Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 02AS05263
HULL, Acting P.J.In 1999, plaintiff Michael Shaw obtained a stipulated judgment against the City of Sacramento (City) in the amount of $650,000. In September 2002, he filed a civil complaint against his attorneys in the earlier action, defendants Leo F. Donahue and the Law Offices of Leo F. Donahue, alleging defendants failed to pay him his proper share of the judgment.
Defendants demurred, asserting plaintiff’s action was filed beyond the one-year statute of limitations on legal malpractice claims (Code Civ. Proc., § 340.6; unspecified section references that follow are to the Code of Civil Procedure). The trial court sustained the demurrer.
Plaintiff appeals, contending: (1) section 340.6 is inapplicable to this case; (2) if section 340.6 is applicable, its one-year limitation period does not apply; and (3) if section 340.6’s one-year period applies, whether plaintiff knew or should have known of the misappropriation of funds before September 2001, that is, more than one year before filing suit, is an issue of fact to be determined by a jury. We disagree with each contention and affirm the judgment.
FACTS AND PROCEEDINGS
In 1994, plaintiff retained the services of defendants to prosecute a reverse discrimination claim against the City. Defendants submitted a claim to the City and others on behalf of plaintiff. The claim was rejected. Defendants then filed a civil action in federal court on behalf of plaintiff. In 1999, plaintiff obtained a judgment against the City.
In August 1999, during the pendency of the City’s appeal of the judgment, defendants negotiated a settlement agreement with the City. Among other things, the settlement agreement provided that the City would pay $650,000 in three installments, each made payable to “Michael Shaw, and his attorney, Leo F. Donahue, attorney-client trust account.” The agreement required the City to make the first payment, in the amount of $300,000, within seven days of approval of the agreement by the City’s counsel and the filing of all documents necessary to comply with the judgment. The second payment, in the amount of $200,000, was to be paid within 45 days of the first. The final payment, in the amount of $150,000, was to be paid within 90 days of the first.
The City timely delivered a check in the amount of $300,000 to defendants, and defendants delivered the check to plaintiff for endorsement. In August 1999, defendants paid plaintiff $150,000. In September 1999, defendants sent plaintiff a form entitled “FINAL SETTLEMENT AND COST STATEMENT.” This statement identified the total amount of the settlement as $300,000 rather than $650,000, and indicated plaintiff was entitled to 70 percent of this amount plus $10,000 in interest, less costs incurred by defendants. The statement concluded that plaintiff was entitled to $66,857.94 in addition to the $150,000 already received. This amount was paid to plaintiff.
In accordance with the terms of the settlement agreement, the City timely delivered the second installment of $200,000 and the third installment of $150,000 to defendants. However, defendants did not inform plaintiff they had received these payments and did not pay any further amounts to plaintiff.
Plaintiff filed this action against defendants in September 2002, alleging, among other things, violation of fiduciary duty and breach of contract. Defendants demurred, arguing the one-year limitation period of section 340.6 had run. The trial court sustained the demurrer, with leave to amend.
Plaintiff filed a first amended complaint. However, the parties thereafter stipulated for entry of judgment whereby plaintiff’s right to appeal the order sustaining the demurrer to the complaint was preserved.
DISCUSSION
I
Standard of Review
“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The complaint must be liberally construed and given a reasonable interpretation, with a view to substantial justice between the parties. (Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141.)
“If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer. ‘[W]e are not limited to plaintiffs’ theory of recovery in testing the sufficiency of their complaint against a demurrer, but instead must determine if the factual allegations of the complaint are adequate to state a cause of action under any legal theory.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38-39.)
II
Applicability of Section 340.6
Section 340.6, subdivision (a), provides in pertinent part: “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.”
Plaintiff contends section 340.6 is inapplicable to this case because the manner in which the attorney fees were handled --namely, the application of the fee agreement to settlement funds--did not arise “in the performance of professional services.” Plaintiff argues that defendants’ litigation, negotiation, and settlement of the dispute between plaintiff and the City, not the handling of the settlement proceeds, constitutes “performance of professional services.”
Defendants counter this argument both procedurally and substantively. Procedurally, they argue plaintiff failed to raise this issue below. Citing Panopulos v. Maderis (1956) 47 Cal.2d 337, defendants argue that plaintiff is precluded from raising this issue for the first time on appeal. (Id. at p. 341.) Plaintiff asserts in response that there is an exception to this general rule where a party raises a question of law, and the facts are not in dispute. (Baker v. Walker & Walker, Inc. (1982) 133 Cal.App.3d 746, 756.)
Assuming we may properly consider plaintiff’s argument for the first time on appeal, it nevertheless fails on the merits. “‘In all cases other than actual fraud, whether the theory of liability is based on the breach of an oral or written contract, a tort, or a breach of a fiduciary duty, the one-year statutory period applies. [Citation.]’” (Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 68.) In Stoll v. Superior Court (1992) 9 Cal.App.4th 1362, the court concluded a plaintiff cannot circumvent the one-year statute of limitations applicable to legal malpractice claims by styling his claims as one for breach of fiduciary duty. (Id. at pp. 1366-1369.) In Levin v. Graham & James (1995) 37 Cal.App.4th 798, the court suggested one cannot assert a claim for refund of unreasonable fees without alleging malpractice. (Id. at pp. 804-805.)
Because plaintiff’s claim is not one for fraud and arises out of his attorneys’ alleged failure to comply with the terms of the parties’ agreement, it arises in the performance of professional services, within the meaning of section 340.6.
III
Section 340.6’s One-Year Period
Plaintiff next contends that, should the dispute between the parties be deemed to have arisen in the performance of professional services, section 340.6’s one-year provision is inapplicable, because an action for accounting, or an implied-in-fact contract, is equitable in nature and is available when no adequate remedy at law exists. According to plaintiff, he “has no adequate remedy at law due to [defendants’] failure to keep him informed as to his rights respecting the funds received.”
However, acceptance of plaintiff’s argument would effectively eviscerate the one-year limitation period. One cannot assert a claim for recovery of unreasonable attorney fees through an accounting, quantum meruit, or money had and received without also alleging malpractice. (Levin v. Graham & James, supra, 37 Cal.App.4th at pp. 804-805 [“Levin’s repeated assertion that one can assert a claim or state a cause of action for refund of unreasonable attorney fees (e.g., quantum meruit, money had and received) without also alleging malpractice is the first of a sea of red herrings beached on the pages of his briefs”].)
IV
Discovery of the Wrongful Act
Plaintiff’s final contention is that, assuming the one-year limitation period applies, the question of whether he knew or should have known of defendant’s misappropriation of funds before September 2001 that is, more than one year before filing suit, is one of fact to be determined by a jury. Plaintiff cites Krusesky v. Baugh (1982) 138 Cal.App.3d 562, which states a client need only investigate when he “has actual notice of facts sufficient to arouse the suspicions of a reasonable person,” and notes that concluding “otherwise . . . would in effect require a client to consult a second lawyer in every case for another opinion on every subject.” (Id. at p. 568.)
Plaintiff further argues that, given the claim in federal court may have been California’s first litigated reverse discrimination case resulting in a successful recovery, he had every reason to rely on defendants’ advice. Plaintiff further argues that, because defendants kept him in the dark about the terms of the settlement agreement, defendants had a duty to disclose the existence of a conflict of interest between the parties. Because defendants failed to disclose this conflict, plaintiff argues, he had no reason to suspect he might not have been treated fairly.
We are not persuaded. It is well settled that the one-year limitations period of section 340.6 “is triggered by the client’s discovery of ‘the facts constituting the wrongful act or omission,’ not by his discovery that such facts constitute professional negligence, i.e., by discovery that a particular legal theory is applicable based on the known facts.” (Worton v. Worton (1991) 234 Cal.App.3d 1638, 1650.)
Plaintiff’s settlement with the City occurred on August 11, 1999, when the parties executed the settlement agreement. The agreement’s terms expressly provided that the City would deliver three payments in the total amount of $650,000, each made payable to “Michael Shaw, and his attorney, Leo F. Donahue, attorney-client trust account.” The first payment was to be disbursed seven days after approval by the City’s counsel and plaintiff’s submittal of necessary documentation. The second and third payments were to be disbursed 45 and 90 days respectively after the first payment. The City made all three payments in a timely manner.
This does not necessarily mean plaintiff knew at the time that the checks had been delivered. However, plaintiff did receive the first check on time. He also received from defendants shortly thereafter a form entitled “FINAL SETTLEMENT AND COST STATEMENT.” Further, having knowledge that the remaining two checks should be disbursed as set forth in the settlement agreement, and not having received any further payment after the proscribed time, plaintiff, at the very least, was on notice that something was not right.
Plaintiff claims it was reasonable for him not to have discovered the necessary facts until after September 2001, thus making his claim, filed in September 2002, timely. He claims his reliance on defendants essentially absolved him of any responsibility to be diligent and reasonable. We disagree. Plaintiff obtained a settlement in the amount of $650,000 and his share of the first payment soon thereafter. However, no further payments were received from defendants, despite the fact they were scheduled to be made within 90 days. The complaint alleges nothing as to why plaintiff made no inquiry concerning the rest of the settlement proceeds.
“The test is whether the plaintiff has information of circumstances sufficient to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his or her investigation.” (McGee v. Weinberg (1979) 97 Cal.App.3d 798, 803.)
The inquiry on appeal from a demurrer sustained without leave to amend is whether the trial court properly determined that, as a matter of law, the failure to earlier discover the claim was due to plaintiff’s failure to investigate or act with reasonable diligence. (Bastian v. County of San Luis Obispo (1988) 199 Cal.App.3d 520, 527; Dujardin v. Ventura County Gen. Hosp. (1977) 69 Cal.App.3d 350, 356.) We hold that it did. No reasonable jury could find otherwise.
Based on the facts alleged in the complaint, it is difficult to argue plaintiff did not have information of circumstances sufficient to put him on notice of a claim against his attorneys. As noted above, he knew the content of the settlement agreement, which outlined the payment schedule with the appropriate number of days within which checks would be disbursed. He had a document from defendant entitled “FINAL SETTLEMENT AND COST STATEMENT,” which outlined the final settlement amount of $310,000, rather than $650,000, and the percentage of that final amount that would go to both sides. Finally, there was the passage of time which, after the period set forth in the settlement agreement for the final payments, should have put plaintiff on notice that perhaps an inquiry was warranted. While it is understandable that plaintiff would want to rely on his attorney, who had just obtained a judgment in his favor, it is no excuse for plaintiff’s inaction for almost three years. There are no facts alleged in the complaint to suggest plaintiff did anything during this period to protect his rights or to explain his inaction. His claim is therefore barred by the one-year statute of limitations of section 340.6.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal. (Cal. Rules of Court, rule 8.276(a)(1).)
We concur: BUTZ, J., CANTIL-SAKAUYE, J.