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Attorney Admitting Fault Starts Running Of Statute Of Limitations Of Malpractice Action

GoTek Energy Inc. v. SoCal IP Law Group LLP (2016) 3 Cal.App.5th 1240.

Client candor wins the day.
IP Law Firm failed to timely file Client’s patent applications in Japan and Brazil. In July 2012, Law Firm informed Client of its negligence. On November 5, Client wrote to Law Firm and demanded that its claim be tendered to Law firm’s malpractice carrier. On November 7, Law Firm wrote to Client, ending the relationship. On¬†November 8, Client wrote to Law Firm and told Law Firm to transfer its files to Attorney 2. One year and seven days later, Client filed its malpractice action.
HELD: Lawsuit dismissed for violation of the one-year statute of limitations of CCP 340.6. The attorney-client relationship ended by November 8, when Law Firm ended the relationship and Client agreed.
Turning over the client file was merely a ministerial act, and did not toll the statute of limitations.
Nota Bene: This case might have turned out differently if Law Firm had not previously admitted to its negligent, acts because Client could have argued that it could not have reasonably discovered Law firm’s negligence until it received the client file.
Law Firm saved itself by being candid with Client in the first place.