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holding that "defendant must prove the facts necessary to enjoy the benefit of a statute of limitations"
Summary of this case from Government of Virgin Islands v. LansdaleOpinion
S070599
Filed December 30, 1999
Appeal from the Superior Court, San Diego County, No. 657873, Robert Carroll Baxley, Judge.
McKenna Cuneo, Nugent Newnham, Michael H. Fish; Thompson and Thompson and Peter R. Thompson for Plaintiff and Appellant.
Terence J. Mix, in pro. per.; and Julie Sullwood Hernandez for Defendants and Respondents.
For purposes of applying the one-year-from-discovery limitation on commencement of attorney malpractice actions in Code of Civil Procedure section 340.6, subdivision (a) (section 340.6(a)), who bears the burden of proving when the plaintiff discovered, or through the use of reasonable diligence should have discovered, the facts constituting the defendant's alleged malpractice? As explained below, we hold the defendant bears that burden.
Code of Civil Procedure section 340.6 (section 340.6) provides, in its entirety:
"(a) 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 of the wrongful act or omission, whichever occurs first. In no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist:
(1) The plaintiff has not sustained actual injury;
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred;
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this subdivision shall toll only the four-year limitation; and
(4) The plaintiff is under a legal or physical disability which restricts the plaintiff's ability to commence legal action.
(b) In an action based upon an instrument in writing, the effective date of which depends upon some act or event of the future, the period of limitations provided for by this section shall commence to run upon the occurrence of such act or event."
Background
In October 1992, plaintiff Arlayna Samuels filed her complaint in this attorney malpractice action, amending it three days later to allege defendants Terence J. Mix and Mix, Sneathern Brown (collectively defendant or Mix) negligently had advised her to settle, for an inadequate amount, a personal injury claim stemming from injuries she attributed to ingesting the medication L-tryptophan. Samuels pleaded she first learned of Mix's negligence after November 1991, upon discovering that Mix had substantially understated to her the actual value of her claim.
On March 29, 1993, Mix answered, denying all the allegations of the complaint and alleging numerous affirmative defenses, including that every cause of action in this lawsuit is barred by an applicable statute of limitations, including, but not limited to, section 340.6 of the Code of Civil Procedure.
The superior court granted Mix's motion to bifurcate the proceedings and separately try the statute of limitations issue. Mix moved in limine for an order burdening Samuels to establish, by a preponderance of the evidence, that the statute of limitations had not run; the court granted Mix's motion.
At the bifurcated trial, only plaintiff Samuels and attorney Donald Hildre, whom Samuels previously had consulted, testified. As the Court of Appeal explained, Samuels, who suffered from an incurable blood and muscular disease she attributed to ingesting L-tryptophan, retained defendant Mix in May of 1990 to represent her in a personal injury lawsuit against the drug's manufacturer, Showa Denko. Showa Denko offered to settle for $400,000, but Samuels, thinking the case worth $2 million, inquired of Mix regarding the value of her claim. Mix told Samuels the case was not worth as much as Samuels thought. Characterizing Showa Denko's offer as "very good" and the best he had seen, he recommended she accept it because Showa Denko might file for bankruptcy.
In December of 1990, Samuels, on Mix's advice, accepted Showa Denko's settlement offer. In October of the following year, her medical condition deteriorated. Samuels met briefly with Hildre, an attorney specializing in L-tryptophan cases whom she had met through a support group, about the possibility of reopening her case against Showa Denko. She brought him certain documents. In November 1991, Samuels told Hildre she had settled with Showa Denko for $400,000. Thereafter, in early 1992, Samuels obtained from Mix a copy of the settlement agreement and conveyed it to Hildre.
Hildre referred Samuels to a doctor. In July of 1992, after reviewing medical test results, Hildre told Samuels she had settled her case against Showa Denko for an inadequate amount.
The court refused Samuels's proffered instruction that Mix had the burden to prove the lawsuit was untimely filed. The court, rather, instructed the jury that Samuels had the burden of proving that the lawsuit was timely filed.
By a vote of nine to three, the jury specially found Samuels had failed to commence her suit within one year from the date she discovered, or through the use of reasonable diligence should have discovered, the facts constituting Mix's wrongful act or omission. In accordance with that special verdict, the court entered judgment for Mix.
Samuels appealed. The Court of Appeal reversed. We granted Mix's petition for review.
Discussion
Pursuant to section 340.6(a), an attorney malpractice action "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 of the wrongful act or omission, whichever occurs first." "[U]nder the provisions of section 340.6, discovery of the negligent act or omission initiates the [one-year] statutory period . . . ." ( Adams v. Paul (1995) 11 Cal.4th 583, 589, fn. 2. [ 46 Cal.Rptr.2d 594, 904 P.2d 1205].)
The Court of Appeal concluded the trial court erred in instructing the jury that plaintiff had the burden of proving, by a preponderance of the evidence, all the facts necessary to establish that this action was timely filed, and in rejecting her proffered instructions that defendant bore the burden of proving the suit was untimely. For the following reasons, we agree with the Court of Appeal.
1. Plain Language
On its face, section 340.6(a) states "two distinct and alternative limitation periods: one year after actual or constructive discovery, or four years after occurrence (the date of the wrongful act or omission), whichever occurs first." ( Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 946, 966, italics in original; see Regents of University of California v. Hartford Acc. Indem. Co. (1978) 21 Cal.3d 624, 640-641 fn. 12 [by implication].) As defendant concedes, in section 340.6 the Legislature provided an affirmative defense to a cause of action for attorney malpractice. (See Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 396 [ 87 Cal.Rptr.2d 453, 981 p. 2d 79]; Fuller v. White (1948) 33 Cal.2d 236, 240 [ 201 P.2d 16].)
Section 500 of the Evidence Code provides that "Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting." Defendant is asserting section 340.6(a)'s one-year-from-discovery limitation defense. In plain language, section 340.6(a) makes essential to that defense the fact that any attorney malpractice action against which it is invoked was not "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 . . . ." Absent a compelling reason for doing otherwise, we must construe section 340.6(a) in accordance with its plain language (cf. Belton v. Bowers Ambulance Service (1999) 20 Cal.4th 928, 931-932 86 Cal.Rptr.2d 107, 978 P.2d 591]) [tolling provision in statute of limitations on actions against health care providers]; Rossi v. Brown (1995) 9 Cal.4th 688, 694 [ 38 Cal.Rptr.2d 363, 889 P.2d 557] [state Constitution and local charter]) and the normal allocation of the burden of proof established by the Legislature ( Aydin Corp. v. First State Ins. Co. (1998) 18 Cal.4th 1183, 1193; [77 Cal.Rptr.2d 537, 959 P.2d 1213]; Fukuda v. City of Angels (1999) 20 Cal.4th 805, 820 [ 85 Cal.Rptr.2d 696, 977 P.2d 693]).
Just as plainly as section 340.6(a) makes the plaintiff's actual or constructive discovery of the defendant's wrongdoing an element of its one-year-from-discovery limitations defense, it does not nor does any other law make the plaintiff's actual or constructive discovery of the defendant's wrongdoing an element of a prima facie claim for attorney malpractice. (See Jordache Enterprises, Inc. v. Brobeck, Phleger Harrison (1998) 18 Cal.4th 739, 762 [ 76 Cal.Rptr.2d 749, 958 P.2d 1062]. ( Jordache) [noting " discovery of damage is not a necessary component of actual injury under section 340.6, subdivision (a)(1)" (italics in original)].) In this case, if defendant had never pled the statute of limitations as a defense, that defense would have been forfeited ( Minton v. Cavaney (1961) 56 Cal.2d 576, 581 [ 15 Cal.Rptr. 641, 364 P.2d 473]) and plaintiff would have been entitled to a trial on the merits of her claim, regardless of whether her action was timely under the terms of section 340.6 ( Flowers v. Torrance Memorial Hospital Medical Center (1994) 8 Cal.4th 992, 999 [ 35 Cal.Rptr.2d 685, 884 P.2d 142] [legislatively imposed medical malpractice statute of limitations could not alter the substance of such actions]).
In this case of first impression, defendant obviously cannot cite any existing law burdening plaintiff with negating the facts essential to section 340.6(a)'s one-year-from-discovery limitation defense to attorney malpractice actions. (See generally, California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1154 [ 43 Cal.Rptr.2d 693, 899 P.2d 79] [noting that Evidence Code section 500's general rule allocating the burden of proof "does not supersede other, specific rules established by statute or judicial decision"].) It follows that, until and unless we create a new exception to the general rule, the burden of proving plaintiff's actual or constructive discovery of defendant's wrongdoing in connection with that defense falls statutorily to defendant. (Evid. Code, § 500; see, e.g., Buss v. Superior Court (1997) 16 Cal.4th 35, 53 [ 65 Cal.Rptr.2d 366, 939 P.2d 766] [declining to create new exception to Evidence Code section 500 for insurer seeking reimbursement of defense costs].)
Thus, in accordance with section 340.6(a)'s plain language, defendant, if he is to avail himself of the statute's one-year-from-discovery limitation defense, has the burden of proving, under the "traditional allocation of the burden of proof" ( Fukuda v. City of Angels, supra, 20 Cal.4th at p. 820, citing Evid. Code, § 500), that plaintiff discovered or should have discovered the facts alleged to constitute defendant's wrongdoing more than one year prior to filing this action. Defendant's remaining arguments may be considered as proffered grounds for our declaring a departure from Evidence Code section 500's general rule.
2. Common Law Discovery Rule
Defendant first suggests that, in enacting section 340.6, the Legislature intended that burdens of proof thereunder be allocated just as they have been allocated under the common law discovery rule, a rule of delayed accrual that lies for the benefit of some plaintiffs with professional malpractice claims. (See Norgart v. Upjohn Co., supra, 21 Cal.4th at pp. 397-398 [generally describing the rule].) For the following reasons, we are not persuaded.
The common law discovery rule, where applicable, indefinitely delays accrual of a cause of action until the plaintiff discovers or reasonably has cause to discover the facts constituting it. As we have explained, the discovery rule "may be expressed by the Legislature or implied by the courts" and is the "`most important'" exception to the general rule that a cause of action accrues when the allegedly wrongful result occurs. ( Norgart v. Upjohn Co., supra, 21 Cal.4th at p. 397, citing Neel v. Magana, Olney, Levy, Cathcart Gelfand (1971) 6 Cal.3d 176, 179 [ 98 Cal.Rptr. 837, 491 P.2d 421] ( Neel); 3 Witkin, Cal. Procedure (4th ed. 1996) Actions, § 463, p. 583.)
"In cases of professional malpractice . . . postponement of the period of limitations until discovery finds justification in the special nature of the relationship between the professional . . . and [the] client." ( Neel, supra, 6 Cal.3d at pp. 187-188.) Thus, in certain recognized contexts, a client's reasonably delayed discovery of facts constituting actionable professional misbehavior may delay accrual of a cause of action based thereon. ( United States Liab. Ins. Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 596 [ 83 Cal.Rptr. 418, 463 P.2d 770] [listing types of actions in which "courts have recognized a postponement of the accrual until the beneficiary has knowledge or notice of the act constituting a breach of fidelity"]; see, e.g., April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 832 [ 195 Cal.Rptr. 421] ["discovery rule may be applied to breaches which can be, and are, committed in secret and, moreover, where the harm flowing from those breaches will not be reasonably discoverable by plaintiffs until a future time"]; 3 Witkin, Cal. Procedure, supra, Actions, § 594, pp. 763-764, and authorities listed there [delayed accrual; accountant malpractice cases]; 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 884, pp. 343-344 [delayed accrual; other actions].)
According to defendant, in applying the common law discovery rule, California courts generally have burdened plaintiffs with justifying any undue delay in filing their complaints. (See generally, April Enterprises, Inc. v. KTTV, supra, 147 Cal.App.3d at pp. 829, 833.) Defendant further asserts that the Legislature, when enacting the one-year-from-discovery provision of section 340.6(a) in 1977 (Stats. 1977, ch. 863, § 1, p. 2609), intended to codify for attorney malpractice cases a version of the common law discovery rule of delayed accrual, one that incorporates the prevailing judicial allocation of burdens of proof thereunder. In advancing this legislative intent argument, however, defendant refers neither to the text of section 340.6 nor to any legislative history materials.
Defendant does not dispute he has the burden of proof on section 340.6(a)'s basic four-years-from-occurrence limitation on attorney malpractice actions. As previously explained, a defendant must prove the facts necessary to enjoy the benefit of a statute of limitations (Evid. Code, § 500; see, e.g., Kaiser Foundation Hospitals v. Workers' Comp. Appeals Bd. (1985) 39 Cal.3d 57, 67, fn. 8 [ 216 Cal.Rptr. 115, 702 P.2d 197]; Colonial Ins. Co. v. Ind. Acc. Com. (1945) 27 Cal.2d 437, 440 [ 164 P.2d 490]) and, indisputably, section 340.6(a)'s four-year provision is, as section 340.6(a) is generally, a statute of limitations.
For the same reason, defendant has the burden of proof on section 340.6(a)'s alternate one-year-from-discovery limitation on attorney malpractice actions. Simply stated, this one-year alternate provision also is a statute of limitations and, therefore, a defendant must prove the facts necessary to enjoy its benefit. That the alternate limitations provision happens to use verbal cognates of the noun "discovery" cannot be deemed to effect an incorporation of the "discovery rule," complete and in its entirety. Unlike the discovery rule, which is "treated as an exception" to the statute of limitations ( Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 437 [ 159 P.2d 958]), section 340.6(a)'s alternate limitations provision is indeed a statute of limitations. And unlike the discovery rule, which runs in favor of the plaintiff by enlarging his or her time without a set limit, the alternate limitations provision of section 340.6(a) runs in favor of the defendant by cutting off the plaintiff's time definitively. (See Flowers v. Torrance Memorial Hospital Medical Center, supra, 8 Cal. 4th at p. 999.)
The alternate limitations provision, moreover, is potentially available only to the defendant, and only to reduce the limitations period of four years down to as little as one. Accordingly, whether or not the alternate limitations provision is actually available in any given case is for the defendant to prove. For, if the defendant has the burden of proof on the basic limitations provision, which can only prescribe a longer period, a fortiori he has the burden of proof on the alternate limitations provision, which can only prescribe a shorter one.
In seeking to analogize section 340.6(a) to the common law discovery rule, defendant relies heavily on a remark we made in Laird v. Blacker (1992) 2 Cal.4th 606 [ 7 Cal.Rptr.2d 550, 828 P.2d 69] ( Laird). In Laird, we held that section 340.6(a)'s one-year-from-discovery limitation period is not tolled during the time the malpractice plaintiff appeals an underlying action, but, rather, commences when he or she suffers an adverse judgment or dismissal in the underlying action. ( Laird, supra, at p. 609.) In the course of reaching that conclusion, we remarked that "when the Legislature adopted section 340.6 in 1977, it implicitly rejected the term `irremediable damage' and codified the discovery rule of Neel . . . and Budd v. Nixen (1971) 6 Cal.3d 195, 198 . . . . These cases hold that a cause of action for legal malpractice accrues when the client discovers or should discover the facts essential to the malpractice claim, and suffers appreciable and actual harm from the malpractice. Discovery of any appreciable and actual harm from the attorney's negligent conduct establishes a cause of action and begins the running of the limitations period." ( Laird, supra, at p. 611, citing Budd v. Nixen (1971) 6 Cal.3d 195, 201 [ 98 Cal.Rptr. 849, 491 P.2d 433] ( Budd).)
Defendant makes too much of our remark in Laird. In context, its import is simply that, under the statute and mentioned cases, "a cause of action for legal malpractice accrues when the client discovers or should discover the facts essential to the malpractice claim, and suffers appreciable and actual harm from the malpractice" ( Laird, supra, 2 Cal.4th at p. 611; see also International Engine Parts, Inc. v. Feddersen Co. (1995) 9 Cal.4th 606, 615 [ 38 Cal.Rptr.2d 150, 888 P.2d 1279]), an observation not bearing on the question presented here. Certainly the remark is not authority for the sweeping notion that all common law appendages to the discovery rule are automatically pertinent under section 340.6 To the contrary, we quite recently clarified that "[s]ection 340.6 is not simply a mechanical transcription of the holdings in Neel . . . and Budd; the Legislature plainly intended to address additional concerns when it established a separate statute of limitations for legal malpractice actions." ( Jordache, supra, 18 Cal.4th at p. 748.)
In Jordache, as in Laird, we addressed the meaning of the phrase "actual injury" found in section 340.6(a)'s tolling provisions. (§ 340.6, subd. (a)(1).) We held the statute "will not toll the limitations period once the client can plead damages that could establish a cause of action for legal malpractice." ( Jordache, supra, 18 Cal.4th at p. 743.) In so holding, we again remarked (as we had in Laird) that "the Legislature intended to codify" Budd in section 340.6 ( Jordache, supra, at p. 743, citing Laird, supra, 2 Cal.4th at p. 611). We clarified, however, that we meant thereby only "the actual injury tolling provision derived from the holding in Budd" ( Jordache, supra, at p. 748, fn. omitted) and again acknowledged that the Legislature had "intended to address additional concerns [beyond those addressed in Neel and Budd] when it established a separate statute of limitations for legal malpractice actions" ( ibid.). In fact, we noted, "[i]n section 340.6, the Legislature established a detailed, explicit, and exclusive scheme for commencing and tolling the legal malpractice limitations periods." ( Jordache, supra, at p. 764.)
Contrary to the expansive reading defendant would give the Laird dictum, we believe that, in enacting section 340.6, the Legislature clearly intended more than merely to codify the common law discovery rule, because section 340.6(a), even absent discovery, absolutely cuts off actions after a specified period ("four years from the date of the wrongful act or omission"); the common law discovery rule, as discussed, includes no such cutoff. (Assem. Com. on Judiciary, analysis of Assem. Bill No. 298 (1977-1978 Reg. Sess.) May 12, 1977, at p. 3 [noting the then-existing attorney malpractice statute of limitations "is virtually open-ended as the statute does not commence to run until discovery" and that "Assembly Bill 298 prescribes a four-year outer-limit"].)
We also observe that, in enacting section 340.6, the Legislature apparently intended to benefit potential attorney malpractice defendants, insofar as section 340.6 ended Neel's regime of endless potential exposure under the common law discovery rule. Members of the Assembly Judiciary Committee considered and reviewed the article by Ronald E. Mallen, Panacea or Pandora's Box? A Statute of Limitations for Lawyers (1977) 52 State Bar J. 22 (Mallen, Panacea), wherein Mr. Mallen proposed a legal malpractice statute of limitations. (Assem. Com. on Judiciary, analysis of Assem. Bill No. 298, supra, May 12, 1977, at p. 3; Southland Mechanical Constructors Corp. v. Nixen (1981) 119 Cal.App.3d 417, 428 [ 173 Cal.Rptr. 917], superseded by statute on another point [noting the bill digest's reference to Mallen, Panacea].) Section 340.6 constitutes relief for potential attorney malpractice defendants because it provides two alternate bases either four years from occurrence or one year from discovery for cutting off potential liability for attorney malpractice that otherwise, under the common law discovery rule, might have lingered indefinitely. (Mallen, Panacea, supra, 52 State Bar J. at pp. 23-24 [proposing two-year/four-year attorney malpractice limitation statute similar to section 340.6 as "legislative relief . . . but this time for the attorney" from the "literally interminate liability of the discovery rule"]; cf. Newell v. Richards (Md. 1991) 594 A.2d 1152, 1156-1158 [holding Maryland legislature must have intended to burden a defendant invoking alternative date-of-injury/date-of-discovery medical malpractice limitations statute, similar to section 340.6(a), with proving when injury was discovered, partly on ground the "`purpose of the statute, readily evident from its terms, was to contain the "long-tail" effect of the [common law] discovery rule'"].)
While we had no occasion in Jordache, supra, 18 Cal.4th 739, to detail the "additional concerns" underlying the Legislature's enactment of section 340.6's "exclusive scheme," we did, in the course of deciding the tolling question presented in that case, note that "section 340.6 reflects the balance the Legislature struck between a plaintiff's interest in pursuing a meritorious claim and the public policy interests in prompt assertion of known claims." ( Id. at p. 756.) In that same vein, we quite recently observed that to "establish any particular limitations period under any particular statute of limitations entails the striking of a balance" between the public policy favoring extinction of stale claims and that favoring resolution of disputes on their merits. ( Norgart v. Upjohn Co., supra, 21 Cal.4th at p. 396.) Because it involves such policymaking, to establish a statute of limitation "belongs to the Legislature alone [citation], subject only to constitutional constraints [citation]." ( Id. at pp. 396-397, citing Weinberger v. Weidman (1901) 134 Cal. 599, 602; Regents of University of California v. Superior Court (1999) 20 Cal.4th 509, 534 [ 85 Cal.Rptr.2d 257, 976 P.2d 808].)
While our judicially engrafting section 340.6(a) with the common law discovery rule's exception to the normal burden of proof might not directly invade the Legislature's exclusive province to specify limitation periods, it well might indirectly do so. This is because such a judicially recognized exception risks disturbing the policy balance among the various societal interests that the Legislature achieved when enacting the statute, including the interests in hearing meritorious malpractice suits, extinguishing stale claims, and avoiding consumer costs attendant on indefinite malpractice exposure. (See generally, Mallen, Panacea, supra, 52 State Bar J. 22.)
Thus, defendant fails to persuade us that our Legislature, when enacting section 340.6(a), intended to incorporate therein every judicially formulated appendage to the common law discovery rule. Neither the rule itself, Neel's gloss on it (that it "finds justification in the special nature of the relationship between the professional . . . and [the] client") ( Neel, supra, 6 Cal. 3d at p. 188), nor Laird's remark that it was "codified" in section 340.6(a) ( Laird, supra, 2 Cal.4th at p. 611), provides a sufficient ground for relieving defendant of his statutory burden to prove "each fact the existence or nonexistence of which is essential" (Evid. Code, § 500) to his one-year-from-discovery limitations defense.
As the Court of Appeal explained, defendant's reliance on Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125 [ 281 Cal.Rptr. 827] and April Enterprises, Inc. v. KTTV, supra, 147 Cal.App.3d 805 is misplaced. Those cases involved attempts by plaintiffs to establish under the common law discovery rule that their causes of action had not accrued because their discovery of crucial facts was reasonably delayed. Those cases did not address the question presented in this case, viz., whether defendant has proven the statutory elements of his section 340.6(a) limitations defense.
3. Analogy to Fraud Claims
Defendant argues that, as plaintiffs in some fraud actions are required, in order to avoid the three-year limitation on commencement of such actions found in Code of Civil Procedure section 338, subdivision (d) (section 338(d)), to plead and prove their reasonably delayed discovery of the conduct they allege to constitute fraud (3 Witkin, Cal. Procedure, supra, Actions, § 602, pp. 773-775; 5 Witkin, Cal. Procedure, supra, Pleading, § 883, pp. 342-343, and authorities cited there), and as section 340.6(a) is worded somewhat similarly to section 338(d), plaintiff here should face a similar requirement.
Section 338(d) provides that a plaintiff must commence within three years any "action for relief on the ground of fraud or mistake. The cause of action in that case is not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake." Defendant correctly notes that in Hobart v. Hobart Estate Co., supra, 26 Cal.2d 412, we stated: "The provision tolling operation of [section 338(d)] until discovery of the fraud has long been treated as an exception and, accordingly, this court has held that if an action is brought more than three years after commission of the fraud, plaintiff has the burden of pleading and proving that he did not make the discovery until within three years prior to the filing of his complaint." ( Id. at p. 437, citing Sublette v. Tinney (1858) 9 Cal. 423; Lady Washington C. Co. v. Wood (1896) 113 Cal. 482; [45 P. 809]; Consolidated R. P. Co. v. Scarborough (1932) 216 Cal. 698 [ 16 P.2d 268]; Knapp v. Knapp (1940) 15 Cal.2d 237, 242 [ 100 P.2d 759].)
Our holding in Hobart was qualified in this manner: "`It is only where the party defrauded should plainly have discovered the fraud except for his own inexcusable inattention that he will be charged with a discovery in advance of actual knowledge on his part.' It follows that plaintiff is not barred because the means of discovery were available at an earlier date provided he has shown that he was not put on inquiry by any circumstances known to him or his agents at any time prior to the commencement of the three-year period . . . ." ( Hobart v. Hobart Estate Co., supra, 26 Cal.2d at p. 439, italics omitted, quoting Victor Oil Co. v. Drum (1920) 184 Cal. 226, 241, [ 193 P. 243].)
In suggesting that we construe section 340.6(a) similarly to section 338(d), defendant emphasizes the presence in each of a reference to when the plaintiff discovers the facts underlying his or her cause of action. While defendant errs in calling the two references "almost identical," each statute indeed contains a discovery provision. (Cf. § 340.6(a) ["action . . . 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"] with § 338(d) ["cause of action . . . is not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake"].)
Defendant seeks to buttress his argument based on this statutory phrasing by analogizing fraud and malpractice claims, generally. Defendant points to our suggestion in Neel that "`[c]ases in which the defendant stands in a fiduciary relationship to the plaintiff are frequently treated as if they involved fraudulent concealment of the cause of action by the defendant. The theory is that although the defendant makes no active misrepresentation, this element "is supplied by an affirmative obligation to make full disclosure, and the non-disclosure itself is a `fraud.'"'" ( Neel, supra, 6 Cal.3d at p. 189, quoting Amen v. Merced County Title Co. (1962) 58 Cal.2d 528, 534 [ 25 Cal.Rptr. 65, 375 P.2d 33].)
For several reasons, we agree with the Court of Appeal that, while there may be some linguistic similarity between parts of section 340.6(a) and section 338(d), the case law involving the statute of limitations for fraud does not help defendant here.
First, the relatively recent vintage of section 340.6(a), which, as noted, was added to the code in 1977 (Stats. 1977, ch. 863, § 1, p. 2609), as compared to section 338(d), which originally was enacted in 1872 (Historical Note, 13A West's Ann. Code Civ. Proc. (1982 ed.) foll. § 338, p. 295), affords us a different perspective in construing the former than courts have enjoyed in construing the latter. Thus, legislative enactment of the fraud limitations statute, including its discovery provision, predated judicial development of the common law discovery rule (see Neel, supra, 6 Cal.3d at p. 192, fn. 32; Hobart v. Hobart Estate Co., supra, 26 Cal.2d at p. 437; April Enterprises, Inc. v. KTTV, supra, 147 Cal.App.3d at pp. 828-829) and necessarily cannot have embodied a rejection of that jurisprudence. More recently, however, "in section 340.6 the Legislature has chosen to abrogate the common law rule and to enact a special rule for actions against attorneys for wrongful acts or omissions." ( Radovich v. Locke-Paddon, supra, 35 Cal.App.4th at p. 970; see also Jordache, supra, 18 Cal.4th at p. 748.) At least one of the Legislature's purposes in enacting section 340.6 evidently was to benefit potential attorney malpractice defendants, providing them with a means of cutting off the endless exposure to suit that existed under the common law discovery rule. ( Southland Mechanical Constructors Corp. v. Nixen, supra, 119 Cal.App.3d at p. 428; Mallen, Panacea, supra, 52 State Bar J. at pp. 23-24.) To the extent it serves that specific remedial purpose, of course, "analyses of other statutes are not pertinent to section 340.6" ( Radovich v. Locke-Paddon, supra, at p. 970.)
Second, the respective provisions are structured differently. Section 338(d)'s discovery provision, like the common law discovery rule, affords fraud plaintiffs a rule of indefinitely delayed accrual ("cause of action . . . is not to be deemed to have accrued"), thus saving certain otherwise barred claims when plaintiffs can prove diligence. Section 340.6(a)'s discovery provision, by contrast, affords attorney malpractice defendants a defensive limitation on commencement of lawsuits ("action . . . shall be commenced within"), thus barring suit on otherwise viable claims when malpractice defendants as we conclude can prove a plaintiff's lack of diligence. ( Neel, supra, 6 Cal.3d at p. 191 [distinguishing between "classifying . . . civil actions as to their period of limitation" from "the different issue as to when the cause of action accrues" (italics in original)].) While the difference in a statute of limitations between a delayed accrual provision and one limiting commencement of actions may be primarily linguistic, without significant practical import in a given case, the Legislature's choice of terminology in a statute may, nevertheless, illustrate the legislative intent lying behind its enactment. Thus, to burden plaintiffs with proving that their causes of action have accrued (as section 338(d) has been construed to require of fraud plaintiffs) is one thing; to burden plaintiffs (as defendant suggests we should in construing section 340.6(a)) with disproving dilatory commencement, an element of their opponents' limitations defense under that statute, would be quite another.
Without analysis, we once included section 340.6(a) in a string citation to illustrate, in dictum, "rules postponing the accrual of a cause of action until a specified event occurs." ( Cuadra v. Millan (1998) 17 Cal.4th 855, 865, fn. 11, [ 72 Cal.Rptr.2d 687, 952 P.2d 704] citing, inter alia, §§ 338(d) and 340.6(a), italics in original; see also Burgon v. Kaiser Foundation Hospitals (1979) 93 Cal.App.3d 813, 818-824 [ 155 Cal.Rptr. 763] [describing Code Civ. Proc., § 340.5 to similar effect].) Our citation of section 340.6(a) in Cuadra v. Millan obviously is not authority for erasing all distinctions between accrual and discovery of a cause of action a distinction not considered in that case (see People v. Gilbert (1969) 1 Cal.3d 475, 482, fn. 7 [ 82 Cal.Rptr. 724, 462 P.2d 580] ["cases are not authority for propositions not considered"]) whenever the Legislature invokes the latter in specifying a limitation period. In any event, to the extent Cuadra v. Millan, supra, 17 Cal.4th 855 and Burgon v. Kaiser Foundation Hospitals, supra, 93 Cal.App.3d 813 may contain language inconsistent with this opinion, they are disapproved.
Third, the two statutes function differently in their respective areas of the law. As mentioned, section 338(d)'s discovery provision has "long been treated as an exception" to the limitation defense otherwise provided by section 338(d). ( Hobart v. Hobart Estate Co., supra, 26 Cal.2d at p. 437.) Section 340.6(a)'s discovery provision is, by contrast, not an exception, but itself a discrete, independent limitation defense. ( Flowers v. Torrance Memorial Hospital Medical Center, supra, 8 Cal.4th at p. 999; Regents of University of California v. Hartford Acc. Indem. Co., supra, 21 Cal.3d at pp. 640-641; Radovich v. Locke-Paddon, supra, 35 Cal.App.4th at p. 966; see generally, 3 Witkin, Cal. Procedure, supra, Actions, § 581, p. 737.)
Given these fundamental differences in provenance, structure and function between the discovery provisions of section 338(d) and section 340.6(a), we cannot conclude that the latter's plain language is somehow trumped by a judicial gloss relating to the former, so as to determine the burden of proof question presented in this case. Rather, we must construe section 340.6 on its own terms.
4. Fairness
Even if the Legislature did not specifically intend section 340.6 to incorporate the common law discovery rule's entire related jurisprudence, defendant suggests, we should declare as a matter of fairness and judicial policy that proof burdens under the statute are the same as under the common law rule. As defendant points out, in other contexts we have adverted to "fundamental fairness" as the "lodestar for our analysis" in determining the incidence of the burden of proof. (See, e.g., Adams v. Murakami (1991) 54 Cal.3d 105, 119-120 [ 284 Cal.Rptr. 318, 813 P.2d 1348] [quoting the California Law Revision Commission's remark that such a determination "is merely a question of policy and fairness based on experience in the different situations" (italics omitted)].)
In advancing this policy argument, defendant reiterates that, in order to invoke the common law discovery rule, a plaintiff bears the burden of proving that reasonable diligence to ascertain the facts underlying a claim did not bear fruit until a time within the applicable limitation period. By analogy, defendant argues, the same should apply here. Because plaintiff Samuels seeks to bring herself within the one-year-from-discovery limitations period of section 340.6(a) by asserting she did not know, and could not with reasonable diligence have known, the facts allegedly constituting Mix's legal malpractice more than one year before she instituted this action, Samuels fairly is burdened with proving the truth of her assertion. For support, defendant cites a prominent treatise in the field. (See 2 Mallen Smith, Legal Malpractice (4th ed. 1996) § 21.15, pp. 846-847 ["The onus of the discovery rule is the threat of open-ended liability of attorneys. The correlative burden on the client is the need to act with diligence in pursuing existing remedies. A consequence of that rule is that, if suit is filed after the apparent expiration [of] the statute of limitations, the plaintiff will be required to both plead and prove facts explaining the lack of discovery." (Fn. omitted.)].)
To begin with, the cited treatise extract and its argument, which concern the common law discovery rule, do not particularly bear on our task, which is the construction of section 340.6(a). As we need hardly repeat, unlike the common law rule discussed in the treatise, section 340.6(a) does not involve "the threat of open-ended liability of attorneys." Rather, the statute supplies potential attorney malpractice defendants with two distinct limitations defenses barring, upon requisite proof, commencement of actions filed either four years after the alleged wrong or one year after discovery of the alleged wrong, whichever occurs first. (§ 340.6(a); cf. Newell v. Richards, supra, 594 A.2d at pp. 1155-1158 [construing analogous statute of limitations].)
In any event, contrary to defendant's characterization, plaintiff does not seek to "excuse" herself from compliance with an otherwise expired statute of limitations. The discovery provision of section 340.6(a) describes alternative time limitations on commencement of actions for attorney malpractice, not exceptions to other limitations or rules. (See Flowers v. Torrance Memorial Hospital Medical Center, supra, 8 Cal.4th at p. 999; Regents of University of California v. Hartford Acc. Indem. Co., supra, 21 Cal.3d at pp. 640-641; Radovich v. Locke-Paddon, supra, 35 Cal.App.4th at p. 966.)
Perhaps more fundamentally, the observation, that because the common law discovery rule generally benefits plaintiffs it has been thought fair to burden them with proving its elements (see, e.g., Mangini v. Aerojet-General Corp., supra, 230 Cal.App.3d at pp. 1149-1150 [negligence], citing G. D. Searle Co. v. Superior Court (1975) 49 Cal.App.3d 22, 26 [products liability]; April Enterprises, Inc. v. KTTV, supra, 147 Cal.App.3d at p. 832 [breach of contract]), supports plaintiff's position in this case, not defendant's. Plainly, in providing for definite and relatively early termination of attorney malpractice exposure, section 340.6 generally benefits defendants. Section 340.6 sets up two alternative limitations periods, and defendants are just as fairly burdened with proving entitlement to the more beneficial one-year period as they are with proving entitlement to the less beneficial four-year period. When the applicability of the one-year period is at issue, the defendant is the one who seeks to shorten the limitations period that would otherwise apply. "The general rule has long been that `He who takes the benefit must bear the burden.'" ( Adams v. Murakami, supra, 54 Cal.3d at p. 120, quoting Civ. Code, § 3521)
Moreover, whereas the common law discovery rule and the fraud tolling provision of section 338(d) each place a very substantial burden on defendants, such as may seem to warrant burdening plaintiffs with justifying any delay, section 340.6(a), with its four-year-from-occurrence limitation, does not. Accordingly, insofar as general considerations of fairness may be thought to bear, they suggest the defendant appropriately is burdened with proving all the elements of section 340.6(a)'s one-year-from-discovery defense.
5. Access to Evidence
Finally, defendant points out that the Evidence Code section 500 rule allocating the burden of proof applies "[e]xcept as otherwise provided by law" and that the exception, as we have stated, "`is included in recognition of the fact that the burden of proof is sometimes allocated in a manner that is at variance with the general rule. In determining whether the normal allocation of the burden of proof should be altered, the courts consider a number of factors: the knowledge of the parties concerning the particular fact, the availability of the evidence to the parties, the most desirable result in terms of public policy in the absence of proof of the particular fact, and the probability of the existence or nonexistence of the fact.'" ( Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 660-661 [ 25 Cal.Rptr.2d 109, 863 P.2d 179], quoting Cal. Law Revision Com. com., 29B West's Ann. Evid. Code (1966 ed.) foll. § 500, p. 431; see also Aydin Corp. v. First State Ins. Co., supra, 18 Cal.4th at p. 1193.)
Defendant contends that facts demonstrating a typical attorney malpractice plaintiff's knowledge of a typical defendant's malpractice are likely to exist peculiarly within the plaintiff's access and control. According to defendant, therefore, we should as a matter of policy declare that the burden of proving such facts, when relevant under section 340.6, belongs to plaintiff. Again, we are not persuaded.
We have not routinely found exceptions to Evidence Code section 500's general rule on the basis of relative access to evidence. (See, e.g., Adams v. Murakami, supra, 54 Cal.3d at pp. 120-121 [declining to burden defendant with proving the state of his own finances when punitive damages are in issue].) As plaintiff points out, nearly all the allegations required of plaintiffs in tort and contract actions relate to defendants' acts or omissions and so might be thought, almost by definition, to describe matters peculiarly within the defendants' knowledge or control. That circumstance, however, has not occasioned a wholesale departure in tort and contract actions from the ordinary allocation of proof burdens.
Moreover, to the extent section 340.6(a)'s one-year-from-discovery limitations period may be triggered by a circumstance having no necessary relation to the plaintiff's actual state of mind namely, that the plaintiff "through the use of reasonable diligence should have discovered" the defendant's wrongful conduct no reason appears for assuming that, in any given case, "knowledge . . . concerning the particular fact" ( Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 660) or facts actually triggering the limitations period will lie within one party's grasp but not the other's.
In light of Evidence Code section 500's mandate and the plain language of section 340.6(a), we need not strain to discern (because we are not free to impose) a universally "desirable result in terms of public policy" ( Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 660) for all section 340.6(a) disputes. As we recently observed, "the affirmative defense based on the statute of limitations should not be characterized by courts as either `favored' or `disfavored,'" as "[t]he two public policies . . . for repose and . . . for disposition on the merits . . . are equally strong, the one being no less important or substantial than the other." ( Norgart v. Upjohn Co., supra, 21 Cal. 4th at p. 396, citing numerous authorities.) In any event, "[t]o establish any particular limitations period under any particular statute of limitations entails the striking of a balance between the two," and thus "[t]o establish any such period under any such statute belongs to the Legislature alone [citation], subject only to constitutional constraints [citation]." ( Id. at pp. 396-397.)
Finally, the record in this case reveals no superior or enhanced access to evidence on plaintiff's part. The main witness on delayed discovery was the attorney, Hildre. While common sense suggests Samuels may at the outset have enjoyed certain practical advantages in contacting Hildre, whom she had consulted in his professional capacity, no reason appears to assume, in assessing "the availability of the evidence to the parties" ( Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 660), that, ultimately, either party enjoyed special or unequal access to Hildre's testimony. We agree with plaintiff that no valid basis exists for shifting to her the burden of proof on the discovery prong of section 340.6(a) on the speculation that she had more peculiar access to relevant evidence.
Asserting that discovery of a lawyer's malpractice will most often arise from the substance of the client's communication with a second attorney, the dissent opines that malpractice plaintiffs who "peculiarly and exclusively" possess facts relevant to the one-year-from-discovery limitation defense will claim attorney-client privilege, thus preventing defendants from sustaining their burden. (Dis. opn., post, at p. 8.) We are not persuaded.
First, we decline to assume that a malpractice plaintiff will misrepresent, under oath, the date on which he discovered the facts underlying his action. Perjury, a felony punishable by up to four years' imprisonment (Pen. Code, § 126), may not be presumed. ( Estate of Brady (1918) 177 Cal. 537, 540 [ 171 P. 303]; Eversdon v. Mayhew (1890) 85 Cal. 1, 9-10.) Moreover, without discounting the temptation litigants may feel to prevaricate, the dissent's paradigmatic "lawyer worth his salt" (dis. opn., post, at p. 9), we submit, may be counted upon as much to discourage perjury as damaging disclosures. (See Nix v. Whiteside (1986) 475 U.S. 157, 174 [ 106 S.Ct. 988, 997-998, 89 L.Ed.2d 123].) Second, the attorney-client privilege does not protect "independent facts related to a communication; that a communication took place, and the time, date and participants. . . ." ( State Farm Fire Casualty Co. v. Superior Court (1997) 54 Cal.App.4th 625, 640 [ 62 Cal.Rptr.2d 834].) A defendant, therefore, freely may adduce the "date on which [a plaintiff] first conferred with [another attorney] in regard to the very matter which is the gravamen of the present action" ( Coy v. Superior Court (1962) 58 Cal.2d 210, 219 [ 23 Cal.Rptr. 393, 373 P.2d 457, 9 A.L.R.3d 678]), in order to suggest a factfinder should discount the plaintiff's protestations of ignorance. Third, a plaintiff who exposes any significant part of a communication in making his own case waives the privilege with respect to the communication's contents bearing on discovery, as well. (Evid. Code, § 912, subd. (a).) Fourth, any communication by the second lawyer with the defendant seeking, on behalf of the client, remedies for the alleged malpractice, would not be privileged and would, itself, constitute persuasive evidence regarding the time of discovery. Fifth, should the second lawyer provide an opinion in the malpractice case, he "may be cross-examined to the same extent as any other witness." ( Id., § 721, subd. (a).)
Any residual proof difficulty facing attorney malpractice defendants under the one-year-from-discovery period of section 340.6(a) is a consequence of the existing legislative policy balance, since, as we have demonstrated, defendants' burden to prove its elements follows from the statute's plain language and Evidence Code section 500
In sum, defendant fails to demonstrate that our judicial interference with the "traditional allocation of the burden of proof" ( Fukuda v. City of Angels, supra, 20 Cal.4th at p. 820) when defendants rely on section 340.6(a) would be either proper or desirable. Rather, in this case, as in the past, we shall "strictly follow the statute that governs the accrual and limitation of claims for attorney malpractice" ( Wiley v. County of San Diego (1998) 19 Cal.4th 532, 546 [ 79 Cal.Rptr.2d 672, 966 P.2d 983] (conc. opn. of Werdegar, J.), citing § 340.6; see Steketee v. Lintz, Williams Rothberg (1985) 38 Cal.3d 46, 56 [ 210 Cal.Rptr. 781, 694 P.2d 1153] [observing that statutes of limitations "`are technical defenses which should be strictly construed to avoid the forfeiture of a plaintiff's rights'"]) and uphold the Court of Appeal's finding of instructional error.
The petition for review presents only the narrow legal question whether the trial court correctly allocated the burden of proof with respect to the one-year-from-discovery provision of section 340.6(a). In their briefing on the merits before this court, the parties have confined themselves to that issue, not disputing that the record contains conflicting evidence on the determinative issue of discovery, or the Court of Appeal's conclusion that the trial court's erroneous instructions must be considered prejudicial, since it is reasonably likely the jury verdict was based on them. Accordingly, we need not consider the question of prejudice here. (Cal. Rules of Court, rule 28(e)(2); People v. Weiss (1999) 20 Cal.4th 1073, 1076-1077 [ 86 Cal.Rptr.2d 337, 978 P.2d 1257].)
We nevertheless find no grounds for disagreeing with the Court of Appeal's conclusion respecting prejudice, which was based on a detailed examination of the conflicting trial testimony about Samuel's discovery of the underlying facts. Among other things, the Court of Appeal noted that the parties disputed whether, after her October 1991 meeting with attorney Hildre, plaintiff Samuels believed that defendant Mix had misrepresented Showa Denko's true financial condition. The court also noted that, when cross-examined about apparent discrepancies between her trial and deposition testimony bearing on when she first suspected wrongdoing by Mix, Samuels testified to suffering from imprecise memory and argued that her deposition testimony referred not to knowledge of defendant's wrongdoing in negotiating settlement but, rather, simply to her general disillusionment with defendant (based on his assertedly unauthorized use of a courier and discussing with others the amount of the settlement after stating it was confidential).
The Court of Appeal also appreciated that "`few instructions are of greater importance than that which informs the jury which party bears the burden of proof on the issues in dispute.'" ( Bernal v. Richard Wolf Medical Instruments Corp. (1990) 221 Cal.App.3d 1326, 1335 [ 272 Cal.Rptr. 41].) Nothing in the record indicates the erroneous instructions were mitigated or remedied by other instructions. (See Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 570-571 [ 34 Cal.Rptr.2d 607, 882 P.2d 298].)
Disposition
For the foregoing reasons, the judgment of the Court of Appeal is affirmed.
We concur:
GEORGE, C.J. MOSK, J. KENNARD, J. CHIN, J. BROWN, J.
DISSENTING OPINION BY BAXTER, J.
I respectfully dissent.
Code of Civil Procedure section 340.6, subdivision (a) (section 340.6(a)) provides that unless otherwise "tolled," the statute of limitations for legal malpractice expires one year after the client's actual or constructive discovery of the facts of the claim, or four years after the attorney's wrongful act or omission, whichever occurs first. The majority conclude that for purposes of the one-year period, the defendant attorney bears the burden of proving when the plaintiff discovered, or should have discovered, the cause of action.
All subsequent statutory references are to the Code of Civil Procedure unless otherwise indicated.
As the majority concede, however, this holding contravenes a long line of California decisions, including cases interpeting the identically structured limitations statute for medical malpractice (§ 340.5). These authorities consistently hold that where a limitations period runs from the time of the plaintiff's discovery, he bears the burden of showing his suit was filed within the requisite time after discovery occurred. (E.g., Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 437 [ 159 P.2d 958] ( Hobart) [fraud limitations statute]; April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 833 [ 195 Cal.Rptr. 421] [breach of fiduciary duty]; Christ v. Lipsitz (1979) 99 Cal.App.3d 894, 898 [ 160 Cal.Rptr. 498] [current medical malpractice limitations statute]; Burgon v. Kaiser Foundation Hospital (1979) 93 Cal.App.3d 813, 824 [ 155 Cal.Rptr. 763] [same]; Dujardin v. Ventura County General Hosp. (1977) 69 Cal.App.3d 350, 355-356 [ 138 Cal.Rptr. 20] [same]; G. D. Searle Co. v. Superior Court (1975) 49 Cal.App.3d 22, 25-26 [ 122 Cal.Rptr. 218] [product liability; latent injury]; Devault v. Logan (1963) 223 Cal.App.2d 802, 809 [ 36 Cal.Rptr. 145] [predecessor medical malpractice limitations statute].)
Courts have given various rationales for the prevailing rule, but it is amply supported by the principle that one should usually not have to defend himself by proving facts peculiarly within his opponent's knowledge. (See Cal. Law Revision Com. com., reprinted at 29B pt. 1 West's Ann. Evid. Code (1995 ed.) foll. § 500, p. 554.) This principle applies with particular force where a claim of legal malpractice is asserted. In such a case, the time of the plaintiff's actual or constructive discovery may, and often will, depend on what information he obtained, and when he obtained it, from confidential and absolutely privileged consultations with another attorney. A party need not waive the privilege in order to help his opponent prove facts on which the adversary has the burden, and, for obvious reasons, there is little incentive to cooperate voluntarily. Indeed, as a result of the majority's holding, it seems likely that in any retrial of this case, plaintiff Samuels and Attorney Hildre will invoke the attorney-client privilege to avoid testifying about the timing and content of their communications. Defendant Mix may therefore be left without any opportunity to show Samuels's claim is untimely.
I cannot join the vote to place an attorney sued for malpractice in such a legal and practical bind.
The issue here is whether the Legislature, when it adopted the legal malpractice limitations statute, intended an anomalous exception to the long-established rule that the plaintiff must demonstrate when his discovery of a cause of action triggered the running of the statute of limitations. The majority say such an exception arises on the face of the statute, appears consistent with legislative intent, and comports with public policy. I am not convinced.
Invoking the plain language of section 340.6(a), the majority distinguish the structure of this section from other statutory and common law rules of delayed discovery. The majority reason that in technical terms, section 340.6(a) defines the basic limitations period in terms of discovery, thus requiring the defendant to prove, as an element of his affirmative limitations defense, that the action is barred under the statutory terms. (Maj. opn., ante, at p. 5, citing Evid. Code, § 500) By contrast, the majority argue, because belated discovery in other cases postpones the time at which the cause of action would "accrue" (see, e.g., § 338, subd. (d) [fraud or mistake]), the plaintiff may properly have the burden of proving this "exception" to normal commencement and expiration of the limitations period. (Maj. opn., ante, at p. 14, quoting Hobart, supra, 26 Cal.2d 412, 437.)
The majority's semantic analysis is overliteral and exaggerated. Section 340.6(a), like a "delayed accrual" rule, provides that even after malpractice and injury have occurred, the one-year limitations period will not begin until the plaintiff discovers his claim. Just as the defendant need not prove there was no delayed "accrual, " so he should not have to prove there was no delayed commencement.
The only practical distinction between section 340.6(a) and traditional delayed-discovery rules is that, with specified exceptions, section 340.6(a) imposes an absolute cut-off date of four years after malpractice and injury, regardless of discovery. But that particular feature of the statute has no logical relevance to the issue before us. Though the majority suggest otherwise, I see no reason why the statute's provision of an alternate four-year limitations period should bear upon how to allocate the burden of proof of delayed discovery when the one-year period is at issue.
The majority assert there is no evidence of legislative purpose to adopt, for legal malpractice, the traditional allocation of proof of delayed discovery. But the majority have it backwards. The history of section 340.6(a), its language, and its subsequent construction by this court demonstrate that the Legislature intended no radical departure from traditional delayed-discovery rules. Indeed, the Legislature's manifest aim was to adopt the common law delayed-discovery rule we had already announced for legal malpractice, subject only to exceptions we had invited the Legislature to impose.
The relevant background is set forth in the companion cases of Neel v. Magana, Olney, Levy, Cathcart Gelfand (1971) 6 Cal.3d 176 [ 6 Cal.Rptr. 837, 491 P.2d 421] ( Neel) and Budd v. Nixen (1971) 6 Cal.3d 195 [ 98 Cal.Rptr. 849, 491 P.2d 433] ( Budd). At the time of those decisions, there was no distinct limitations period for attorney malpractice. Courts applied the two-year statute for "action[s] upon a contract, obligation or liability not founded upon an instrument of writing" (§ 339, subd. 1). ( Neel, supra, at pp. 181-182.) The cause of action was deemed to accrue, and the limitations period thus began to run, when malpractice and resulting injury had occurred. ( Neel, supra, at p. 182-183; Budd, supra, at pp. 200-201.) In contrast with most other instances of professional negligence, however, courts declined to find that "accrual of the limitations period" was further delayed while the client lacked actual or constructive knowledge of the attorney's negligence. ( Neel, supra, at pp. 183-187.)
We found no justification for denying legal malpractice plaintiffs the benefit of the delayed-discovery rule. Thus, we held that a cause of action for legal malpractice did not accrue, and the limitations period thus did not begin to run (see § 312), until the client both discovered or should have discovered the malpractice, and suffered "actual and appreciable harm" thereby. ( Neel, supra, 6 Cal.3d 176, 186-190; Budd, supra, 6 Cal.3d 195, 201.)
In Neel, we recognized that a rule of delayed accrual pending discovery could operate unfairly against legal malpractice defendants by extending the limitations period indefinitely. Neel thus expressly invited the Legislature to consider a solution already adopted for medical malpractice, i.e., an outside time limit that would apply regardless of the client's failure to discover the professional negligence. ( Neel, supra, 6 Cal.3d 176, 192-193, fn. 32.)
The Legislature responded by enacting section 340.6 in 1977. Using a formula previously employed for medical malpractice (see § 340.5), section 340.6(a) established alternative limitations periods, one year from discovery, or four years from wrongdoing, whichever occurred first. Both of these limitations periods would be "tolled" while (1) the plaintiff had sustained no "actual injury" ( id., subd. (a)(1)); (2) the negligent attorney continued to represent the plaintiff in the same legal matter ( id., subd. (a)(2)); or (3) the plaintiff was under a legal or physical disability to sue ( id., subd. (a)(4)). The four-year period, but not the one-year period, would further be "tolled" by the attorney's willful concealment of the wrongful act or omission ( id., subd. (a)(3); cf. Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 101 [ 132 Cal.Rptr. 657, 553 P.2d 1129] [medical malpractice]).
Thus, section 340.6(a) specifically retained the common law rules of Neel and Budd that commencement of the limitations period for legal malpractice occurs when a client has discovered, and has suffered injury from, an attorney's professional malfeasance. In substance, section 340.6(a) departed from Neel and Budd in just two ways: It shortened the limitations period after discovery from two years to one; and, as Neel had suggested, it eliminated the unfair "long-tail" effect of the common law delayed-discovery rule by providing that failure to discover, unless caused by willful concealment, would not extend the statute of limitations past four years from the lawyer's negligent act.
The majority point to no evidence, and I know of none, suggesting the Legislature had any broader goals in mind. We ourselves have recognized the limited aims, and the limited effects, of section 340.6(a). On several occasions, we have acknowledged that the 1977 statute essentially codified, with specified refinements, the "delayed accrual" rules of Neel and Budd. ( Jordache Enterprises, Inc. v. Brobeck, Phleger Harrison (1998) 18 Cal.4th 739, 749 [ 76 Cal.Rptr.2d 749, 958 P.2d 1062] [discovery and tolling provisions of section 340.6 invoke Neel and Budd; "[i]n section 340.6's terms," one-year limitations period that begins upon discovery is tolled pending actual injury]; Laird v. Blacker (1992) 2 Cal.4th 606, 611 [ 7 Cal.Rptr.2d 550, 828 P.2d 691] [section 340.6 "codified the discovery rule of Neel"]; see Cuadra v. Millan (1998) 17 Cal.4th 855, 865, fn. 11 [ 72 Cal.Rptr.2d 687, 952 P.2d 704] [listing section 340.6(a) among "rules postponing the accrual of a cause of action until a specified event occurs, e.g., until discovery of the facts" (italics in original)].)
But even if I agreed that the structure of section 340.6(a) is materially distinct from other common law and statutory delayed-discovery rules, I would apply the "escape clause" of Evidence Code section 500, and would thus retain, for attorney malpractice, the traditional burden of proving when the claim was discovered. As the Law Revision Commission's Comment to Evidence Code section 500 suggests, in deciding whether to depart from normal rules of burden allocation, "courts consider a number of factors: the knowledge of the parties concerning the particular fact, the availability of the evidence to the parties, the most desirable result in terms of public policy in the absence of proof of the particular fact, and the probability of the existence or nonexistence of the fact." (Cal. Law Revision Com. com., reprinted at 29B pt. 1 West's Ann. Evid. Code, supra, foll. § 500, p. 554, italics added.)
The italicized portions of the passage quoted above apply directly here. As the majority appear to concede, the time the plaintiff actually learned of his or her claim, when different from the time the claim actually arose, is a matter primarily within the plaintiff's knowledge. The majority brush aside this concern with the comment that we do not "routinely" alter burdens of proof on this basis, and that plaintiffs are often forced to prove facts primarily within the defendant's knowledge. (Maj. opn., ante, at p. 22.)
The majority suggest there is no reason to assume constructive discovery is primarily within the plaintiff's knowledge. Of course, the common law delayed-discovery rule, from which the majority here depart, does not make the distinction. In any event, I disagree with the majority's premise. Constructive discovery of malpractice occurs as soon as the plaintiff suspects or has reason to suspect that professional negligence has occurred. (See Gutierrez v. Mofid (1985) 39 Cal.3d 892, 897-898 [ 218 Cal.Rptr. 313, 705 P.2d 886] ( Gutierrez) [medical malpractice].) Thus, as with actual discovery, the analysis may often depend on events personal to the plaintiff, and his or her subjective reaction to those events. ( Id., at p. 897.)
But there is merit in the notion that where a litigant has not willfully concealed information, his defense against a stale claim should not depend on his ability to prove when his opponent discovered that information, or should have done so. This principle supports the already-prevailing rule that the burden of proving commencement of a limitations period was delayed by failure to discover the claim is upon the person who seeks the benefit of the delay. Without compelling justification, the majority would depart, for purposes of attorney malpractice, from this established rule.
I do not accept the majority's premise that defendants somehow deserve the burden of proving when attorney malpractice was discovered, because section 340.6(a) has benefitted them by eliminating the "long tail" of indefinite delayed-discovery rules. In any case where the statute's one-year discovery period is involved, the four-year cutoff date is, by definition, not at issue. Moreover, section 340.6(a) already benefits legal malpractice plaintiffs by postponing commencement of the basic one-year limitations period while they excusably fail to discover their claims. Even if the alternate four-year period was intended to maintain fairness to defendants by eliminating the possibility of infinitely delayed claims, I cannot fathom why defendants should therefore be further penalized with respect to the one-year period.
In fact, if there is any case in which the plaintiff should assume the delayed-discovery burden, it is an action for legal malpractice. The defendant in such litigation faces unique and unfair difficulties if forced to prove the time of his opponent's actual or constructive discovery. Here, in particular, the answer to the crucial questions — what the plaintiff knew or suspected and when she knew or suspected it — is peculiarly and exclusively within the plaintiff's control.
This is because discovery of one lawyer's malpractice will most often arise, as it did here, from the substance of the client's consultations with another attorney. Proof of the time of discovery will thus depend, as it did here, on the content of those interviews. But such attorney-client communications are confidential and privileged by law. (Evid. Code, § 954) Unless the client waives the privilege, neither he nor the attorney he consulted can be compelled to disclose the substance of their discussions.
Evidence Code section 958 provides a specific exception to the attorney-client privilege, under which a lawyer accused of malpractice may disclose his confidential communications with his disgruntled client insofar as they bear on the claim of professional negligence. But as we have noted many times, the general "litigant" exceptions to the physician-patient and psychotherapist-patient privileges ( id., §§ 996, 1016) have no counterpart in the attorney-client privilege. Thus, the fact that communications with a lawyer may be probative on issues in a lawsuit, even issues injected by the client himself, does not preclude assertion of the privilege. (E.g., Brockway v. State Bar (1991) 53 Cal.3d 51, 63-64 [ 278 Cal.Rptr. 836, 806 P.2d 803]; People v. Caro (1988) 46 Cal.3d 1035, 1060, fn. 11 [ 251 Cal.Rptr. 757, 761 P.2d 680]; People v. Lines (1975) 13 Cal.3d 500, 509-516 [ 119 Cal.Rptr. 225, 531 P.2d 793].) And the specific exception allowing an accused attorney to defend himself by revealing his own confidential communications with the unhappy client does not expose confidential communications between the client and a different attorney later consulted about possible malpractice. ( Schlumberger Limited v. Superior Court (1981) 115 Cal.App.3d 386, 392-393 [ 171 Cal.Rptr. 413].)
If the client bears the burden of proving when the malpractice claim was discovered, as the trial court ruled here, he may feel obliged, as plaintiff Samuels did here, to present evidence about the timing and nature of his consultations with a second lawyer. But if, as the majority hold, that burden rests with the attorney sued, there is no necessity, and no incentive, for the client to waive the privilege to aid his adversary in establishing a limitations defense. No lawyer worth his salt would allow his client to do so. Thus, it is unclear at best how an attorney sued for malpractice will be able to sustain his burden of proving when the client's discussions with a second lawyer led to actual or constructive discovery of the malpractice claim.
The majority suggest that privilege problems can be overcome by the simple device of asking the client, under oath, the date on which he learned the facts constituting his malpractice claim. The implication is that the client may not decline to answer such a question on grounds that the answer would reveal the substance of confidential communications with a second attorney. The assertion is not convincing. Even if the dates of a client's meetings with his lawyer are not privileged, the client does have the privilege not to disclose what they discussed at any such meeting. If, as is likely, the nature and content of attorney-client discussions on a particular date are the means by which discovery occurred, the client may well be able to claim that by answering the question suggested by the majority, he would reveal the substance of confidential communications.
Accordingly, I disagree with the majority's conclusion that the jury received an incorrect instruction about the burden of proof. But even if that instruction were erroneous, a conclusion also reached by the Court of Appeal, I am persuaded, contrary to the majority and the Court of Appeal, that the error was harmless on this record.
A malpractice statute of limitations triggered by actual or constructive discovery begins to run when the plaintiff knows she has suffered injury and suspects or has reason to suspect that professional blundering is its cause, whether or not she is aware of the precise legal theory or remedy by which redress is available. (E.g., Gutierrez, supra, 39 Cal.3d 892, 897-898 [medical malpractice].) Here, those requirements were clearly met more than one year before plaintiff Samuels filed this malpractice suit against defendant Mix.
The pertinent facts are essentially undisputed. Samuels suffers from eosinophilia myalgia syndrome, an incurable, progressively debilitating, and potentially fatal blood and muscle disorder. The disease has been linked to the drug L-trytophan, which Samuels ingested. Samuels retained defendant Mix to pursue her remedies against Showa Denko, the drug's manufacturer. Samuels hoped and believed the case was worth at least $2 million and was disappointed when Mix recommended she accept Showa Denko's $400,000 settlement offer. Nonetheless, in 1990, Samuels did accept the offer, based on Mix's advice that it was "very good," and that Showa Denko, beset with other L-tryptophan cases, might enter bankruptcy.
The evidence, particularly including Samuels's own deposition and trial testimony, further establishes the following: By October 1991, Samuels realized her $400,000 settlement with Showa Denko was insufficient, because the progress of her disease made clear she would never be able to work. She was also displeased with how Mix had handled the settlement, and had therefore lost confidence in him. Thus, in mid-October 1991, Samuels made an appointment with another attorney, Donald Hildre. Hildre, like Mix, specialized in L-trypto-phan cases. Samuels met with Hildre on October 28, 1991. Her purpose was to determine whether she could "reopen" her case, and whether remedies were available against defendants other than Showa Denko. During the October 28, 1991, meeting, Hildre told her, contrary to Mix's advice, that Showa Denko was financially sound and in no danger of bankruptcy. Samuels left the meeting believing that Mix had materially misrepresented Showa Denko's financial status.
In Samuels's deposition, read at trial, the following interchange occurred: "Question: After that meeting, that first meeting with Don Hildre, did you believe Terry Mix had done anything wrong in the handling of your case? . . . [¶] Answer: I don't — you're asking me if after the first time I met Don Hildre, did I think or did I believe that Terry Mix misrepresented to me? [¶] Question: Had done anything wrong in the handling of your case. [¶] Answer: Yes." At trial, Samuels claimed that if, before meeting with Hildre, she already felt Mix had done something "wrong," her dissatisfaction arose solely from two peripheral complaints, i.e., he used a courier to deliver a settlement check, and he discussed the settlement with others, though Samuels understood it was confidential. Both at trial and in her deposition, Samuels further explained that as a result of the October 28, 1991, meeting with Hildre, she believed Mix had "misrepresented" the financial strength of Showa Denko.
In sum, no later than October 28, 1991, Samuels had concluded her settlement was inadequate, was actively exploring her remedies against all potential defendants, believed Mix had based his settlement advice on crucial misinformation, and distrusted Mix's handling of her case for other reasons as well. By that date, Samuels was therefore on at least constructive notice that she had been the victim of professional negligence. Her suit, filed one year and two days later, was thus barred by the one-year provision of section 340.6(a). There is no reasonable probability the jury, if instructed that Mix rather than Samuels bore the burden of proving when discovery occurred, would have found otherwise. ( People v. Watson (1956) 46 Cal.2d 818, 836 [ 299 P.2d 243]; see Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574 [ 34 Cal.Rptr.2d 607, 882 P.2d 298].) Any instructional error was therefore harmless.
For any or all of the reasons stated above, I would reverse the judgment of the Court of Appeal.