Laird v. Blacker , 2 Cal. 4th 606 ( 1992 )

Opinion

LUCAS, C. J.

We granted review to determine whether the one-year statute of limitations for attorney malpractice actions under Code of Civil Procedure section 340.6, subdivision (a) (all ftirther statutory references are to this code unless otherwise stated) is tolled during the time the client appeals from the underlying judgment on which the claim of malpractice is based.

Section 340.6 provides that the statute of limitations for legal malpractice commences when the client discovers, or should have discovered, the cause of action. The period is tolled during the times, inter alia, (i) the client “has not sustained actual injury,” (ii) the negligent attorney continues to represent the client, (iii) the attorney willfully conceals facts constituting the negligence, or (iv) the plaintiff is under a disability that “restricts the plaintiff’s ability to commence legal action.”¹ The question before us is: what constitutes “actual injury”—the judgment against plaintiff, or the finality of the appeal therefrom?

We conclude the limitations period of section 340.6 commences when a client suffers an adverse judgment or order of dismissal in the underlying action on which the malpractice action is based. As explained below, our holding conforms to legislative intent, and adopts the present majority view as explained in the most recent cases interpreting the statute at issue here and similar statutes in other states.

I. Background

Plaintiff, a television writer, retained the law firm of Berg & Spire to prosecute a lawsuit against Spelling-Goldberg, a television production company. She alleged that Spelling-Goldberg based its television series “Family” on a script she had submitted, but failed to acknowledge or credit her contribution. After serving the complaint, Berg & Spire failed to pursue the matter, and plaintiff retained attorney Barry Post and the law offices of Samuel Z. Winnikoff (hereafter defendants) to prosecute the same suit.²

On October 20, 1981, the suit was dismissed for lack of prosecution. (§ 583.410.) On December 7,1981, plaintiff discharged defendants and filed a notice of appeal in propria persona because she could not afford legal fees for the appeal. On September 15,1982, she voluntarily dismissed her appeal after settling with Spelling-Goldberg for $1,000. On May 17, 1983, 19 months after her action against Spelling-Goldberg was dismissed and 17 months after Post and Winnikoff were discharged, but only 8 months after she voluntarily dismissed her appeal, plaintiff filed the present malpractice action against Berg & Spire and Barry Post. In February 1986, she amended her complaint to add Sidney G. Blacker and Samuel Z. Winnikoff, also known as Associates.

Plaintiff settled with Berg & Spire for $50,000 and proceeded to trial against defendants. Defendants moved for a nonsuit, asserting the one-year limitation period of section 340.6, subdivision (a) began running when plaintiff’s suit against Spelling-Goldberg was dismissed, regardless of her ensuing appeal.³ Plaintiff asserted her cause of action for legal malpractice did not accrue until she dismissed her appeal on September 15, 1982. Defendants’ motion was denied, and the jury awarded plaintiff approximately $1.7 million in damages. Defendants’ motion for a judgment notwithstanding the verdict was denied. Defendants appealed.

The Court of Appeal reversed and remanded with directions to enter judgment in favor of defendants. It held that under section 340.6, subdivision (a), plaintiff sustained actual injury on December 7, 1981, when she discharged her attorneys after her case was dismissed and judgment was entered against her. Plaintiff appeals that decision, and asks this court to hold the limitations period was tolled until her appeal of right was resolved. We affirm the Court of Appeal decision.

II. Discussion

1. Background

Prior to 1977, the statute of limitations for legal malpractice actions was governed by section 339, subdivision 1, which provides a two-year limitations period for any action based on “a contract, obligation or liability not founded upon an instrument in writing . . . Although section 339, subdivision 1, did not establish an accrual date for legal malpractice actions, courts generally adopted, as the date of accrual, the date on which the malpractice occurred. (Hays v. Ewing (1886) 70 Cal. 127 [11 P. 602] [cause of action for attorney malpractice barred at expiration of two years after neglect occurred].) Recognizing the harshness of a strict occurrence rule, later cases held that a cause of action for legal malpractice accrued when a plaintiff suffered “irremediable damage.” (See, e.g., Heyer v. Flaig (1969) 70 Cal.2d 223, 230 [74 Cal.Rptr. 225, 449 P.2d 161] [statute of limitations for legal malpractice begins to run on date attorney performs last negligent act].) Finally, when the Legislature adopted section 340.6 in 1977, it implicitly rejected the term “irremediable damage” and codified the discovery rule of Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176 [98 Cal.Rptr. 837, 491 P.2d 421] (hereafter Neel), and Budd v. Nixen (1971) 6 Cal.3d 195, 198 [98 Cal.Rptr. 849, 491 P.2d 433] (hereafter Budd). These cases hold that a cause of action for legal malpractice accrues when the client discovers or should discover the facts essential to the malpractice claim, and suffers appreciable and actual harm from the malpractice. Discovery of any appreciable and actual harm from the attorney’s negligent conduct establishes a cause of action and begins the running of the limitations period. (Budd, supra, 6 Cal.3d at p. 201.)

Both Budd, supra, 6 Cal.3d 195, and Neel, supra, 6 Cal.3d 176, addressed the former two-year legal malpractice statute of limitations (§ 339), but did not specifically determine whether actual injury occurs when the client suffers an adverse judgment or after an appeal of right is concluded and the judgment is final. Rather, Neel and Budd suggested the time of discovery is often a question of fact for the jury. Neel, however, explained the holding in Hays v. Ewing, supra, 70 Cal. 127, which interpreted the limitations period of section 339 when the malpractice occurred in the course of litigation. Neel stated that the Hays court “accepted the date of dismissal of the suit—that is, the date upon which the client suffered damage—as the crucial point from which the statute of limitations should run. Indeed, the court refused to adopt as the critical time the date of the affirmance of the dismissal on appeal.” (Neel, supra, 6 Cal.3d at p. 183.)

The Budd court further explained that, “Ordinarily, the client has already suffered damage when he discovers his attorney’s negligence, as occurred in Neel. ... In other cases, the infliction of the damage will alert the client to the attorney’s negligence and thus the statute of limitations will then begin to run on any malpractice action. Only in the unusual case will the client discover his attorney’s negligence without having suffered any consequential damage.” (Budd, supra, 6 Cal.3d at p. 201.)

Budd also noted that, in general, a plaintiff suffers actual damage on entry of adverse judgment. Although the court commented that a losing defendant in the underlying action may suffer harm when he incurs monetary damages (attorneys fees, bond and court costs), this recognition of when monetary damage occurs was not the basis for the Budd decision. The court emphasized that the focus of the statute of limitations for legal malpractice should be on discovery of the fact of damage, not the amount. Indeed, the court observed that the cause of action may arise before the client sustains all or even the greater part of damage. (Budd, supra, 6 Cal.3d at pp. 200-201.)

Nonetheless, Budd’s reference to monetary damage has caused conflict in the courts. Taken at face value, the Budd language supports a conclusion that an appeal does not extend the period of limitations beyond adverse judgment. As the Court of Appeal herein observed, “Where, however, the malpractice occurs in the course of representing a plaintiff, there is no risk of execution and no need to post a bond. There may or may not be attorney’s fees incurred, lost interest or other expenses.”

This uncertainty over when damage occurs has led to conflict in the Courts of Appeal. Some courts rely on Budd to support application of the earlier “irremediable damage” rule that the Legislature rejected when it codified section 340.6. (See, e.g., Southland Mechanical Constructors Corp. v. Nixen (1981) 119 Cal.App.3d 417, 434 [173 Cal.Rptr. 917] [actual damage occurs when plaintiff in underlying action incurs and pays attorney fees, legal costs and expenditures].)

By contrast, several recent cases hold that when the client is a losing plaintiff in the underlying action, an appeal of the dismissal of the action does not affect the date of actual harm under section 340.6 (i.e., adverse judgment and dismissal of the negligent attorney). For example, in Troche v. Daley (1990) 217 Cal.App.3d 403, 410 [266 Cal.Rptr. 34], Attorney Ttirney filed a lawsuit in the federal district court on behalf of his client, Troche, in May 1981. In August 1982, new counsel, Daley, was substituted for Turney. In May 1984, the action was dismissed for failure to timely serve a party. In June 1984, Daley filed a notice of appeal in the underlying action. In August 1984, Troche discharged Daley as her counsel on appeal, and in September 1984, Troche substituted Griffin as her attorney of record. In March 1985, the district court “denied Troche’s request to appeal in forma pauperis because the court was unable to certify the appeal as not frivolous.” (Id. at p. 406.) Two months later, Troche filed a legal malpractice action against Turney and Daley.

Thereafter, in October 1987, Thmey moved for summary judgment asserting that section 340.6 barred the action. The trial court granted the motion after finding that the cause of action arose in May 1984, when the district court dismissed the underlying action for failure to timely serve a party.

The Court of Appeal affirmed on the ground that as a matter of law, the latest time Troche had knowledge of the alleged malpractice was August 1984, when she discharged Daley as her counsel. The court concluded that the damage occurred in May 1984, when the district court dismissed the lawsuit, and that Troche’s attempts to appeal the dismissal of the federal action did not toll the statute because it did not affect the date Troche suffered actual harm. (Troche, supra, 217 Cal.App.2d at p. 411.)

The court relied on Budd, supra, 6 Cal.3d at page 201, and Neel, supra, 6 Cal.3d at page 194, to hold that the client’s discovery of the attorney’s negligence, and his or her incurring damage from that negligence, marks the accrual of a cause of action for malpractice. (Troche, supra, 217 Cal.App.3d at pp. 410-411.) The Troche court observed that as in Neel, supra, and Hays, supra, 70 Cal. 127, a client suffers damage on the date the underlying action is dismissed, and that the conduct of a plaintiff in connection with subsequent proceedings seeking reversal of the dismissal on appeal does not affect the accrual of a cause of action under the statute. (Troche, supra, 217 Cal.App.3d at p. 411; see also Neel, supra, 6 Cal.3d at p. 183.)

The Court of Appeal below followed the Troche reasoning and observed that the “timeliness of a malpractice action should not turn on whether the client happened to be a plaintiff or defendant or happened to appeal .... To attempt to quantify damage or injury pending an appeal necessarily results in a distinction between plaintiffs and defendants and a contest about whether a particular expenditure is sufficient to trigger the limitations period.” As the court observed, the Legislature used the term “actual” to focus on the fact that damage occurred, and eliminated all qualifiers to prevent confusion that would arise by requiring courts to consider the total amount of damages.

Troche, supra, 217 Cal.App.3d 403, has been followed in the most recent cases interpreting section 340.6. In Turley v. Wooldridge (1991) 230 Cal.App.3d 586, 593 [281 Cal.Rptr. 441], a malpractice plaintiff filed suit against her former attorney on the ground his negligence resulted in a marriage dissolution judgment that failed to accord her the full spousal support to which she was entitled. The Court of Appeal held the plaintiff’s malpractice action accrued no later than the date of adverse judgment, and refused to toll the statute of limitations for six months after judgment was entered simply because the plaintiff had the right during that time to challenge the judgment under section 473.

Finally, in Worton v. Worton (1991) 234 Cal.App.3d 1638 [286 Cal.Rptr. 410], plaintiff wife sued her former husband for fraud and conversion, and her former attorney for legal malpractice, claiming that her former attorney negligently failed to discover excess assets hidden by her ex-husband. The court held the malpractice action was barred under section 340.6 because the wife’s malpractice lawsuit was filed more than one year after entry of the dissolution judgment that failed to divide the excess assets.

Justice Lillie relied on Budd, supra, 6 Cal.3d 195, and Troche, supra, 217 Cal.App.3d 403, to hold that a “client sustains actual injury when, as a result of the attorney’s negligence, a judgment is entered against the client.” (Worton, supra, 234 Cal.App.3d at p. 1651.) The court rejected the wife’s claim that the availability of an appeal should have tolled the limitations period, observing that the “availability of an appeal from a judgment in a civil action does not make ‘remediable’ the harm the client sustained upon entry of the judgment for purposes of tolling the statute of limitation for legal malpractice. [Citation.]” (Id. at pp. 1651-1652.) As the Worton court observed, tolling the statute during an appeal would place “the statute of limitations for legal malpractice ... in the power of the client who could cause the statute to be tolled indefinitely” and, hence, thwart ‘the purpose of the statute of limitations which is ‘to require “diligent prosecution of known claims thereby providing necessary finality and predictability in legal affairs, and ensuring that claims will be resolved while the evidence bearing on the issues is reasonably available and fresh.” [Citations.]’ ” (Id. at p. 1652.)

The foregoing cases recognize that the focus of section 340.6 is on discovery of the malpractice and actual injury, not success on appeal or proof of the total amount of monetary damages suffered by the former client. For example, in order to prosecute a malpractice action, the former client as plaintiff must show a breach of the attorney’s duty of care and that the breach caused the plaintiff harm. To establish this harm or damage, the client must prove that careful management of the underlying action would have resulted in a favorable judgment and the collection thereof, or, if the client were defending, that the proper handling of the case would have resulted in a defense verdict.

We disagree with plaintiff that actual injury should be defined in terms of monetary amount and that a successful appeal negates the client’s ability to file a malpractice action. To the contrary, although appellate review may correct judicial error, and thus reduce the client’s damages, an appeal does not necessarily exonerate the attorney, nor does it extinguish the client’s action against him for negligence in the conduct of trial. (See also 2 Mallen & Smith, Legal Malpractice (3d ed. 1989) § 18.11, p. 111.)

Thus, even if the former client loses the underlying action because of the attorney’s malpractice, success on appeal does not negate an action for legal malpractice. In essence, plaintiff asks us to ignore the fact that the focus of a legal malpractice action (when litigation is involved) is the attorney’s conduct in the underlying case. As Mallen and Smith observe, when an appeal is taken from an adverse judgment, “an injury does not disappear or become suspended because a more final adjudication of the result is sought.” (2 Mallen & Smith, supra, at p. 111.)

Under the foregoing authority, we hold that under section 340.6, the statute of limitations for legal malpractice actions commences on entry of adverse judgment or final order of dismissal. Plaintiff herein, therefore, sustained actual injury when the trial court dismissed her underlying action and she was compelled to incur legal costs and expenditures in pursuing an appeal. Her case also lost considerable settlement value and potential interest on any monetary award that would have been awarded absent the malpractice, once the action was dismissed.

Nonetheless, plaintiff asserts that she did not suffer actual injury until her appeal of right was dismissed. Until that point, plaintiff maintains, her damages were only speculative. She contends that several Court of Appeal cases support her assertion that the negligence caused by the malpractice must be “irremediable” before the statute of limitations under section 340.6 will begin to run. As noted above, plaintiff proposes a tolling rule that would extend commencement of the statute of limitations up to the point that an appeal of right is dismissed, without addressing whether accrual should be tolled until resolution of further discretionary review.

Her position is unpersuasive. Plaintiff confuses the distinction between the fact and knowledge of damage, and the amount of damage. (Budd, supra, 6 Cal.3d at pp. 200-201. As defendants observe, there are no California cases holding that a cause of action for legal malpractice is tolled on filing an appeal from the underlying judgment. Although there are several cases reasoning that a client must suffer “irremediable injury” before a claim for malpractice can be filed, as we explain, none holds that the statute of limitations is tolled simply because the client pursues an appeal.

For example, plaintiff relies on Heyer v. Flaig, supra, 70 Cal.2d 223, which holds that when an attorney is accused of malpractice in drafting a will for failing to follow the testamentary directives of a client, a cause of action for malpractice accrues on the date of the testatrix’s death. Only then do the beneficiaries suffer “irremediable injury.” (Id. at p. 225.) Our holding was based on the rationale that an attorney owes the beneficiaries a continuing fiduciary duty throughout the representation of the client.

Next, in Bell v. Hummel (1982) 136 Cal.App.3d 1009 [186 Cal.Rptr. 688], the defendant attorney was negligent in failing to assert a cause of action on his client’s behalf against a doctor for medical malpractice. The client conceded that he discovered the malpractice more than a year before he filed his action against the attorney. He had hired new counsel who sought to avoid the statute of limitations bar by joining tine client’s malpractice claim with client’s wife’s claim for medical malpractice that was pending before the court. The court concluded that the client’s actual injury, for purposes of section 340.6, occurred when the trial court denied his motion to amend the complaint to add his name. The court held: “[T]he impact and accrual of the damages [did not occur until] the new attorney failed in his attempt to rectify the previous mistake. . . . Until the court denied [husband] the right to join his wife’s complaint as a coplaintiff in order to assert his claims arising from the alleged medical malpractice, his damage had not fully accrued. It was not until then that his claims were lost and the full impact of the wrongful acts settled leaving damage that was for all practical purposes irremediable.” (Bell v. Hummel, supra, at pp. 1016-1017.) The court held that appreciable harm did not occur until the attorney’s error became irremediable, a conclusion impliedly rejected by the Legislature when it adopted section 340.6.

In Southland Mechanical Constructors Corp., supra, 119 Cal.App.3d 417, the Court of Appeal accepted the defendant attorney’s contention that the malpractice action filed against him accrued on the date the plaintiff’s right to appeal from an adverse agency decision expired. The court rejected the plaintiff’s contention that no injury resulted from the dismissal of the agency proceeding as long as tort litigation seeking identical relief was still pending. As the Court of Appeal herein observed, the Southland court assumed erroneously that the term “irremediable,” as taken from the rule of Heyer, supra, 70 Cal.2d at page 230, must be read into the term “actual” in section 340.6, subdivision (a)(1).

In Robinson v. McGinn (1987) 195 Cal.App.3d 66 [240 Cal.Rptr. 423], a police officer was injured in the line of duty. He claimed his attorney’s negligent representation in his personal injury claim caused him to lose his job and his disability pension. In the subsequent malpractice action, the court had to determine whether the statute of limitations accrued when he was denied reinstatement and pension benefits, or when the client lost his administrative appeal. The Court of Appeal held the statute was tolled until the city made its final administrative adjudication, reasoning that no irremediable harm had been suffered by the officer until the attorney’s error could no longer be remedied.

Turley v. Wooldridge, supra, 230 Cal.App.3d 586, analyzed the Bell and Robinson decisions, and asserted that those cases simply misused the term “irremediable.” As the Turley court observed, “while the cases use the term ‘irremediable,’ they obviously do not mean absolutely irremediable.” For example, “Bell’s cause of action accrued when the trial court denied his motion to join his claim with his wife’s, not when that decision was immune from challenge by way of motion for reconsideration or appeal. Finally, Robinson’s claim accrued when he exhausted his administrative remedies without regard to potential judicial remedies.” (Id. at p. 592; see also Goebel v. Lauderdale (1989) 214 Cal.App.3d 1502 [263 Cal.Rptr. 275] [cause of action for attorney malpractice accrues when client is convicted of crime].)

The Court of Appeal herein also criticized the above cases for relying on the “irremediable damage” rule rejected by the Legislature when it adopted section 340.6. The court stated, “According to Robinson, the rule we adopt today will ‘further burden our existing overly crowded court calendars with the filing of potentially meritless lawsuits by [clients] waiting to learn whether they indeed will be suffering irremediable harm.’ First, Robinson mistakenly assumes the continuing viability of ‘irremediable.’ Second, Robinson also implicitly assumes a volume of cases in this category that is not apparent from the number of published opinions on this point (or from any other source available to us). Third, Robinson ignores the fact that the same attorney may represent the client on the appeal, thereby tolling the statute for a different reason. (§ 340.6, subd. (a)(2).) Fourth, Robinson fails to consider the possibility that an attorney might stipulate to extend the period of limitations until all appeals are concluded. Fifth, Robinson ignores the fact that since most appeals result in affirmances, deferral of the malpractice action is a postponement, not an avoidance.” Based on the above, we conclude that to the extent Robinson, supra, 195 Cal.App.3d 66; Bell, supra, 136 Cal.App.3d 1009; Southland, supra, 119 Cal.App.3d 417, and Heyer, supra, 70 Cal.2d 223, conflict with our decision in this case, they are disapproved.

Finally, plaintiff relies on In re Blythe (1893) 99 Cal. 472 [34 P. 108], and Chambers v. Farnham (1918) 39 Cal.App. 17 [179 P. 423], to contend that before final resolution of the underlying case, a client may not introduce into evidence the adverse trial court judgment as evidence of the attorney’s negligence. Both cases, however, are inapposite. They hold that in order for a separate judgment to be admissible in evidence in a new cause for the purpose of proving facts therein recited, the judgment must be a final judgment in the cause. (Blythe, supra, 99 Cal. at p. 475; Chambers, supra, 39 Cal.App. at pp. 20-21.) These cases simply reiterate the rule of section 1049, which provides, “An action is deemed to be pending from the time of its commencement until its final determination upon appeal, or until the time for appeal has passed, unless the judgment is sooner satisfied.”

As defendants observe, plaintiff’s reliance on Blythe, supra, 99 Cal. 472, and Chambers, supra, 39 Cal.App. 17, is misplaced. The issue before us is what constitutes “actual injury” for purposes of section 340.6, not what constitutes finality of judgment. Moreover, as the Chambers court observed, section 1049 “is limited in its application by the exception that such a judgment may be received in evidence in proof of facts which are merely incidentally or collaterally involved, when such facts are not directly in issue.” (39 Cal.App. at p. 21.) The present matter clearly falls within such exception, for the fact of adverse judgment is provable notwithstanding the filing of a subsequent appeal.

2. Legislative History

Section 340.6, subdivision (a), states that “in no event” shall the prescriptive period be tolled except under those circumstances specified in the statute. liras, the Legislature expressly intended to disallow tolling under any circumstances not enumerated in the statute.

Section 340.6 and its legislative history make clear that once a client has been injured by an adverse judgment, the limitations period commences and is not tolled by filing an appeal absent continuous representation by the trial attorney. (See 340.6, subd. (a)(2).) This “continuous representation” rule was adopted in order to “avoid the disruption of an attorney-client relationship by a lawsuit while 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." (Sen. Com. on Judiciary, 2d reading analysis of Assem. Bill No. 298 (1977-1978 Reg. Sess.) as amended May 17, 1977.) Thus, the Legislature, by creating a limited exception for cases involving continuous representation, clearly intended the limitations period should not be extended beyond final judgment when continuous representation was not an issue.

The policy behind the limited tolling periods in the statute is clear. If we nonetheless hold that the statute is tolled pending an appeal, we allow clients, with knowledge that they have suffered actual injury, unilaterally to control the commencement of the statute of limitations and hence undermine the legislative goal of resolving cases while the evidence is fresh, witnesses are available, and memories have not faded. Accordingly, we decline to adopt plaintiff’s position.

3. Decisions in Other States

As defendants observe, our decision today is further supported by the majority of jurisdictions with statutes substantially identical to our own. (See, e.g., Dearborn Animal Clinic P.A. v. Wilson (1991) 248 Kan. 257 [806 P.2d 997, 1006] [where client required to initiate legal action because attorney negligently drafted sales contract, malpractice action accrues “even though the underlying action may not have been finally resolved”]; Braud v. New England Ins. Co. (La. 1991) 576 So.2d 466, 469-470 [client suffered “appreciable and actual harm” when federal action filed to annul prior judgment favorable to client because of alleged errors by client’s attorney; malpractice action not tolled while federal action pending]; Belden v. Emmerman (1990) 203 Ill.App.3d 265, 148 Ill.Dec. 583 [560 N.E.2d 1180, 1183] [rejecting argument that client not harmed until appeal in underlying case resolved: “[T]he only difference between affirmance and reversal is the amount of damage sustained.”]; Basinger v. Sullivan (Ind.Ct.App. 1989) 540 N.E.2d 91, 94 [malpractice action accrued when clients learned attorney failed to file suit prior to expiration of statute of limitations, even though alternative avenues of relief not yet exhausted]; Zimmie v. Calfee, Halter & Griswold (1989) 43 Ohio St.3d 54 [538 N.E.2d 398] [malpractice action accrued when trial court invalidated prenuptial agreement and was not tolled during appeal]; Wettanen v. Cowper (Alaska 1988) 749 P.2d 362, 365 [malpractice action accrued upon entry of adverse interlocutory judgment and was not tolled pending final judgment]; Hayden v. Green (1988) 431 Mich. 878 [429 N.W.2d 604] [client suffered “appreciable and identifiable harm” when trial court dismissed his suit; malpractice cause of action not tolled during appeal]; Jankowski v. Taylor, Bishop & Lee (1980) 246 Ga. 804 [273 S.E.2d 16] [client harmed by dismissal of suit even though action could be refiled].)

Plaintiff, in contrast, relies on out-of-state cases interpreting legal malpractice statutes of limitations that do not have the “continuous representation” exception codified in section 340.6, subdivision (a)(2). Thus, these cases are inapposite. The tolling rule plaintiff advances is necessary in such jurisdictions because without it the statute of limitations would run on the client’s malpractice action even though trial counsel continued to represent plaintiff on appeal. (See, e.g., Neylan v. Moser (Iowa 1987) 400 N.W.2d 538, 542; Amfac Distribution Corp. v. Millar (1983) 138 Ariz. 155 [673 P.2d 795]; Bonanno v. Potthoff (N.D.Ill. 1981) 527 ESupp. 561; Woodruff v. Tomlin (6th Cir. 1975) 511 F.2d 1019.)

Finally, no case in any jurisdiction supports tolling the statute until an appeal of right is resolved, without waiting until review is exhausted on final judgment. Indeed, our prior cases would reject this position outright. (See, e.g., Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1079 [282 Cal.Rptr. 445, 811 P.2d 737].) In Lambert, the insured’s cause of action against his title insurer for refusal to defend under section 339 was tolled until final judgment in the underlying third party action. Equitable tolling was based on the insurer’s continuing duty to defend until final judgment, and on the fact that “[t]he Legislature cannot have anticipated the need to provide for equitable tolling during the time of the continuing duty.” (Ibid.)

4. Retroactivity

Plaintiff requests that if we conclude the limitations period of section 340.6 commences on adverse judgment or dismissal of the underlying action, our holding should not apply to her because it represents a departure from the established law she relied on in delaying the filing of her case, namely, Heyer v. Flaig, supra, 70 Cal.2d 223.

We reject plaintiff’s request. The general rule is that judicial decisions are given retroactive effect. (Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973, 978 [258 Cal.Rptr. 592, 772 P.2d 1059].) Departure from that rule is limited to those narrow circumstances in which considerations of fairness and public policy preclude retroactivity. In sum, “A court may decline to follow the standard rule when retroactive application of a decision would raise substantial concerns about the effects of the new rule on the general administration of justice, or would unfairly undermine the reasonable reliance of parties on the previously existing state of the law. In other words, courts have looked to the ‘hardships’ imposed on parties by full retroactivity, permitting an exception only when the circumstances of a case draw it apart from the usual run of cases.” (Id. at p. 983.)

With this concept in mind, we reject plaintiff’s claim. As explained above, our holding is based on the Legislature’s rejection of the “irremediable damage” rule of Heyer v. Flaig, supra, 70 Cal.2d 223, and its subsequent adoption of the rule of Budd, supra, 6 Cal.3d 195, and Neel, supra, 6 Cal.3d 176. The majority of cases recently interpreting section 340.6 have also followed the Budd and Neel reasoning in holding that the statute of limitations accrues on final judgment. (See, e.g., Worton, supra, 234 Cal.App.3d 1638, 1651.) Our application of these cases to the facts before us does not, therefore, represent a departure from generally accepted principles. We conclude that there is no compelling reason in this case to depart from the general rule of retroactive application of judicial decisions. (See Newman v. Emerson Radio Corp., supra, 48 Cal.3d at p. 993.)

III. Conclusion

We cannot rewrite section 340.6 to adopt the rule advocated by plaintiff. The statute is clear on its face and the Legislature has provided for tolling in specific enumerated circumstances, none of which apply here. As noted above, the Legislature intended that “in no event” should the limitations period be tolled except as stated in the statute. Accordingly, the Court of Appeal judgment is affirmed.

Panelli, J., Kennard, J., Arabian, J., Baxter, J., and George, J., concurred.

1 Section 340.6 in its entirety provides:

“(a) An action against an attorney for a wrongful act or omission, other than for actual fraud, 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 that the period shall be tolled during the time that any of the following exist:

“(1) The plaintiff has not sustained actual injury;

“(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred;

“(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this subdivision shall toll only the four-year limitation; and

“(4) The plaintiff is under a legal or physical disability which restricts the plaintiff’s ability to commence legal action.

“(b) In an action based upon an instrument in writing, the effective date of which depends upon some act or event of the future, the period of limitations provided for by this section shall commence to mn upon the occurrence of such act or event.”

2 Defendant Sidney G. Blacker represents the estate of Samuel Winnikoff. Plaintiff sued Blacker as administrator of Winnikoff’s law firm.

3 As noted above, a separate provision tolls the limitation period until the attorney accused of malpractice no longer represents the plaintiff in the underlying action. (§ 340.6, subd. (a)(2).) Defendants agree that the earliest date the statute could have begun running was December 7, 1981, after plaintiff’s suit was dismissed and she discharged them.