Judge: Maurice A. Leiter, Case: BC618179, Date: 2023-02-06 Tentative Ruling

Case Number: BC618179    Hearing Date: February 6, 2023    Dept: 54

Hearing Date: February 6, 2023

Department 54, Judge Maurice A. Leiter

Demurrer to Third Amended Complaint and Motion to Strike

Moving Party: Defendants Richard Shinee and Green & Shinee

Responding Party: Plaintiff Armando Macias

T/R:     DEFENDANTS’ DEMURRER IS SUSTAINED WITHOUT LEAVE TO AMEND.

THE MOTION TO STRIKE IS MOOT.

            DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.         

BACKGROUND

            On April 8, 2022, Plaintiff filed a complaint against Defendants alleging causes of action for legal malpractice and breach of fiduciary duty. Plaintiff alleges Defendants committed malpractice in connection with Plaintiff’s contested right to sit on the Sheriff’s union board.

In 2013, Plaintiff was reelected to Los Angeles Sherriff’s union’s (ALADS) board of directors. The same year, the board elected Plaintiff President of the union. In 2014, the board voted to remove Plaintiff from the board because he had violated the “75% rule.” This rule provides that “to run for a seat on ALADS’ board of directors, deputies must be a unit representative and attend at least 75% of unit representative meetings for two years preceding their candidacy pursuant to ALADS’ bylaws.” (SAC ¶ 9.) Plaintiff also was removed as the union President because only board members may hold executive office. Plaintiff alleges that this rule had been never applied to sitting directors running for re-election. Plaintiff then challenged his removal.

REQUEST FOR JUDICIAL NOTICE

            Defendants’ request for judicial notice is GRANTED.

ANALYSIS

A. Demurrer to Third Amended Complaint

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

            Defendants demur to the third, fourth and fifth causes of action for legal malpractice, breach of fiduciary duty and fraud on the ground that they are immune from suit.

Plaintiff alleges that when Macias’s eligibility to serve on ALADS’s board was brought to the board’s attention in or about March 2014, Shinee was the general counsel of ALADS and, at the same time, Shinee was Macias’s attorney although on a matter unrelated to Macias’s eligibility to serve on ALADS’ board. Plaintiff alleges Shinee was ALADS’s general counsel for many years; whenever the issue arose of a sitting director’s eligibility to run for reelection based on the director’s failure to satisfy the 75% rule, Shinee had advised the board that the directors were eligible, because the 75% rule did not apply to sitting directors running for reelection.

When Plaintiff’s eligibility was questioned, Defendants advised the board that they had a conflict of interest and hired independent counsel to opine on the issue. Defendants hired Brent Gidden, who advised that Plaintiff was not eligible to sit on the board.

Plaintiff alleges Defendants committed malpractice when they failed to inform Macias that Shinee could provide his opinion on the 75% rule if Macias waived Shinee’s conflict of interest, and when Shinee refused to protect Macias’ interests by informing the board that the 75% rule did not apply to sitting directors running for reelection. Plaintiff contends this fell below the standard of care and loyalty owed by Shinee to Macias. Plaintiff also claims that Gidden was not truly independent, and Defendants should have advised Plaintiff to seek his own independent counsel.

Moving Defendants demur on the ground that the claims against them are is barred by the immunity provided in 29 U.S.C. § 185(b). This section provides in relevant part, “[a]ny money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.” (Id.) Both federal and California state courts have found that legal counsel functioning as union agents in the collective bargaining process are immune from individual liability for malpractice under 29 U.S.C. § 185(b). (See Aragon v. Pappy, Kaplon, Vogel & Phillips (1989) 214 Cal.App.3d 451, 458-463; Peterson v. Kennedy, 771 F.2d 1244 (9th Cir. 1985).) Courts have applied this immunity in situations where counsel represents a union member in a grievance procedure and the union member sues for professional negligence. (Id.)

Defendants assert they were acting as agents of the union in the collective bargaining process and are therefore immune from suit for malpractice. In opposition, Plaintiff argues that immunity does not apply because Plaintiff is not suing for services rendered during the collective bargaining process and because Defendants still owed Plaintiff ethical duties.

The relevant cases do not explicitly define what actions are a part of the “collective bargaining process.” Courts have applied immunity in situations where counsel represents a union member in a grievance procedure and the union member sues for professional negligence. (Aragon, supra; Peterson supra.) The Ninth Circuit in Peterson identified examples of actions “wholly unrelated to the collective bargaining process, such as drafting a will, handling a divorce or litigating a personal injury suit.” (Peterson, supra 771 F.2d at 1259.) Here, Defendants represented Plaintiff in a union-related matter and hired counsel to advise on an issue of union governance. These actions are fundamental union matters and are part of the collective bargaining process. Defendants are immune from suit.

Defendants’ demurrer is SUSTAINED without leave to amend.

B. Motion to Strike

            The motion to strike the cause of action for fraud is MOOT as the Court sustained Defendants’ demurrer. The Court notes that Plaintiff did not have leave to add this cause of action. This is improper.