building Contractors (Baldwin) to provide services for various properties in Orange and San Diego Counties (the Baldwin projects). In July 1995, Baldwin filed for chapter 11 bankruptcy protection, but its owners continued doing business as debtors in possession. Village Nurseries continued to perform services for the Baldwin projects and recorded several mechanic’s liens for amounts owed Village Nurseries in connection with such services.

In August 1995, Village Nurseries retained Attorney Raymond King of Coulombe, Kottke & King for legal advice regarding the ramifications of the Baldwin bankruptcy and its impact on Village Nurseries’ ability to collect receivables on the Baldwin projects. In September 1995, Tom House, president of Village Nurseries, wrote a letter to King, stating, “I am concerned about the cost of perfecting the recorded liens we have against Baldwin work. We were told by one of our suppliers that they were able to inexpensively accomplish this through a service that filed ‘Notices of Perfection of Security Interest’ with the Bankruptcy Court per Section Code 546.” House was referring to a notice pursuant to the Bankruptcy Code under title 11 United States Code section 546(b) (section 546(b)), which has been interpreted to provide “where state law requires ‘commencement of an action to accomplish . . . perfection, or maintenance or continuation of perfection of an interest in property’ and the action has not been commenced prepetition, ‘perfection of such interest shall be maintained or continued, by giving notice within the time fixed by such law for . . . such commencement.’ ” (In re Baldwin Builders (Bankr. 9th Cir. 1999) 232 B.R. 406, 410-411, italics omitted.)

King responded to House by letter dated October 3, 1995, which stated, “In response to your inquiry regarding a cost effective means of perfecting mechanics liens, I do not believe the Bankruptcy Code Section 546 procedure outlined in your September 22, 1995 letter will be effective. To my knowledge, that Section provides a means for notifying parties in a bankruptcy that a lien is claimed. However, I believe that the only means to perfect a mechanic’s lien is to file suit in the appropriate state court in the county where the property is located.” (Italics omitted.)

In October 1995, Village Nurseries retained the Greenbaum defendants to perfect various mechanic’s liens previously filed by Village Nurseries on the [33]*33Baldwin projects. After advising House that filing foreclosure lawsuits would perfect Village Nurseries’ liens, the Greenbaum defendants filed complaints to foreclose on the mechanic’s liens in Orange and San Diego Counties (the foreclosure actions), but did not serve the complaints or otherwise prosecute the actions because of the automatic stay imposed by the Baldwin’s pending bankruptcy action. On January 26, 1996, Village Nurseries filed a proof of claim in the Baldwin bankruptcy, which listed its mechanics’ liens with a total value of $1,128,733.76.

Village Nurseries continued to perform work for Baldwin through May 1996. In June 1996, Baldwin was removed as debtor in possession and a trustee (the Trustee) was appointed. Shortly thereafter, the bankruptcy court approved an allocation order including a procedure to pay the secured creditors in the Baldwin bankruptcy. The Trustee also submitted a joint plan of reorganization, providing that mechanic’s lienholders, including Village Nurseries, were considered secured creditors and would be paid on a periodic basis.

About the same time, Village Nurseries rehired King as its bankruptcy law specialist to address the ongoing issues of the maintenance and perfection of its mechanic’s liens. In July 1996, King and Coulombe, Kottke & King terminated their professional affiliation with each other. King set up his own practice and took the Village Nurseries file with him. At some point thereafter, Coulombe, Kottke & King became The Coulombe Law Firm. On August 16, 1996, the Greenbaum defendants were formally substituted out as counsel for Village Nurseries, and Raymond King was substituted in as counsel in the foreclosure actions.

The Trustee filed a motion to transfer Baldwin’s Toy on Park property to the City of Anaheim free and clear of liens. King opposed the motion on behalf of Village Nurseries, arguing this transfer did not adequately protect the interests of Village Nurseries as a lienholder on that property.

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101 Cal. App. 4th 26, 123 Cal. Rptr. 2d 555, 2002 Daily Journal DAR 9167, 2002 Cal. Daily Op. Serv. 7346, 2002 Cal. App. LEXIS 4495, Counsel Stack Legal Research, https://law.counselstack.com/opinion/village-nurseries-v-greenbaum-calctapp-2002.