Judge: Michael Shultz, Case: 23STCV19923, Date: 2024-12-03 Tentative Ruling
Case Number: 23STCV19923 Hearing Date: December 3, 2024 Dept: 40
23STCV19923 Nathaniel Howard v. Kenneth Melrose, et al.
[TENTATIVE] ORDER
I.
BACKGROUND
The
second amended complaint (“SAC”) arises from Defendants’ alleged malpractice in
pursuing Plaintiff’s underlying personal injury action tiled Howard v. Clark
Construction, Conco, etc., et al. (“Personal Injury action”), which was
allegedly pursued by Brian Witzer and the Law Offices of Brian Witzer (“Witzer
parties”), and Kenneth Melrose and the Law Offices of Ken Melrose (“Melrose
parties”) (collectively “Witzer Melrose”.) Plaintiff alleges claims for fraud,
breach of fiduciary duty, dependent elder abuse, negligence, breach of contract
conversion, and for declaratory relief.
II.
ARGUMENTS
Defendant,
Yangkyoung Lee (“Lee” or “Defendant”), demurs to the ninth cause of action for
breach of fiduciary duty and the 10th cause of action for negligence.
Lee argues that the court previously sustained demurrer to the same causes of
action alleged in the original complaint against Lee. Lee argues that Plaintiff
alleged identical facts against Lee in the FAC and the SAC all of which fail to
support all required elements of the claims. Lee argues that both claims are
based on the same alleged breach of fiduciary duty and are duplicative.
Lee
separately moves to strike the claims for punitive damages which Plaintiff
cannot recover given Plaintiff’s failure to allege viable claims against Lee.
Plaintiff does not oppose the motion to strike.
In
opposition, Plaintiff argues that Lee breached her fiduciary duty by
representing Howard in the Personal Injury action although she previously worked
for the law firm representing the Clark defendants, Bullard, Brown, and Beal (“BBB”)
in the same action. Lee’s breach of duty arose from her “reckless acceptance”
of a position with Witzer Melrose, which resulted in severe diminution in value
of the Personal Injury action once the five-year mandatory dismissal statute
became an issue.
Lee
replies that Plaintiff has not addressed the central issue – whether a
fiduciary duty claim can be based on a conflict of interest theory, allegedly
violated by Lee but owed to her former clients in the Personal Injury matter. Plaintiff did not allege that Lee was an
attorney of record for Plaintiff in the Personal Injury action; Lee was merely
assigned some work on the case while working at the firm.
III.
LEGAL STANDARDS
A demurrer tests the sufficiency of a complaint as
a matter of law and raises only questions of law. (Schmidt v. Foundation Health
(1995) 35 Cal.App.4th 1702, 1706.) In testing the complaint’s sufficiency, the
court must assume the truth of the properly pleaded factual allegations as well
as facts that can be reasonably inferred from those expressly pleaded facts.
The court may also consider matters properly subject to judicial notice. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.)
The court may not consider contentions, deductions,
or conclusions of fact or law. (Moore v. Conliffe
(1994) 7 Cal.4th 634, 638.) Plaintiff is required to allege facts sufficient to
establish every element of each cause of action. (Rakestraw v. California Physicians Service
(2000) 81 Cal.App.4th 39, 43.) Where the
complaint fails to state facts sufficient to constitute a cause of action,
courts should sustain the demurrer. (Code Civ. Proc., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
Sufficient facts are the essential facts of the
case "with reasonable precision and with particularity that is
sufficiently specific to acquaint the defendant with the nature, source, and
extent of his cause of action.” (Gressley v. Williams
(1961) 193 Cal.App.2d 636, 643-644.)
Whether the Plaintiff will be able to prove the pleaded facts is
irrelevant. (Stevens v. Superior Court
(1986) 180 Cal.App.3d 605, 609–610.)
A demurrer may also be sustained if a complaint is
“uncertain.” Uncertainty exists where a complaint’s factual allegations are so
confusing, they do not sufficiently apprise a defendant of the issues it is
being asked to meet. (Williams v. Beechnut Nutrition Corp.
(1986) 185 Cal.App.3d 135, 139, fn. 2; Code
Civ. Proc., § 430.10(f).)
A pleading is required to assert general
allegations of ultimate fact. Evidentiary facts are not required. (Quelimane Co. v.
Stewart Title Guaranty Co. (1998) 19 Cal. 4th
26, 47; Lim v. The.TV Corp. Internat. (2002) 99 Cal. App. 4th 684, 690.) However, unlike
federal courts, California state courts are not a notice pleading jurisdiction,
and notice alone is not a sufficient basis for any pleading. California is a
fact pleading jurisdiction. Merely putting an opposing party on notice is not
sufficient. (Bach v. County of Butte
(1983) 147 Cal.App.3d 554, 561; see Diodes, Inc. v. Franzen
(1968) 260 Cal.App.2d 244, 250.)
IV.
DISCUSSION
A.
Demurrer
to the ninth cause of action for breach of fiduciary duty is SUSTAINED.
Plaintiff can prevail on this claim by
showing the existence of a fiduciary relationship, breach of that duty, causation, and damages
caused by the breach. (Mosier
v. Southern California Physicians Ins. Exchange (1998) 63 Cal.App.4th 1022, 1044.) Plaintiff alleges that Lee had ethical
responsibilities to Plaintiff once any substantive aspect of the Personal
Injury action was conveyed to Lee and once
she became employed by the attorney defendants in this matter. (SAC ¶ 184.) Lee
had a duty to check with her former employers that her engagement in the
Personal Injury action would not be raising a conflict of interest. (Id.)
Plaintiff also alleged that Lee breached her fiduciary duties owed to Plaintiff
at the moment she accepted employment with Witzer Melrose and the moment she
began working on Plaintiff’s Personal Injury action without consent from
Plaintiff or the Clarke Defendants in that action. (SAC ¶ 185.)
A
fiduciary relationship is one “existing between parties to a transaction
wherein one of the parties is duty bound to act with the utmost good faith for
the benefit of the other party. Such a relation ordinarily arises where a
confidence is reposed by one person in the integrity of another, and in such a
relation the party in whom the confidence is reposed, if he voluntarily accepts
or assumes to accept the confidence, can take no advantage from his acts
relating to the interest of the other party without the latter's knowledge or
consent....’” (Cleveland
v. Johnson (2012) 209 Cal.App.4th 1315, 1338.)
Plaintiff
contends that Lee breached a fiduciary duty owed to Plaintiff, by taking
employment with Witzer Melrose, Plaintiff’s attorneys at the time, after Lee
had represented the Clarke defendants in the same case four years earlier. The
allegations present a case of successive representation, wherein a client
discloses confidential information to an attorney, and that attorney
subsequently represents another client in a matter in which the two cases bear
a substantial relationship. (Sharp
v. Next Entertainment, Inc. (2008) 163 Cal.App.4th 410, 428.) However,
it is the former client’s expectation of privacy that must be preserved,
not the new client’s. (Kirk
v. First American Title Ins. Co. (2010) 183 Cal.App.4th 776, 796 [“… if
the former client [Clark defendants] can demonstrate a substantial relationship
between the subjects of the former and the current representations [Howard], it
is presumed that the attorney had access to confidential information in the
first representation which is relevant to the second representation."].)
If a
substantial relationship is established, a conflict is presumed and
disqualification will be ordered as "[t]he rights and interest of the former
client will prevail.” (Flatt
v. Superior Court (1994) 9 Cal.4th 275, 283 [emphasis added].) The SAC
does not allege facts to show how Lee breached a fiduciary duty toward
Plaintiff, where the duty of loyalty and confidentiality was owed to the Clark
defendants, Lee’s former clients.
B.
Demurrer to the 10th cause of action
for negligence is SUSTAINED.
Plaintiff
alleges this cause of action against Lee as an alternative to the breach of
fiduciary duty claim. (SAC ¶ 191.) Plaintiff alleges that Lee was negligent in
accepting the job with Melrose Witzer without obtaining her former clients’
consent. (Id.) Lee’s alleged negligence contributed to the
disqualification of Witzer Melrose, Plaintiff lost his trial date, and the
“claim of litigation funders sky-rocketed.” (SAC ¶ 195.)
As Lee
argues, the ninth and 10th causes of action are identical. The negligence
claim is based on the same facts alleged in the 10th cause of action
and is not “alternative” but rather states a duplicative claim. Such claims are
subject to demurrer as they " add[] nothing to the complaint by way of
fact or theory of recovery. There is no authority for a pleading of this type
and the demurrer was properly sustained without leave to amend as to that
cause." (Rodrigues
v. Campbell Industries (1978) 87 Cal.App.3d 494, 501.)
Additionally,
it is not clear what duty Lee allegedly owed Plaintiff before she accepted employment
with Witzer Melrose. Plaintiff admits that Lee should have obtained her former
client’s consent. (SAC ¶ 191.)
Plaintiff
alleges that Lee has taken the position that she did not recall working on the
Howard matter while employed by BBB, which Plaintiff believes is not credible
“especially since Lee had to have recalled that she formerly had been engaged
with BBB.” The court accepts all material facts alleged as true, “but not
contentions, deductions, or conclusions of fact or law." (Moore
v. Conliffe (1994) 7 Cal.4th 634, 638.)
V.
CONCLUSION
Leave to amend is ordinarily
given if there is a reasonable possibility that the defect can be cured.
However, it is the Plaintiff’s burden to demonstrate how he or she can amend
the complaint and how that amendment will change the legal effect of the pleading.
(Association of Community Organizations for Reform Now v. Department
of Industrial Relations (1995) 41
Cal.App.4th 298, 302.) Judge Richardson previously
gave Plaintiff leave to amend the defective allegations against Defendant Lee.
As the claims remain defective, demurrer to the ninth and 10th
causes of action are SUSTAINED WITHOUT LEAVE TO AMEND. The motion to strike the
claim for punitive damages is GRANTED. (Code Civ. Proc., § 436.)