Haight Brown & Bonesteel Professional Liability News

Haight Brown & Bonesteel has been dedicated to defending professionals throughout the State of California for over 40 years. We are pleased to provide you with our latest issue of Professional Liability News, a regular publication of Haight Brown & Bonesteel.

He’s Safe! The Solution is in the Research

A few years back, a personal injury attorney arranged to meet with me about a potential malpractice lawsuit against him. He had been retained to represent a fault-free 17-year-old who suffered a broken foot when he was hit by a car while in a crosswalk. The car was driven by a public employee who was performing job duties for his employer at the time.

As is customary, I asked that the attorney bring with him any documents that pertained to the potential malpractice action. When he arrived, he had a very small folder with everything in it, which wasn’t much. It included a retainer letter, some investigation materials, a traffic collision report, and other miscellaneous items.

After exchanging pleasantries, we got to the substance of what this meeting was about. The attorney explained that it had been a little more than six months since the accident, and he figured that he had until two years following the accident to sue. He had done some investigation, began to obtain his client’s medical records, and sent off a letter to the employer’s insurance carrier. A few weeks later he received the carrier’s response which included a reference to the Government Claims Act (“the Act”). The attorney sheepishly admitted that he did not know about the Act until this letter. He then read up on it (very little), and concluded that he committed malpractice.

My first statement of any substance was “I’m assuming that you didn’t present a claim.” He said “look, John, I didn’t even know about this procedure. I want to do what I can to get this case resolved so I can sleep at night.” My first thought was “can this be remedied?”

“The Act” (Government Code §§ 810-996.6) established uniform procedures for claims against public entities (Government Code §§ 900-935.4) and for actions against public entities and public employees (Government Code §§ 940-951). The gravamen of the Act is that prior to suing a public entity or its employee who was acting in the scope of his employment with the public entity you must present a written claim to the public entity within six months (as was the case here—sometimes it allows for one year) of the accrual of the claim. Compliance with this procedure, when it applies, or the existence of circumstances excusing compliance, must be alleged by the plaintiff to state a cause of action.

The Act seems very clear at first glance—present a written claim within six months of the accrual of the claim or you’re out. However, like many things in our profession, if you just keep reading and researching, a simple solution might appear.

The Act provides an “out” that is similar to Code of Civil Procedure § 473 in what is informally known as “late claim relief.” Late claim relief only applies to claims that are to be brought within six months of accrual. If a claimant fails to timely present a claim, he may apply to the public entity for late claim relief within one year of the claim’s accrual on the grounds that he failed to timely present a claim due to mistake, inadvertence, surprise, excusable neglect, minority, physical or mental incapacity, or death. Government Code § 911.6(b). The board then has 45 days to grant or deny late claim relief. Government Code § 911.6(a). What is interesting about late claim relief is that when the claimant is a minor, the relief is mandatory.

But what happens when the public entity denies the mandatory late claim relief? Government Code § 945.4 answers this question. After a public entity denies late claim relief, the applicant may petition the Court within six months after the application for late claim relief has been denied. The petition must contain evidence that the application for late claim relief was denied, the reason why a claim was not presented to begin with, and all of the information that must ordinarily be supplied when presenting a claim under Government Code § 910.

The solution for my client appeared in this late claim provision and the fact that his client was a minor. The attorney was on his way to fix what he thought was an insurmountable error. He called me a while later to give me the good news that the Court had granted his petition for relief for his failure to present a timely claim. I said, “that’s great. Just don’t forget to file your complaint now within 30 days or you really will have a problem.”

“In order to succeed you must fail, so that you know what not to do the next time.” ~Anthony J. D’Angelo, The College Blue Book


An Accountant Does Not Have A Duty To The Employees Of A Client/Company To Verify Information Provided By The Client For Issuance Of W-2s.

On August 25, 2010, the Court of Appeal affirmed a trial court’s order sustaining the defendant-accountant’s demurrer without leave to amend based upon a finding that the accountant who was retained to prepare year-end documents relating to employee earnings and taxes did not have a duty to verify the information provided by the client. Giacometti v. Aulla, LLC (2010) 187 Cal.App.4th 1133. In Giacometti, the plaintiffs, who were employees of a restaurant, sued the restaurant as well as the restaurant’s accounting firm, alleging that the accountants had negligently prepared W-2 forms by failing to verify the information provided by the restaurant and thereby overstating the amount of money each employee actually received in tips. The accounting firm, Gumbiner Savett, Inc., demurred to the complaint arguing they had no duty to the employees to investigate the accuracy of the information provided by their client before preparing the W-2s. The appellate court analyzed the three factors established in the leading case of Biakanja v. Irving (1958) 49 Cal.2d 647 and the third party beneficiary cases before reaching its conclusion that there was no duty owed by the accountants. It was clear from the facts presented to the trial court that the restaurant was hired not for the purpose of benefiting the employees, but to fulfill its legal obligation to provide information to the IRS. It was also clear that there were no allegations that the accounting firm inflated the numbers, was employed to verify the numbers provided by the restaurant or negligently prepared the W-2 forms. The Court concluded that to hold that the accounting firm had a duty to question the reliability of their client’s financial information when they were not hired for that purpose would be outside the scope of its retention.

Haight Brown & Bonesteel Named “Best Law Firm” by U.S. News – Best Lawyers, 1st Tier Ranking – Legal Malpractice Law.

Haight Brown & Bonesteel LLP is here to assist you with your malpractice needs. In many instances this will happen only after you have been sued. We are also here to assist you when you think you might have a problem. An early consultation might provide you with a solution to continue representing your client and to approach your case or issue in a constructive way to get back on track.

This document in intended to provide you with general information about recent professional liability related cases and issues. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.

September 2010