• In a Legal Malpractice Case, Attorney Negligence Cannot Be Found in a Hearing on an Evidentiary Motion
  • May 8, 2009
  • Law Firm: Hinshaw & Culbertson LLP - Chicago Office
  • Blanks v. Seyfarth Shaw LLP, 171 Cal. App. 4th 336, 89 Cal. Rptr. 3d 710 (Cal.App.3d 2009)

    Brief Summary
    Trial court exceeded its authority by disposing of a legal issue (attorney negligence) following a motion in limine.

    Complete Summary
    Plaintiff Billy Blanks, a celebrity, hired defendant Seyfarth Shaw LLP to sue Blanks’ former manager and agent, Jeffrey Greenfield. After learning that Greenfield was not a licensed agent, Blanks sought to recover more than $10 million he had paid to Greenfield.

    Under the California Talent Agencies Act (“TAA”), the Labor Commissioner has exclusive jurisdiction over TAA claims and a party has one year after payment is made to an unlicensed agent to bring a claim. Blanks had paid the money between December 1998 and August 1999. Despite knowledge of the foregoing law and facts, in November 1999 Seyfarth Shaw filed a civil lawsuit in the Superior Court against Greenfield based on alleged TAA violations. Seyfarth Shaw later claimed that it filed in the Superior Court for a strategic reason: to obtain discovery, which is generally not allowed in actions before the Labor Commissioner.

    Despite repeated internal deliberations about whether to petition the Labor Commissioner, Seyfarth Shaw failed to do so until late August 2000—more that a year after Blanks’ final payment to Greenfield. Blanks fired Seyfarth Shaw and continued his action against Greenfield, but lost. Blanks then sued Seyfarth Shaw for, inter alia, legal malpractice. During a motion in limine, the trial court held Seyfarth Shaw negligent as a matter of law. The jury subsequently awarded Blanks the same amount Blanks had paid Greenfield plus punitive damages. Seyfarth Shaw appealed.

    Seyfarth Shaw made three main arguments on appeal. First, Seyfarth Shaw argued that Blanks could not prove causation because his TAA claims were also actionable under unfair competition law (“UCL”), which carries a four year statute of limitations. The Court of Appeal held that because a comprehensive statutory scheme gives the Labor Commissioner exclusive original jurisdiction over TAA claims, “Seyfarth Shaw may not plead around the TAA by stating the requested relief alternatively as a UCL cause of action.” 171 Cal. Rptr. 4th at 366.

    Second, Seyfarth Shaw argued the trial court made a prejudicial error in instructing the jury that the employment agreement between Blanks and Greenfield was not subject to the doctrine of severability. Based on what it called clear precedent, the appellate court held that when an individual acts as both a manager and an (unlicensed) agent, the individual may still be entitled to compensation for managerial services under the doctrine of severability. The appellate court further noted that by not informing the jury of this rule, the trial court had prejudiced Seyfarth Shaw because the jury considered Blanks’ damages an all-or-nothing issue.

    Third, Seyfarth Shaw argued that the trial court exceeded its authority when it held Seyfarth Shaw negligent as a matter of law following a motion in limine. The only issue presented during the motion was whether Seyfarth Shaw could present evidence that the discovery rule could potentially be used to extend the statute of limitations on Blanks’ TAA claims. The trial court held correctly (according to the appellate court) that the discovery rule could not be presented at trial. Given that Seyfarth Shaw’s key justification for letting the statute of limitations run was a good faith belief that the discovery rule could be used to extend the limit, the trial court then held Seyfarth Shaw negligent as a matter of law. The Court of Appeal held that this ruling exceeded the trial court’s authority because in limine motions are not designed to replace dispositive motions under the Code of Civil Procedure (e.g., motions for summary judgment).

    The appellate court also noted that the judgmental immunity doctrine was likely to be addressed on remand. This doctrine can be used to escape a finding of negligence through the argument that an attorney’s decision was based on reasonable research and an informed decision in an unsettled area of law.

    Significance of Opinion
    The court drew a line between evidentiary motions and substantively dispositive motions. Nonetheless, courts sometimes do use in limine motions to dismiss legal issues. Lawyers should prepare themselves accordingly.