## Facts

- Megadyne Information Systems (Megadyne) obtained a contract with the Orange County Transportation Authority (OCTA) after submitting a bid that relied on information OCTA provided.
- In November 1995, Megadyne learned that OCTA’s information had been misrepresented.
- Under California law, Megadyne had one year from learning of the misrepresentation to file a tort claim against OCTA; that period expired in November 1996.
- In 1997, after the claim window had expired, Megadyne retained the law firm Rosner, Owens & Nunziato to pursue damages against OCTA.
- The firm spent years trying to litigate against OCTA, but the effort was ineffective because the claim was treated as time-barred.
- Megadyne sued the firm and the individual name partners, including Rosner and Nunziato, alleging breach of fiduciary duties based on a theory that the attorneys knew from the start the OCTA litigation was doomed but continued to pursue it and charge fees.
- Megadyne also claimed it was misled and reassured about the status and handling of the case despite the expired limitations period.
- Rosner and Nunziato testified they were not involved in Megadyne’s OCTA matter and that Owens was the only partner who handled the representation.
- Megadyne opposed summary judgment by pointing to circumstantial evidence that Rosner and Nunziato may have discussed Megadyne’s potential claims with Owens and may have been involved in decisions about the representation.
- The trial court granted summary judgment for Rosner and Nunziato, finding no triable issue of fact supporting their personal liability.
- Megadyne appealed.

## Issues

1. Whether the record raised a triable issue of material fact that Rosner and Nunziato personally participated in, approved, or contributed to the firm’s decision to pursue and bill for litigation they allegedly knew was time-barred.
2. Whether Rosner and Nunziato were entitled to summary judgment on the ground that, as LLP partners who claimed noninvolvement, they could not be personally liable for alleged fiduciary breaches connected to the representation.

## Decision

- The Court of Appeal reversed the summary judgment in favor of Rosner and Nunziato.
- The court held that Megadyne presented enough evidence to create a triable issue of fact as to whether Rosner and Nunziato were involved in, or could be personally responsible for, the alleged misconduct tied to continuing the futile litigation and charging fees.
- The case was remanded to the trial court with directions for further proceedings consistent with the appellate ruling.

## Legal Principles

- On summary judgment, a defendant must show entitlement to judgment as a matter of law; if that showing is made, the plaintiff must still be given the benefit of reasonable inferences from the evidence when determining whether a triable issue exists.
- A partner in a registered limited liability partnership is generally protected from vicarious liability for another partner’s malpractice, but LLP status does not bar personal liability for a partner’s own wrongful acts or knowing participation in wrongful conduct.
- Attorneys owe clients fiduciary duties, including duties of honesty and fair dealing; conduct such as continuing to bill for work on a claim known to be barred, while representing that the client’s interests are being protected, can support fiduciary-duty theories if proven.
- Evidence of a partner’s involvement may be shown through circumstantial proof (such as communications or participation in decisions), and disputes about that involvement are ordinarily for the factfinder when reasonable competing inferences can be drawn.

## Conclusion

Because the evidence permitted a reasonable finding that Rosner and Nunziato may have been involved in, or may have shared responsibility for, the firm’s alleged decision to continue litigating and billing for a matter that was time-barred, the Court of Appeal reversed the summary judgment entered in their favor and remanded for further proceedings.


Megadyne Information Systems v. Rosner, Owens & Nunziato, 2002 WL 31112563 (2002) (unpublished)