Stanford Law School - Robert Crown Law Library

Filed 9/27/07

IN THE SUPREME COURT OF CALIFORNIA

BEAL BANK, SSB,
Plaintiff and Appellant,
S141131
v.
Ct.App. 2/2 B179383
ARTER & HADDEN, LLP, et al.,
Los Angeles County
Defendants and Respondents. )
Super. Ct. No. BC308535

Under California law, the statute of limitations for attorney malpractice
claims arising from a given matter is tolled for the duration of the attorney’s
representation of the client in that matter. (Code Civ. Proc., § 340.6, subd. (a)(2).)
When an attorney leaves a firm and takes a client with him, does the tolling in
ongoing matters continue for claims against the former firm and partners? We
conclude it does not and reverse the judgment of the Court of Appeal.
FACTUAL AND PROCEDURAL BACKGROUND1
In 1996, plaintiff Beal Bank, SSB, (Beal Bank) acquired certain loans from
another bank, which had been placed into conservatorship by the Federal Deposit
Insurance Corporation (FDIC). The loan documents contained default interest
clauses that provided that in the event of default, the entire balance of principal

1
Because this appeal is from the sustaining of a demurrer, we take the well-
pleaded facts recited in plaintiff Beal Bank, SSB’s first amended complaint as
true. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
1

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and interest would become due and thereafter bear interest at an increased rate
over and above the contract rate. The debtors missed payments on some of the
loans. By the time Beal Bank acquired the loans, the debtors had negotiated with
the FDIC discounted payoffs of the remaining loans, but had failed to make those
payments as well. Beal Bank sent the debtors notices of acceleration and default
and recorded notices of default.
In March 1997, Beal Bank retained respondent Arter & Hadden, LLP, to
handle its collection efforts. Respondent Eric Dean, a partner, was the attorney
primarily responsible for the representation. Counsel for the debtors advised Arter
& Hadden, LLP, through correspondence and other means, that Beal Bank had no
legal or factual basis for attempting to collect the default interest.
In June 1997, the debtors transferred the collateral for the outstanding loans
to an entity they controlled. On the following day, that entity filed for bankruptcy
protection. Steven Gubner, an associate at Arter & Hadden, LLP, then began
representing Beal Bank in the bankruptcy court. On Beal Bank’s behalf, Arter &
Hadden, LLP, filed a motion for summary judgment in the bankruptcy court,
arguing that Beal Bank was entitled to recover the default interest. The
bankruptcy court ruled against Beal Bank and entered its final order on May 28,
1998. Beal Bank appealed the matter to the district court.
On December 31, 1998, Gubner left the employ of Arter & Hadden, LLP,
and formed Gubner & Associates, which later became Ezra, Brutzkus & Gubner.
In turn, Gubner’s new firms took over representation of Beal Bank. In April 1999,
the district court affirmed the bankruptcy court’s ruling, and Beal Bank,
represented by Ezra, Brutzkus & Gubner, appealed to the Ninth Circuit Court of
Appeals. On September 25, 2001, the Ninth Circuit issued its opinion, affirming
the rulings of the lower courts. (In re Crystal Properties, Ltd., L.P. (9th Cir. 2001)
268 F.3d 743.)
2

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On September 24, 2002, Beal Bank filed a legal malpractice action against
the attorneys who had represented it in the unsuccessful litigation: Gubner;
Gubner & Associates; Ezra, Brutzkus & Gubner; Arter & Hadden, LLP; and Dean.
Two days later, Gubner filed a notice of withdrawal as counsel for Beal Bank in
the bankruptcy court. All parties thereafter entered a tolling agreement covering
the period September 24, 2002, to December 31, 2003, and Beal Bank dismissed
the action.
On December 30, 2003, Beal Bank filed this action against the same
defendants. It alleged defendants had failed to conduct any legal research, advise
Beal Bank that its position was unlikely to prevail, or inform it of the risks
involved in continuing to maintain its position. As a result, Beal Bank incurred
unnecessary legal fees, was deprived of an opportunity to settle with the debtors
on favorable terms, and was forced to defend a breach of contract action brought
by the debtors.
Arter & Hadden, LLP, and Dean demurred, arguing that Beal Bank suffered
an actual injury on May 28, 1998, the date the bankruptcy court entered an adverse
ruling against it, which commenced the running of the one-year statute of
limitations under Code of Civil Procedure section 340.6 on Beal Bank’s
malpractice claim. Relying on Crouse v. Brobeck, Phleger & Harrison (1998) 67
Cal.App.4th 1509 (Crouse), which held that continuing representation by a firm’s
ex-attorney does not toll the statute of limitations against the firm, they argued that
the statute of limitations was tolled as to them only until December 31, 1998,
when Gubner left Arter & Hadden, LLP, taking Beal Bank with him as a client,
and Arter & Hadden, LLP, ceased representing Beal Bank. Accordingly, the one-
year limitations period expired on December 31, 1999.
In opposition, relying on Beane v. Paulsen (1993) 21 Cal.App.4th 89
(Beane), which held that continuing representation by a firm’s ex-attorney does
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toll the statute of limitations against the firm and its partners, Beal Bank argued
that the statute of limitations was tolled during the time Gubner continued to
represent Beal Bank and, by virtue of the parties’ 2002 tolling agreement, its
malpractice action was timely filed.
The trial court acknowledged the conflict of authority between Crouse,
supra, 67 Cal.App.4th 1509, and Beane, supra, 21 Cal.App.4th 89. It found
Crouse more persuasive, concluded the claims were time-barred, sustained the
demurrers without leave to amend, and entered judgments of dismissal as to Dean
and Arter & Hadden, LLP.2
On appeal, the Court of Appeal agreed with the reasoning of Beane, supra,
21 Cal.App.4th 89, disagreed with the reasoning of Crouse, supra, 67 Cal.App.4th
1509, and reversed. It held equitable considerations and potential disruption of the
ongoing relationship between the departed attorney and client by an indemnity suit
justified tolling the statute of limitations against the former firm.
We granted review to resolve this split of authority.
DISCUSSION
As in all cases of statutory interpretation, we begin with the language of the
governing statute. (Elsner v. Uveges (2004) 34 Cal.4th 915, 927.) Our role in
interpreting it is “to divine and give effect to the Legislature’s intent.” (Brodie v.
Workers’ Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 1324.) If the statute’s text
evinces an unmistakable plain meaning, we need go no further. (Microsoft Corp.
v. Franchise Tax Bd. (2006) 39 Cal.4th 750, 758.) If it is ambiguous, we may
consider a variety of extrinsic sources in order to identify the interpretation that
best effectuates the legislative intent. (Ibid.)

2
Hereafter, we refer collectively to respondents Arter & Hadden, LLP, and
Dean as Arter & Hadden.
4

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Code of Civil Procedure section 340.6, subdivision (a)3 provides in part:
“An action against an attorney for a wrongful act or omission . . . 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 [where
specified circumstances give rise to tolling].” Thus, the limitations period is one
year from actual or imputed discovery, or four years (whichever is sooner), unless
tolling applies.
The parties agree this action is timely if and only if Gubner’s continued
representation of Beal Bank after he left Arter & Hadden tolled the claims against
Arter & Hadden under section 340.6, subdivision (a)(2), which tolls claims so long
as “[t]he attorney continues to represent the plaintiff regarding the specific subject
matter in which the alleged wrongful act or omission occurred.” Significantly,
while section 340.6, subdivision (a) defines the limitations period for “[a]n action
against an attorney,” the tolling provision in subdivision (a)(2) extends the
limitations period only during ongoing representation by “[t]he attorney.” Under
ordinary rules of grammar, “[t]he attorney” in subdivision (a)(2) refers back to the
“attorney” who is the target of the action in subdivision (a). (Cf. People v.
Briceno (2004) 34 Cal.4th 451, 461 [word used in a statute presumed to have the
same meaning throughout].) Thus, under the most natural reading of the statute,
an action against an individual attorney is tolled so long as that attorney continues

3
All subsequent statutory references are to the Code of Civil Procedure.
5

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representation; conversely, an attorney’s continued representation tolls an action
only against that attorney.
The Court of Appeal dismissed the text of the statute by noting that section
340.6 has also been applied to actions against law firms (Jordache Enterprises,
Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739 (Jordache); Gold v.
Weissman (2004) 114 Cal.App.4th 1195), but this observation does not suggest a
different reading. Although Jordache involved a malpractice action against a law
firm, the court expressly declined to discuss or interpret subdivision (a)(2).
(Jordache, at p. 747, fn. 5.) In Gold, the court analyzed subdivision (a)(2), but
only in the context of interpreting the subdivision’s “same subject” language and
deciding how long representation by the defendant firm continued. (Gold, at pp.
1200-1201.) Neither case involved, as here, an action against both a law firm and
an attorney no longer affiliated with that firm. Instead, each implicitly recognized
that where a client hires a law firm to represent it, the provisions of section 340.6
apply to that firm; the term “attorney” in section 340.6 may embrace the entire
partnership, law corporation, or other legal entity the client retains.
That either an attorney or a firm may be the subject of an action does not
support a reading under which representation by one attorney or firm might toll
the limitations period as to another no longer affiliated attorney or firm. Rather,
the text implies an action against a law firm is tolled so long as that firm continues
representation, just as an action against an attorney is tolled so long as that
attorney continues representation, but representation by one attorney or firm does
not toll claims that may exist against a different, unaffiliated attorney or firm.
The history leading up to the enactment of section 340.6 suggests a
legislative intent consistent with this reading. Attorney malpractice actions were
once governed by a strict two-year limitations period running from the time of the
negligent act. (See § 339, subd. (1); Laird v. Blacker (1992) 2 Cal.4th 606, 610-
6

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611.) In 1971, recognizing that this rule was “harsh,” “unfair,” and
“discriminatory,” we held that a malpractice action accrues only when the client
discovers or should discover the facts essential to the malpractice claim, including
actual and appreciable harm. (Neel v. Magana, Olney, Levy, Cathcart & Gelfand
(1971) 6 Cal.3d 176, 186, 194 (Neel); Budd v. Nixen (1971) 6 Cal.3d 195, 200-201
(Budd); see Laird, at p. 611.) As we then recognized, however, this delayed
discovery rule placed “an increased burden upon the legal profession,” having as
one undesirable consequence the subjecting of attorneys to open-ended liability:
“An attorney’s error may not work damage or achieve discovery for many years
after the act, and the extension of liability into the future poses a disturbing
prospect.” (Neel, at p. 192.) We suggested some absolute outside limit might be
desirable. (Id. at pp. 192-193.)
The problems we foresaw in Neel and Budd began to manifest themselves
in the form of rapidly rising malpractice insurance premiums. (Mallen, Panacea
or Pandora’s Box? A Statute of Limitations for Lawyers (1977) 52 Cal. St. B.J. 22,
22 (hereafter Statute of Limitations) [reporting increases of 100 to almost 400
percent in a single year]; Mallen, An Examination of a Statute of Limitations for
Lawyers (1978) 53 Cal. St. B.J. 166, 166 [“Malpractice insurance has become so
expensive and hard to purchase that last year California lawyers debated an
abortive effort for a State Bar sponsored insurance program” as an alternative to
private insurance].) The 1977 Mallen article included a proposed model attorney
malpractice statute of limitations. (Statute of Limitations, at p. 24.) The article
was circulated to legislators, and later in 1977, drawing heavily from Mallen’s
proposed language, the Legislature passed Assembly Bill No. 298 (1977-1978
Reg. Sess.), enacting a special statute of limitations for attorney malpractice. (See
§ 340.6.)
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In particular, while the originally introduced version of Assembly Bill No.
298 limited grounds for tolling to fraud or intentional concealment, Mallen’s
article suggested an expanded set of tolling provisions. (See Assem. Bill No. 298
(1977-1978 Reg. Sess.) as introduced Jan. 25, 1977, p. 2; Statute of Limitations,
supra, 52 Cal. St. B.J. at p. 24.) In May 1977, the bill was rewritten with Mallen’s
proposal as a template, borrowing verbatim the proposed “continuous
representation” tolling provision. (See Assem. Bill No. 298 (1977-1978 Reg.
Sess.) as amended May 9, 1977, p. 3; Statute of Limitations, at p. 24; Hensley v.
Caietti (1993) 13 Cal.App.4th 1165, 1171.) This provision was intended to codify
the continuous representation rule as it had then developed in other states. (Sen.
Com. on Judiciary, 2d reading analysis of Assem. Bill No. 298 (1977-1978 Reg.
Sess.) as amended May 17, 1977, p. 3; Statute of Limitations, at p. 24; Hensley, at
p. 1171.) Notably, however, in the few years since the rule’s 1968 development
by a pair of New York courts (Siegel v. Kranis (N.Y.App.Div. 1968) 288
N.Y.S.2d 831, 834-835; Wilson v. Econom (N.Y.Sup.Ct. 1968) 288 N.Y.S.2d 381,
383-384; see Mallen & Smith, Legal Malpractice (2007 ed.) § 22.13, pp. 397-398),
the rule had been extended only to tolling of an action based on continued
representation by the defendant attorney or firm.4 We are thus reluctant to

4
See Basic Food v. Travis, Warren, Nayer & Burgoyne (Mich.Ct.App. 1975)
231 N.W.2d 466, 468; Mich. Comp. Laws Ann. § 600.5838; Grago v. Robertson
(N.Y.App.Div. 1975) 370 N.Y.S.2d 255, 259; Siegel v. Kranis, supra, 288
N.Y.S.2d at page 835; Wilson v. Econom, supra, 288 N.Y.S.2d at page 384;
Keaton Co. v. Kolby (Ohio 1971) 271 N.E.2d 772, 774; Statute of Limitations,
supra, 52 Cal. St. B.J. at page 24, footnote 19 (identifying these authorities as
reflective of the rule’s application); see also Mallen & Smith, Legal Malpractice,
supra, § 22.13, page 401 (“The predicate of the rule requires representation by the
defendant lawyer” (italics added)).
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conclude the Legislature intended a broader application when it codified the
continuous representation rule.
We note as well that the interpretation most naturally suggested by the
statute’s text dovetails with the Legislature’s ostensible purposes in adopting
section 340.6. Assembly Bill No. 298 reflected a balancing of the interests of
clients, who should not be prevented from obtaining relief when they could not
have become aware of professional negligence, and attorneys, who in order to
obtain malpractice coverage needed some definite outside limitations period. To
protect clients, the Legislature codified the Neel/Budd delayed discovery rule (Sen.
Com. on Judiciary, 2d reading analysis of Assem. Bill No. 298 (1977-1978 Reg.
Sess.) as amended May 17, 1977, p. 2; see Laird v. Blacker, supra, 2 Cal.4th at
p. 611), albeit with a one-year limit from the time of actual or imputed discovery.
To protect attorneys, it adopted a firm four-year outside limit on liability, thus
making it more feasible to obtain affordable professional liability insurance. As
the legislative history indicates, “[t]he purpose of the bill [was] to reduce the costs
of legal malpractice insurance.” (Sen. Com. on Judiciary, 2d reading analysis of
Assem. Bill No. 298 (1977-1978 Reg. Sess.) as amended May 17, 1977, p. 1; see
also Sen. Democratic Caucus, Analysis of Assem. Bill No. 298 (1977-1978 Reg.
Sess.) as amended Aug. 17, 1977, p. 1 [the bill was intended to “reduce[] the cost
of legal malpractice insurance, and limit[] the open-endedness of current law”].)
The statute includes four tolling provisions. (§ 340.6, subd. (a)(1)-(4).)
These provisions necessarily diminish somewhat the certainty about the scope of
potential liability that may still be outstanding, but the Legislature determined that
in each specified circumstance, countervailing policies justified extension of the
liability period. We previously have explained the legislative purposes underlying
subdivision (a)(2)’s continuous representation exception: it “was adopted in order
to ‘avoid the disruption of an attorney-client relationship by a lawsuit while
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enabling the attorney to correct or minimize an apparent error, and to prevent an
attorney from defeating a malpractice cause of action by continuing to represent
the client until the statutory period has expired.’ ” (Laird v. Blacker, supra, 2
Cal.4th at p. 618, quoting Sen. Com. on Judiciary, 2d reading analysis of Assem.
Bill No. 298 (1977-1978 Reg. Sess.) as amended May 17, 1977, p. 3.)
These purposes are minimally implicated in a case such as this where an
individual defendant attorney has left a defendant law firm. When a lawyer leaves
a firm and takes a client with him, the firm’s representation of the client ceases.
There is no risk the firm will attempt to run out the clock on the statute of
limitations by offering reassurances and blandishments about the state of the case.
Conversely, the firm loses all ability to mitigate any damage to the client. (See
Crouse, supra, 67 Cal.App.4th at p. 1539.) Nor is there any ongoing firm-client
relationship to disrupt.5
As the purposes underlying section 340.6, subdivision (a)(2)’s limited
tolling provision are not directly implicated, we need not contemplate a strained
textual interpretation that might somehow extend to this case. To do so with this
statute would in any event be particularly unwise: “[S]ection 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. The courts may not shift that balance by devising expedients that extend
or toll the limitations period. The Legislature expressly disallowed tolling under
any circumstances not stated in the statute.” (Jordache, supra, 18 Cal.4th at
p. 756; see also Laird v. Blacker, supra, 2 Cal.4th at p. 618 [statute defines limited

5
We discuss below the impact of our interpretation on the relationship
between the client and the current attorney. (Post, at pp. 12-14.)
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and exclusive bases for tolling]; Foxborough v. Van Atta (1994) 26 Cal.App.4th
217, 224.)
In contrast, the Court of Appeal’s contratextual reading, while not
materially advancing the policies behind the continuous representation tolling
exception, would significantly undermine the Legislature’s overall purposes in
adopting section 340.6. Contrary to the Legislature’s express intent to curtail
open-ended liability, the Court of Appeal rule would revive indeterminate liability
for firms every time an attorney leaves and takes a client with him or her. In each
such instance, exposure would extend indefinitely based on forces outside the
firm’s control. In an era of ever increasing attorney mobility, the consequence of
the Court of Appeal’s interpretation would be a significant increase in uncertainty
over exposure, with inevitable consequences for the cost and availability of
liability insurance.
It is not for us as judges to determine independently what wise policy in
this area should be. However, we will not lightly assume the Legislature intended
such a broad, rule-swallowing exception when it adopted a limitations period
intended to curtail widespread open-ended liability and reduce insurance costs,
absent a strong textual basis for doing so. Here, there is no such basis.
The Court of Appeal in Beane, supra, 21 Cal.App.4th 89, reached a
contrary conclusion by focusing solely on equity, never considering whether the
language of section 340.6 might indicate a particular result. In Beane, an attorney
at a small firm, Vodonick, allegedly failed to protect his octogenarian client’s
interests in rescinding a large promissory note obtained through undue influence.
After the firm dissolved, Vodonick provided continuing representation without
materially improved results; eventually the (now deceased) client’s estate sought
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relief against both Vodonick and his former fellow shareholders.6 The Beane
court rejected the former fellow shareholders’ statute of limitations defense,
concluding that continued representation by one former member of the firm tolled
the statute as to all former members under an “all for one and one for all” rule.
(Beane, at p. 99.)
Beane identified two equitable considerations in support of its rule. First,
suit against the former fellow shareholders might disrupt the client’s ongoing
relationship with the departing attorney who still represented her if the former
fellow shareholders brought indemnity actions against him. Second, the fiduciary
relationship between attorney and client would “lull the client into inaction” even
after the client learned of an adverse result (Beane, supra, 21 Cal.App.4th at p. 99)
as indeed in the court’s eyes did Vodonick’s soothing reassurances to his elderly
client (ibid.). In agreeing with Beane, the Court of Appeal here noted as well that
indirect disruption of the ongoing attorney-client relationship would impede the
current attorney’s ability to cure the error or mitigate its consequences, and failing
to toll as to the firm would inequitably place the burden of malpractice only on the
current attorney.
Beane, the Court of Appeal, and Beal Bank each focus on the elimination
of even the potential for disruption of the current attorney-client relationship as the
paramount policy concern. But potential disruption from third party indemnity
suits is surely less of a concern than that which triggered enactment of the
continuous representation tolling provision — i.e., forcing the client to
prematurely sue the attorney. Moreover, any disruption may be reduced through
voluntary tolling agreements, as have been entered into in this case and in

6
The firm had been organized as a professional corporation.
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numerous others,7 or though stays of litigation. As we have previously
emphasized, “ ‘trial courts have inherent authority to stay malpractice suits,
holding them in abeyance pending resolution of underlying litigation.’ ” (Coscia
v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1211, quoting Adams v. Paul
(1995) 11 Cal.4th 583, 593 (lead opn. of Arabian, J.).) The liberal use of tolling
agreements and stays in malpractice cases may reduce the impact on the
underlying litigation, ensure that plaintiffs do not have their claims prematurely
barred, protect defendants’ and defendants’ insurers’ interests in “receiving timely
notice and avoiding stale claims” (Coscia, at p. 1211), and allow current counsel,
to the extent practicable, to continue to work to ameliorate the consequences of
any past mistakes. Current counsel will have considerable incentive to do so, as
any mitigation will reduce their own potential future liability.
As for the further risk Beane noted, that current counsel will continue to lull
unwary clients and prevent them from suing (Beane, supra, 21 Cal.App.4th at
p. 99), attorneys have a fiduciary obligation to disclose material facts to their
clients, an obligation that includes disclosure of acts of malpractice (Neel, supra, 6
Cal.3d at pp. 188-189). Former counsel are powerless to control whether current
counsel breach that obligation. To the extent current counsel do breach that
obligation, it will do nothing to reduce their own liability, as their own ongoing
representation will continue to toll the limitations period on claims against them; it
will instead simply increase the risk that when the client does sue, current counsel
and current counsel alone will be forced to bear responsibility for any errors. The

7
See, e.g., Jordache, supra, 18 Cal.4th at page 746; Crouse, supra, 67
Cal.App.4th at page 1522; Mallen & Smith, Legal Malpractice, supra, § 22:12,
pages 396-397 (“Experience has shown that most lawyers are willing to toll a
statute of limitations upon the hope that the existence or extent of an injury will be
reduced or eliminated by subsequent judicial action”).
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interpretation of section 340.6, subdivision (a)(2) we adopt thus creates an
additional incentive for counsel to fulfill their fiduciary duties.8
We do not presume that our interpretation offers a perfect solution or that
stays and tolling agreements will eliminate entirely disruption of the client’s
relationship with its chosen counsel. Given the conflicting interests at stake, there
are no perfect solutions. The interpretation we adopt is the one most faithful to
section 340.6’s language and to the full range of interests the Legislature balanced
in passing that statute. The Court of Appeal, and Beane before it, erred in
disregarding section 340.6’s language and in engaging in policy analysis
unmoored from the statutory text. We disapprove Beane v. Paulsen, supra, 21
Cal.App.4th 89, to the extent it is inconsistent with this opinion.

8
The statutory text contains an additional clue that preventing even indirect
disruption was not the overriding consideration for the Legislature. The
continuous relationship tolling provision applies only so long as representation
continues “regarding the specific subject matter in which the alleged wrongful act
or omission occurred.” (§ 340.6, subd. (a)(2).) Once representation on that matter
ends, a client must bring timely suit, notwithstanding that the attorney may
continue to represent the client on a range of matters and a direct suit against the
attorney may interfere with the attorney-client relationship in all other such
matters. Had the Legislature intended preservation of the attorney-client
relationship as a dispositive trump card, it would not have so limited the scope of
the tolling exception.
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DISPOSITION
The Court of Appeal’s judgment is reversed.

WERDEGAR, J.
WE CONCUR:
GEORGE, C. J.
KENNARD, J.
BAXTER, J.
CHIN, J.
MORENO, J.
CORRIGAN, J.

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Beal Bank, SSB v. Arter & Hadden, LLP
__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted XXX 135 Cal.App.4th 643
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S141131
Date Filed: September 27, 2007
__________________________________________________________________________________

Court:

Superior
County: Los Angeles
Judge: John P. Shook

__________________________________________________________________________________

Attorneys for Appellant:

Leland, Parachini, Steinberg, Matzger & Melnick, Harvey L. Gould; Carroll, Burdick & McDonough,
Vicki L. Freimann, Richard Fannan and David M. Rice for Plaintiff and Appellant.

__________________________________________________________________________________

Attorneys for Respondent:

Horvitz & Levy, David M. Axelrad, Frederic D. Cohen; Moscarino & Connolly, John M. Moscarino and
Paula C. Greenspan for Defendants and Respondents.

Jones Day, Elwood Lui, Eugenia Castruccio Salamon; Snell & Wilmer and Richard A. Derevan for Los
Angeles County Bar Association as Amicus Curiae on behalf of Defendants and Respondents.

Heller Ehrman and Adam M. Cole for Bingham McCutchen, Cooley Godward Kronish, Farella Braun +
Martel, Howard Rice Nemerovski Canady Falk & Rabkin, Morrison & Foerster, Orrick Herrington &
Sutcliffe, Pillsbury Winthrop Shaw Pittman and Thelen Reid & Priest as Amici Curiae on behalf of
Defendants and Respondents.

Robie & Matthai, Edith R. Matthai, Kyle Kveton and Steven S. Fleischman for Association of Southern
California Defense Counsel as Amicus Curiae on behalf of Defendants and Respondents.

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Counsel who argued in Supreme Court (not intended for publication with opinion):

David M. Rice
Carroll, Burdick & McDonough
633 West Fifth Street, 51st Floor
Los Angeles, CA 90071
(213) 833-4500

John M. Moscarino
Moscarino & Connolly
1100 Glendon Avenue, 14th Floor
Los Angeles, CA 90024-3503
(310) 500-3411

Elwood Lui
Jones Day
555 South Figueroa Street, 50th Floor
Los Angeles, CA 90071-2300
(213) 489-3939

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Opinion Information

Date:	Docket Number:
Thu, 09/27/2007	S141131

Disposition
Sep 27 2007	Opinion: Reversed

Dockets
Feb 14 2006	Petition for review filed   Arter & Hadden LLP John M. Moscarino, retained
Feb 15 2006	Received Court of Appeal record
Feb 15 2006	Record requested
Mar 6 2006	Answer to petition for review filed   counsel for aplt, Beal Bank, SSB
Mar 13 2006	Request for depublication (petition for review pending)   Gaims, Weil, West & Epstein, LLP Steven S. Davis, retained.
Mar 15 2006	Reply to answer to petition filed   respondent Arter & Hadden LLP and Eric Dean
Apr 13 2006	Time extended to grant or deny review   to and including May 15, 2006, or the date upon which review is either granted or denied.
Apr 19 2006	Petition for review granted (civil case)   Votes: George, C.J., Kennard, Baxter, Werdegar, Chin, Moreno, and Corrigan, JJ.
May 5 2006	Certification of interested entities or persons filed   Arter & Hadden LLp et al., Respondents by Paula C. Greenspan, counsel
May 9 2006	Request for extension of time filed   to file opening brief on the merits respondents Arter & Hadden, LLP asking to June 19, 2006
May 15 2006	Extension of time granted   Respondent's time to serve and file the opening brief on the merits is extended to and including June 19, 2006.
Jun 20 2006	Opening brief on the merits filed   counsel for resp. Arter & Hadden, LLP and Eric Dean (40.1(b))
Jun 20 2006	Request for judicial notice filed (granted case)   counsel for resps.
Jun 20 2006	Association of attorneys filed for:   Counsel for resps. associates the firm of Horvitz & Levy LLP, as co-counsel
Jul 5 2006	Request for extension of time filed   Counsel for aplt. (Beal Bank, SSB) requests extension of time to August 21, 2006, to file the answer brief on the merits.
Jul 11 2006	Extension of time granted   Appellant's time to serve and file the answer brief on the merits is extended to and including August 21, 2006.
Jul 28 2006	Request for extension of time filed   Appellant requests a 25-day extension to and including September 15, 2006, to file appellant's answer brief on the merits. Beal Bak SSB, Appellant by David M. Rice, counsel
Aug 2 2006	Extension of time granted   Appellant's time to serve and file the answer brief on the merits is extended to and including September 15, 2006.
Sep 15 2006	Answer brief on the merits filed   counsel for Beal Bank, SSB
Sep 26 2006	Request for extension of time filed   to file Reply Brief/Merits to October 19, 2006. respondents Arter & Hadden LLP and Eric Dean
Oct 5 2006	Extension of time granted   On application of respondents and good cause appearing, it it ordered that the time to serve and file the reply brief on the merits is extended to and including October 19, 2006.
Oct 18 2006	Application to file over-length brief filed   respondents Arter & Hadden LLP and Eric Dean to file Reply Breif/Merits [6655 words)
Oct 23 2006	Reply brief filed (case fully briefed)   w/ permission counsel for resps.
Nov 17 2006	Received application to file Amicus Curiae Brief   Heller Ehrman, LLP, et al. in support of respondents.
Nov 22 2006	Received application to file Amicus Curiae Brief   and Brief of The Association of Southern California Defense Counsel on behalf of respondents Arter & Hadden, LLP attorney Edith R. Matthai
Nov 22 2006	Received application to file Amicus Curiae Brief   and Brief of the Los Angeles County Bar Association and The Orange County Bar Association on behalf of respondents Arter & Hadden, LLP attorney Eugenia Castruccio Salamon
Nov 28 2006	Permission to file amicus curiae brief granted   Heller Ehrman, LLP, et al, to file an amicus curiae brief in support of respondents is hereby granted.
Nov 28 2006	Amicus curiae brief filed   The application of Heller Ehrman, LLP, et al., for permission to file an amicus curiae brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Dec 11 2006	Permission to file amicus curiae brief granted   Los Angeles County Bar Association et al., in support of respondents.
Dec 11 2006	Amicus curiae brief filed   Los Angeles County Bar Association, et al, for permission for file and amicus curiae brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Dec 11 2006	Permission to file amicus curiae brief granted   Association of Southern California Defense Counsel in support of respondents.
Dec 11 2006	Amicus curiae brief filed   The application of Association of Southern California Defense Counsel for permission to file and amicus curiae brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Dec 18 2006	Filed:   Counsel for aplt. (Beal Bank, SSB) Request permission to file combined response to Amici Curiae briefs filed by nine law firms.
Dec 19 2006	Response to amicus curiae brief filed   counsel for aplt. (Beal Bank, SSB) w/permission (combined response)
Dec 26 2006	Received:   letter from counsel for aplt. (Beal Bank) re: unavailability on the dates between 2-15-07 and 3-9-07 for oral argument.
Mar 2 2007	Change of contact information filed for:   Notice of change of address, phone number and fax number The Firm of Moscarino & Connolly LLP, counsel for respondent Arter & Hadden, LLP
Aug 8 2007	Case ordered on calendar   to be argued on Wednesday, September 5, 2007, at 9:00 a.m., in San Francisco
Aug 17 2007	Application filed to:   divide oral argument time, by counsel for respondents Arter & Hadden et al. requesting 20 minutes for respondents and 10 minutes for amicus curiae Los Angeles County Bar Association.
Aug 21 2007	Order filed   The request of counsel for respondents in the above-referenced cause to allow two counsel to argue on behalf of respondents at oral argument is hereby granted. The request of respondents to allocate to amicus curiae Los Angeles County Bar Association 10 minutes of respondents' 30-minute allotted time for oral argument is granted.
Aug 24 2007	Filed:   Respondent's Arter & Hadden LLP and Eric Dean's notice of additional authorities for Oral Argument of Sept 5, 2007.
Sep 5 2007	Cause argued and submitted
Sep 26 2007	Notice of forthcoming opinion posted
Sep 27 2007	Opinion filed: Judgment reversed   OPINION BY: Werdegar, J. ----- joined by: George, C.J., Kennard, Baxter, Chin , Moreno, Corrigan, JJ.
Oct 30 2007	Remittitur issued (civil case)
Nov 1 2007	Note:   records sent to CA/2
Nov 5 2007	Received:   from CA 2/2 receipt for remittitur.

Briefs
Jun 20 2006	Opening brief on the merits filed
Sep 15 2006	Answer brief on the merits filed
Oct 23 2006	Reply brief filed (case fully briefed)
Nov 28 2006	Amicus curiae brief filed
Dec 11 2006	Amicus curiae brief filed
Dec 11 2006	Amicus curiae brief filed
Dec 19 2006	Response to amicus curiae brief filed

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