We all know the general statute of limitations for suing attorneys is within after one year of discovering the facts constituting the wrongful act or within one year of when the client should have discovered the facts constituting the wrongful act through the use of reasonable diligence but never more than four years from the date of the wrongful act or omission. See Code Civ. Proc. § 437c.

The limitations period is tolled if, among other reasons, the plaintiff has not sustained an actual injury or if the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred. See Code Civ. Proc. § 340.6.

In the scenario discussed today, the attorney forgets the deadline to file an objection to a bogus lien. Because of the missed deadline, the client hires a different firm and ultimately agrees to accept $1.6 million less than it would otherwise have received.

The problem is even though the client knew his former attorney missed the deadline to object to the bogus lien, he waited over a year, until after the $1.6 million hit, to file a malpractice action. So is the malpractice action timely since the client had not sustained an actual injury?

The California Court of appeals said it was untimely because what matters is “discovery of the fact of damage, not the amount.” (Laird v. Blacker (1992) 2 Cal.4th 606, 612 (Laird);

As long as that amount is more than nominal, actual injury exists even if the client has yet to sustain all, or even the greater part, of the damages occasioned by his attorney’s negligence. Even if the client will encounter difficulty in proving damages and even if that damage might be mitigated or entirely eliminated in the future. This is because an existing injury is not contingent or speculative simply because future events may affect its permanency. However, actual injury does not exist where the attorney’s negligence may have created only the potential for future harm.

The Court found two reasons for the existence of an actual injury. First, the loss or diminution of a right or remedy constitutes injury or damage. In this case, the right to challenge the lien was the loss of a right. Second, the absence of the ability to challenge the lien substantially weakened plaintiff’s negotiating position in the ensuing mediation, and the loss of considerable settlement value also constitutes an actual loss.

The full case can be found here.