Budd v. Nixen

In Budd v. Nixen (1971) 6 Cal.3d 195, the Supreme Court explained: "If the allegedly negligent conduct does not cause damage, it generates no cause of action in tort. The mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm -- not yet realized -- does not suffice to create a cause of action for negligence. Hence, until the client suffers appreciable harm as a consequence of his attorney's negligence, the client cannot establish a cause of action for malpractice. Fn. omitted. Prosser states the proposition succinctly, 'It follows that the statute of limitations does not begin to run against a negligence action until some damage has occurred.' (Prosser, Law of Torts (4th ed. 1971) 30 at p. 144.) "The cause of action arises, however, before the client sustains all, or even the greater part, of the damages occasioned by his attorney's negligence. Any appreciable and actual harm flowing from the attorney's negligent conduct establishes a cause of action upon which the client may sue. "Indeed, once having discovered his attorney's negligence and having suffered some damage, the client must institute his action within the time prescribed in the statute of limitations or he will be barred from thereafter complaining of his attorney's conduct. Ordinarily, the client has already suffered damage when he discovers his attorney's negligence, as occurred in Neel v. Magana, Olney, Levy, Cathcart & Gelfand, ante, pages 183-187 . . . 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." (6 Cal.3d pp. 200-201.) In Budd v. Nixen, supra, Budd "suffered damage when . . . he was compelled to 'incur and pay attorney's fees and legal costs'" (6 Cal.3d p. 201) to correct the wrong accomplished by the lawyer's negligent acts. The Supreme Court reversed a summary judgment, concluding: "We hold that a cause of action for legal malpractice does not accrue until the client suffers damage and that the determination of that date raises an issue of fact." ( Id., at p. 198.) The Budd case was governed by the two-year statute of limitation contained in Code of Civil Procedure section 339. The Legislature later adopted section 340.6 and changed the "appreciable and actual harm" rule but slightly. A four-year limitation period was tolled if the client "has not sustained actual injury."