Judge: Alison Mackenzie, Case: 20STCV15663, Date: 2023-11-30 Tentative Ruling
Case Number: 20STCV15663 Hearing Date: January 31, 2024 Dept: 55
NATURE OF PROCEEDINGS: Defendants’ Amended Motion for Summary
Judgment, or in the Alternative, Summary Adjudication.
The motion for summary judgment or, in the
alternative, summary adjudication is denied.
Background
Plaintiff Rolan Feld filed this legal malpractice case
against Defendants David A. Erikson and Erikson Law Group based on Defendants’
representation of Plaintiff in an underlying fee dispute arbitration brought by
Plaintiff’s former attorney Helen Yu. That arbitration ended with a fee award of
more than one million dollars in Yu’s favor. In the post-judgment litigation
following the arbitration award, the court ultimately ordered a sheriff’s sale
of two real properties owned by Plaintiff to satisfy the judgment. The causes
of action in Plaintiff’s Complaint are: 1) Professional Malpractice; and 2)
Breaches of Fiduciary Duties.
Defendants move for summary judgment, or, in the
alternative, summary adjudication of Plaintiff’s two causes of action.
Plaintiff opposes the motion.
Evidentiary Rulings
The Court overrules Defendants' evidentiary objections
filed with the reply.
Requests for Judicial Notice
Judicial notice may be taken of “[r]ecords of (1) any
court of this state or (2) any court of record of the United States or of any
state of the United States.” (Evid. Code § 452(d).) Evidence Code § 452 also
provides that judicial notice may be taken of “[o]fficial acts of the
legislative, executive, and judicial departments of the United States and of
any state of the United States,” as well “[f]acts and propositions that are not
reasonably subject to dispute and are capable of immediate and accurate determination
by resort to sources of reasonably indisputable accuracy.” (Evid. Code §§
452(c), (h); see Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182,
194 (A recorded deed is an official act of the executive branch, of which this
court may take judicial notice).).)
Defendants request that the Court take judicial notice
of an abstract of judgment and court records from the arbitration award
enforcement action. Plaintiff requests that the Court take judicial notice of recorded
grant deeds, notice of sheriff’s sale, recorded sheriff’s deeds, deed of trust,
documents from the Secretary of State, and court records from the arbitration
enforcement action. The requests are granted in their entirety. Giles v.
Horn (2002) 100 Cal. App. 4th 206, 228 (failure to object to requests
for judicial notice constitutes a waiver of the objection).
Legal Standard
In moving for summary judgment or summary adjudication,
a “defendant . . . has met his or her burden of showing that a cause of action
has no merit if the party has shown that one or more elements of the cause of
action, even if not separately pleaded, cannot be established, or that there is
a complete defense to the cause of action.” (CCP § 437c(p)(2).) Once the
defendant has satisfied that burden, the burden shifts to the plaintiff “to
show, by responsive separate statement and admissible evidence, that triable
issues of fact exist.” Ostayan v.
Serrano Reconveyance Co. (2000) 77 Cal. App. 4th 1411, 1418, disapproved
on other grounds by Black Sky Cap., LLC v. Cobb (2019) 7 Cal. 5th
156, 165; see also CCP § 437c(p)(2). The plaintiff must present
substantial evidence to avoid summary judgment.
Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 163. “In some instances…, ‘evidence may be so
lacking in probative value that it fails to raise any triable issue.’” Whitmire v. Ingersoll-Rand Co. (2010)
184 Cal.App.4th 1078, 1083-84.
Analysis
Legal Malpractice Claim
Plaintiff’s legal malpractice claim is based on
Defendant Erikson’s conduct during the Yu arbitration. Plaintiff alleges in his
Complaint that Defendant Erikson breached his professional duty by failing to
question Yu or her witnesses about the fees Plaintiff owed them, failing to
join another group of Plaintiff’s former counsel in the arbitration, and failing
to protect Feld from the judicial sale of his real properties to satisfy the arbitration
judgment. (Compl., ¶¶ 26, 28, 29-34.) The elements of a claim for attorney
malpractice are:
Landmark Screens, LLC v. Morgan, Lewis
& Bockius, LLP (2010) 183 Cal.App.4th 238, 247-48. Whether
an attorney breached a duty is ordinarily a question of fact and can only be
resolved as a matter of law in “rare” cases where there can be no reasonable
doubt as to the attorney’s breach. Dawson v. Toledano (2003) 109
Cal.App.4th 387, 396-97. Causation of
damages is determined by case-within-a-case approach, involving a decision as
to what should have been the result in the underlying matter, and questions
about what would have happened had lawyers acted otherwise are issues of fact
unless reasonable minds could not differ as to the legal effect of the
evidence. Ambriz v. Kelegian (2007)
146 Cal.App.4th 1519, 1531-32.
Defendants contend that Plaintiff cannot establish the
causation element in his legal malpractice claim. Defendants claim Plaintiff cannot
not show that Defendant Erikson’s alleged breach caused the injury, i.e., Plaintiff’s
loss in the arbitration and the judicial sale of Plaintiff’s properties. Defendants
present evidence that Yu testified at the arbitration about the work she
performed for Plaintiff, including number of hours billed and her hourly rate
and that of others in her office. (Defs. Sep. Stmt. Nos. 9-12.) Defendant
Erikson cross-examined Yu for two days (Id., No. 14.) Plaintiff provided
conflicting testimony at the arbitration regarding the work Yu provided and her
entitlement to fees, which the arbitrator cited in his award. (Id., No. 20-24.)
Plaintiff’s other former counsel was not part of the fee dispute arbitration
with Yu because that firm was not a signatory to the Yu fee agreement. (Id.,
No. 31.) And the court issued the order to sell the real properties after Yu met
the statutory requirements for obtaining such relief. (Id., Nos. 32-34,
36-47.) Defendants also cite Plaintiff’s recent deposition testimony in which Plaintiff
stated that he did not think Defendant Erikson did a “bad job,” but that he was
“disappointed in the outcome that we lost” and could not come up with an
example of alleged malpractice. (Erikson Suppl. Decl, ¶ 3.) The Court notes
that Defendants filed this supplemental declaration after the motion, however,
the Court considers it because Defendants had not taken the deposition at the
time of filing, and in any event, Plaintiff does not object. The Court notes
this evidence is the same as what Defendants filed with their reply.
This evidence, taken alone, is enough to negate
causation and shift the burden. But the Court concludes that Plaintiff has
adequately shown that triable issues of fact exist on both the duty and
causation elements of his legal malpractice claim. Plaintiff presents evidence that
Defendant Erikson did not follow up on testimony by Yu about specific billing
entries she made or didn’t make, and he had not reviewed the case law submitted
by opposing counsel in the arbitration. (Plaintiff Sep Stmt. Nos. 10, 12, 15.) Plaintiff
also presents evidence from an expert witness that Defendant Erikson’s conduct
at the arbitration (specifically his questioning of Yu and preparation for the
arbitration) fell below the standard of care for attorneys. (Id., No.
17.)
With respect to the post-judgment enforcement action, Plaintiff
testified that he never received advice from Defendant Erikson that the court
could appoint a receiver just to manage the sale of Plaintiff’s real properties
or that other remedies existed that could increase the sale price of the
properties. (Id. Nos. 2-4.) Plaintiff presents the declaration of an
expert witness opining that had Defendant Erikson sought receivership of
Plaintiff’s assets, the properties would have sold at much higher prices. (Id.,
No. 7 citing Singer Decl., filed 1/3/24 (receivership would have resulted in
condominium sales at substantially higher prices). Plaintiff presented evidence
that the properties sold for more than a million dollars less than the FMV,
resulting in a financial loss for Plaintiff. (Id., No. 6.) Plaintiff also
presents the declaration of an expert witness stating that the duty of care for
an attorney representing a judgment debtor includes fully counsel the debtor on
the alternative remedies and fully describe a sheriff’s sale process, including
all the risks and explaining alternative scenarios. (Id., No. 8.)
Defendants rely on Plaintiff’s deposition testimony
that Defendant Erikson did not do a “bad job,” but that Plaintiff was disappointed
in the outcome. This testimony is equivocal enough to permit consideration of
Plaintiff’s other evidence in the Court’s analysis that triable issues of fact
exist. Consumer Cause v. Smilecare (2001) 91 Cal. App. 4th 454, 473 (“A
summary judgment should not be based on tacit admissions or fragmentary and
equivocal concessions, which are contradicted by other credible evidence…. To
protect the interests of the party opposing summary judgment, its ‘admissions …
should be … careful[ly] examin[ed] in light of the entire record.” (internal
quotation omitted). As for Defendants’ reference to judgmental immunity, this
concept boils down to Defendants’ ability to argue at trial that there were unsettled
areas of law that were the subject of Defendant Erikson’s advice, and he gave
the advice based on his reasonable research into the relevant legal principles.
See, e.g., Blanks v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336, 378-79
(noting that the concept relieves an attorney from liability “if there was an ‘honest
error in judgment concerning a doubtful or debatable point of law’”) (internal
citation omitted). The concept does not apply here when Defendants
have not provided evidence regarding any unsettled points of law at issue in
the arbitration or enforcement action.
Defendants also dispute the merits of Plaintiff’s
argument that he could have stipulated with Yu for the appointment of a
receiver to sell Plaintiff’s properties rather than having the properties sold
at a sheriff’s sale. Defendant cites case law going against the debtor’s moving
to have a receiver appointed. This is different, however, from Plaintiff’s argument
that Plaintiff could have stipulated to the creditor’s receivership motion to
thereby obtain the advantage of a receiver. (Opp., 9:15-16:l). Further, the Court cannot adjudicate disputes,
such as whether the judgment creditor would have stipulated or not in some
unknown form. (Rep., 7:6-13, et seq). Arguments that relate to credibility and
weight of evidence cannot prevent triable issues of fact. Biles v. Exxon Mobil Corp. (2004) 124
Cal. App. 4th 1315, 1333. “[T]he role of
the court in summary judgment proceedings is not to weigh the evidence, but to
determine whether there exists a triable issue of material fact.” Habitat Trust for Wildlife, Inc. v. City
of Rancho Cucamonga (2009) 175 Cal. App. 4th 1306, 1342.
Therefore, the Court concludes that Plaintiff has raised
triable issues of fact on the issues of duty and causation on the legal
malpractice claim.
Breaches of Fiduciary Duties
Plaintiff’s second cause of action alleges that
Defendant Erikson breached his fiduciary duties by failing to account for money
that belonged to Plaintiff. (Compl., ¶ 46.) As a fiduciary, attorneys assume
duties and must undertake to act in clients’ best interests. T & R Foods, Inc. v. Rose (1996)
47 Cal.App.4th Supp. 1, 8. “‘A violation of the Rules of Professional Conduct
subjects an attorney to disciplinary proceedings, but does not in itself
provide a basis for civil liability. Noble v. Sears, Roebuck & Co.
(1973) 33 Cal.App.3d 654, 658, 109 Cal.Rptr. 269. But the rules, “together with
statutes and general principles relating to other fiduciary relationships, all
help define the duty component of the fiduciary duty which the attorney owes to
his or her client.’ ” BGJ Associates,
LLC v. Wilson (2003) 113 Cal.App.4th 1217, 1227 (quoting David Welch Co.
v. Erskine & Tulley (1988) 203 Cal.App.3d 884, 890). Whether an attorney has breached a fiduciary
duty to his or her client is generally a question of fact.… Expert testimony is
not required…, but is admissible to establish the duty and breach elements of a
cause of action for breach of fiduciary duty where the attorney conduct is a
matter beyond common knowledge….” Stanley
v. Richmond (1995) 35 Cal.App.4th 1070, 1087.
Defendants contend that Plaintiff cannot establish
that Defendant Erikson failed to account for or
provide any money that Erikson allegedly collected on Plaintiff’s behalf. In
contrast, the opposition rebuts that Defendants collected monies on behalf of
Plaintiff and failed to deliver or adequately and timely report them. The Court
determines that there are triable issues regarding attorney breach of fiduciary
duties, including whether Defendant Erikson failed to account for, or to deliver,
any money allegedly collected on Plaintiff’s behalf, based upon substantial
proof (e.g., Martorell Decl., ¶ 21 and
Ex. 32 (request for money reportedly wired
to Defendant on client’s behalf, followed by no response, reasonably and
substantially inferring Defendant’s concealing keeping such money, when construed
in light of waivers of evidentiary objections not filed)).
Conclusion
The motion for summary judgment, or, alternatively,
summary adjudication is DENIED.