This case was last updated from Los Angeles County Superior Courts on 10/25/2020 at 09:09:05 (UTC).

THE VIOLA E COX TRUST ET AL VS VERNA MONDON ET AL

Case Summary

On 02/07/2018 THE VIOLA E COX TRUST filed a Personal Injury - Elder/Dependant Adult Abuse lawsuit against VERNA MONDON. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are MEL RED RECANA, DEBRE K. WEINTRAUB, SUSAN BRYANT-DEASON, DEBRE KATZ WEINTRAUB, RUTH ANN KWAN, CHRISTOPHER K. LUI and RAMONA G. SEE. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****3270

  • Filing Date:

    02/07/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Personal Injury - Elder/Dependant Adult Abuse

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

MEL RED RECANA

DEBRE K. WEINTRAUB

SUSAN BRYANT-DEASON

DEBRE KATZ WEINTRAUB

RUTH ANN KWAN

CHRISTOPHER K. LUI

RAMONA G. SEE

 

Party Details

Plaintiffs and Petitioners

GARY NICHOLAS TRUSTEE OF THE VIOLA E.

THE VIOLA E. COX TRUST

GARY NICHOLAS

Defendants and Respondents

MONDON VERNA

VISTA COVE AT ARCADIA INC

BANK OF AMERICA CORP

DOES 1 TO 100

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

CLARY JULIE ESQ

SAGHEB SOHAILA ESQ.

CLARY JULIE

SAGHEB SOHAILA

Defendant and Respondent Attorneys

CASEY REGINA A.

SEVERSON & WERSON A PROFESSIONAL CORP LA

SWANSON QUINTON

AJELLO LORA A. ESQ.

LE AN

SWANSON QUINTON R.

SITAR LAURA K.

KENNEY AUSTIN B.

AJELLO LORA ANN

 

Court Documents

Declaration - DECLARATION AND EXHIBITS IN OPPOSITION TO PETITION PURSUANT TO CIVIL CODE 1714.10

10/20/2020: Declaration - DECLARATION AND EXHIBITS IN OPPOSITION TO PETITION PURSUANT TO CIVIL CODE 1714.10

Minute Order - MINUTE ORDER (HEARING ON MOTION FOR ORDER PERMITTING PLAINTIFF TO FILE SECO...)

8/19/2020: Minute Order - MINUTE ORDER (HEARING ON MOTION FOR ORDER PERMITTING PLAINTIFF TO FILE SECO...)

Minute Order - MINUTE ORDER (COURT ORDER RE: CONTINUANCE OF THE HEARING ON MOTION FOR AN O...)

3/17/2020: Minute Order - MINUTE ORDER (COURT ORDER RE: CONTINUANCE OF THE HEARING ON MOTION FOR AN O...)

Declaration - DECLARATION OF SOHAILA SAGHEB RE COMPELLING MORFF DEPOSITION

11/12/2019: Declaration - DECLARATION OF SOHAILA SAGHEB RE COMPELLING MORFF DEPOSITION

Opposition - OPPOSITION TO MOTION TO COMPEL SHARON MOFF TO TESTIFY

11/6/2019: Opposition - OPPOSITION TO MOTION TO COMPEL SHARON MOFF TO TESTIFY

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE: MOTION TO COMPEL ARBITRATION;) OF 10/23/2019, AND WRITTEN RULING

10/23/2019: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE: MOTION TO COMPEL ARBITRATION;) OF 10/23/2019, AND WRITTEN RULING

Proof of Service by Mail

10/16/2019: Proof of Service by Mail

Reply - REPLY DEFENDANT'S REPLY IN SUPPORT OF RENEWED PETITION TO COMPEL ARBITRATION

10/15/2019: Reply - REPLY DEFENDANT'S REPLY IN SUPPORT OF RENEWED PETITION TO COMPEL ARBITRATION

Notice - NOTICE OF CONTINUANCE OF HEARING RE MOTION TO COMPEL MORFF DEPOSITION

9/30/2019: Notice - NOTICE OF CONTINUANCE OF HEARING RE MOTION TO COMPEL MORFF DEPOSITION

Opposition - OPPOSITION TO VISTA COVE'S EX PARTE APPLICATION FOR STAY

9/17/2019: Opposition - OPPOSITION TO VISTA COVE'S EX PARTE APPLICATION FOR STAY

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE - TO PLAINTIFF...)

6/4/2019: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE - TO PLAINTIFF...)

Notice of Ruling

4/4/2019: Notice of Ruling

Minute Order - Minute Order (Case Management Conference; Hearing on Motion for Leave to fi...)

2/21/2019: Minute Order - Minute Order (Case Management Conference; Hearing on Motion for Leave to fi...)

Minute Order - Minute Order (Case Management Conference; Hearing on Motion for Leave to fi...)

12/18/2018: Minute Order - Minute Order (Case Management Conference; Hearing on Motion for Leave to fi...)

PLAINTIFFS? OBJECTION TO DEFENDANT VISTA COVE AT ARCADIA, INC.?S PREEMPTORY CHALLENGE TO JUDICIAL OFFICER SUSAN BRYAN-DEASON

8/29/2018: PLAINTIFFS? OBJECTION TO DEFENDANT VISTA COVE AT ARCADIA, INC.?S PREEMPTORY CHALLENGE TO JUDICIAL OFFICER SUSAN BRYAN-DEASON

CASE MANAGEMENT STATEMENT -

8/9/2018: CASE MANAGEMENT STATEMENT -

Minute Order -

6/5/2018: Minute Order -

Minute Order -

4/20/2018: Minute Order -

152 More Documents Available

 

Docket Entries

  • 12/11/2020
  • Hearing12/11/2020 at 09:00 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Trial Setting Conference

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  • 11/04/2020
  • Hearing11/04/2020 at 13:30 PM in Department STL-C at 312 North Spring Street, Los Angeles, CA 90012; MSC Timeslot

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  • 11/03/2020
  • Hearing11/03/2020 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Order Permitting Plaintiff to Allege Claims Against Attorney Sharon Morff Pursuant to Civil Code Section 1714.10

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  • 10/20/2020
  • DocketOpposition (to Petition Pursuant To Civil Code 1714.10); Filed by Sharon Morff (Defendant)

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  • 10/20/2020
  • DocketObjection (to Evidence Submitted in Support of Petition; Proposed Order); Filed by Sharon Morff (Defendant)

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  • 10/20/2020
  • DocketDeclaration (and Exhibits in Opposition to Petition Pursuant To Civil Code 1714.10); Filed by Sharon Morff (Defendant)

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  • 10/15/2020
  • Docketat 1:30 PM in Department STL-D, Ramona G. See, Presiding; MSC Timeslot (JUDGE STEPHEN MOLONEY) - Not Held - Continued - Court's Motion

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  • 10/13/2020
  • DocketNotice (of Order relating Cases); Filed by Nicholas Gary (Plaintiff)

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  • 10/02/2020
  • Docketat 4:45 PM in Department 76, Christopher K. Lui, Presiding; Court Order

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  • 10/02/2020
  • DocketNotice of Related Case; Filed by Nicholas Gary (Plaintiff)

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284 More Docket Entries
  • 02/20/2018
  • DocketMiscellaneous-Other; Filed by The Viola E. Cox Trust (Plaintiff)

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  • 02/20/2018
  • DocketCIVIL DEPOSIT

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  • 02/07/2018
  • DocketComplaint; Filed by The Viola E. Cox Trust (Plaintiff); Nicholas Gary (Plaintiff)

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  • 02/07/2018
  • DocketComplaint

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  • 02/07/2018
  • DocketSUMMONS

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  • 02/07/2018
  • DocketCOMPLAINT FOR: 1. CONVERSATION ;ETC

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  • 02/02/2018
  • DocketNotice-Related Cases; Filed by Attorney for Plaintiff/Petitioner

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  • 02/02/2018
  • DocketNotice of Related Case; Filed by Plaintiff/Petitioner

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  • 08/09/2010
  • DocketNotice of Hearing; Filed by Plaintiff/Petitioner

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  • 08/09/2010
  • DocketNotice of Hearing; Filed by Attorney for Plaintiff/Petitioner

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Tentative Rulings

Case Number: BC693270    Hearing Date: August 19, 2020    Dept: 76

Defendant Verna Mondon allegedly deposited proceeds from the sale of a house into an account co-owned in Defendant’s own name, even though the proceeds were supposed to go into a revocable living trust for eventual distribution to trust beneficiaries.

Defendant Vista Cove allegedly participated in a scheme with Defendant Mondon to isolate decedent Viola Cox and prevent communication with other family members.

Plaintiff Nicholas Gary, Personal Representative of Decedent Viola E. Cox and Trustee of the Viola E. Cox Trust dated March 15, 2006 moves for leave to file a Second Amended Complaint.

TENTATIVE RULING

Plaintiff Nicholas Gary, Personal Representative of Decedent Viola E. Cox and Trustee of the Viola E. Cox Trust dated March 15, 2006’s motion for leave to file a second amended complaint is DENIED without prejudice. Plaintiff must bring a noticed-motion pursuant to Civil Code § 1714.10 in order to include the proposed claims against proposed additional Defendant Sharon Morff.

ANALYSIS

Motion For Leave To File Second Amended Complaint

Defendant’s Evidentiary Objections

Because the Court is not addressing the evidence on the merits, the Court finds Defendant’s evidentiary objections to Plaintiff’s evidence to be moot.

Discussion

Plaintiff Nicholas Gary, Personal Representative of Decedent Viola E. Cox and Trustee of the Viola E. Cox Trust dated March 15, 2006 moves for leave to file a Second Amended Complaint as to all Defendants other than Vista Cover.

The Court agrees with Proposed Additional Defendant Sharon Morff that Plaintiff is attempting to add allegations of a civil conspiracy against Morff acting as an attorney for her client Mondon, without having complied with Civil Code § 1714.10.

Civil Code § 1714.10 provides in pertinent part:

(a) No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action. The court may allow the filing of a pleading claiming liability based upon such a civil conspiracy following the filing of a verified petition therefor accompanied by the proposed pleading and supporting affidavits stating the facts upon which the liability is based. The court shall order service of the petition upon the party against whom the action is proposed to be filed and permit that party to submit opposing affidavits prior to making its determination. The filing of the petition, proposed pleading, and accompanying affidavits shall toll the running of any applicable statute of limitations until the final determination of the matter, which ruling, if favorable to the petitioning party, shall permit the proposed pleading to be filed.

. . .

(c) This section shall not apply to a cause of action against an attorney for a civil conspiracy with his or her client, where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.

. . .

(Civ. Code § 1714.10 [bold emphasis added].)

Plaintiff represents that, as to the third cause of action, Plaintiff newly alleges collusion between Defendants Mondon and Morff to deprive the Trust of more than 95% of its assets by misrepresentations, concealment and fraud. (Notice of Motion, Page 6:11-13.) As to the fourth cause of action, Plaintiff newly alleges the negligence of Mondon and Morff in depriving the Trust of its most valuable asset. (Notice of Motion, Page 6:16-17.) As to the fifth cause of action, Plaintiff newly alleges Morff’s liability in aiding and abetting Mondon’s conversion and fraud. (Notice of Motion, Page 6:18-19.)

The proposed Second Amended Complaint (“P2AC”) alleges that, after Cox died on June 6, 2016, Defendant Mondon retained attorney Morff in July 2016 to advise Mondon regarding disposition of the funds in the joint account. (P2AC, ¶ 24.) Morff allegedly advised Mondon to take the money out of the joint account and secret it away. (Id.) Mondon did as Morff advised, and Mondon closed the joint account on July 22, 2016, with Bank of America placing the joint account funds of $495,858.54 into a cashier’s check. (Id.) Mondon put the cashier’s check back into her home safe. (¶ 25.)

¶ 26 of the P2AC alleges that Mondon and Morff proceeded to mislead the other Trustee’s Gary and Shaw, regarding the location and ownership of the money. On August 16, 2016, Morff wrote to Shaw and Gary that she had been retained by Mondon, but assured them that Mondon was not “lawyering up for litigation.” (¶ 27.) Morff said nothing to Shaw or Gary about Mondon’s removal of Trust property. (Id.) Shaw considered Morff to be Mondon’s attorney. (¶¶ 28, 29.) Shaw then went to Bank of America and learned that all the money in the Trust was in Mondon’s name, but Shaw had no idea that Morff had directed Mondon to close the account. (¶ 29.) Morff told Shaw that Mondon would act with honor and integrity in all matters relating to her grandmother and the trust administration, and discouraged Shaw from contacting the trust beneficiaries. (¶ 30.)

On September 19, 2016, Morff told Shaw and Gary that the only amounts that Mondon sought from the Trust was compensation for work she had performed pursuant to the Power of Attorney. (¶ 31.) Morff did not disclose that Mondon had already taken the money and closed the account. (Id.) Morff claimed that once the co-Trustees agreed to compensate Mondon for work she did while Cox was alive, Mondon would give the Co-Trustee access to the money. (Id.) Shaw and Gary’s attorney, Julie clary, agreed to entertain a proposal from Mondon for what Plaintiff characterizes as “a ransom for the Trust money held hostage” by Morff and Mondon. (Id.) Morff and Mondon allegedly hid and held the Trust’s money hostage from the other Co-Trustees as they negotiated payment of the “ransom” to Mondon. (¶ 32.)

An examination of the third, fourth and fifth causes of action reveals that they are based upon an agreement, i.e., conspiracy, between Defendant Mondon and proposed new Defendant Morff.

As to the third cause of action for fraud, ¶ 50 alleges that after Cox died, Mondon—aided and abetted by her attorney, Morff—took and hid the funds from the Bank of America account and failed to disclose that the funds had been mis-deposited or that the account had been closed and that Mondon had converted the funds to her possession and control. (Id.) Defendants allegedly misrepresented the location of the Trust funds so that the funds could be held hostage while Morff and Mondon negotiated a larger distribution to Mondon than was provided by the terms of the Trust. (¶ 51.) Morff allegedly aided and abetted Mondon in the concealment of the funds from Plaintiff by misrepresenting that Mondon wishes to avoid litigation and honor her grandmother’s wishes, which was false. (¶ 52.) Plaintiff alleges that being misled in this way caused him not to immediately go to the bank to demand that the funds not be released to Mondon, and to seek court action to prevent the loss of the funds to Mondon. (Id.) Plaintiff alleges that, as Co-Trustee of the Trust, Mondon owed a fiduciary duty to Plaintiff, Shaw and the Trust beneficiaries, including a duty to disclose material facts known to affect the valuable Trust assets. (¶ 53.) Plaintiff alleges that the Trust funds have been lost to Mondon, who now claims that the entirety of the funds are owned by her. (¶ 54.)

The fourth cause of action for negligence alleges that after Cox died, Mondon and Morff had a duty to disclose to Plainiff that Trust funds had been mis-deposited and to correct the titling error on the Bank of America Account. (¶ 57.) Plaintiff alleges that Morff aided and abetted Mondon in breaching her duty to correct the titling error on the Bank of America account, and in failing to disclose the Trust funds had been mis-deposited so that Mondon could hold it hostage for a greater share of Trust assets. (Id.)

The fifth cause of action for aiding and abetting conversion and fraud alleges that Morff advised Mondon to close the account and take the funds and secret them away. (¶ 61.)

Based on the foregoing, it is clear that the allegations against Morff are based upon a conspiracy with her client, Mondon, because there is an agreement by Morff to participate in Mondon’s alleged breach of fiduciary duty as a trustee. (Cortese v. Sherwood (2018) 26 Cal.App.5th 445, 453-57.) Morff’s representation of Mondon was related to an attempt to contest or compromise a claim or dispute with the co-trustees regarding Mondon’s compensation as trustee. (Id.)

The statutory exceptions set forth at Civil Code § 1714.10(c) do not apply, because there are no facts pled in the P2AC which give rise to an independent duty owed by Morff to Plaintiff. The attorney for a trustee of a trust only owes a fiduciary duty to the client trustee, not the beneficiaries or third parties. (Cortese, supra, 26 Cal.App.5th at 458-59.) There are no facts alleged that Morff engaged in conduct beyond what was required of her as Mondon’s legal representative. (Id. at 459.) There is no allegation that Morff made a misrepresentation of fact whereby Plaintiff paid or lost money to Morff to support a claim of fraud[1]. There are no facts giving rise to an independent duty of care to non-clients owed by Morff, in advising Mondon, because there is no indication that such representation was intended to benefit third parties. (Goldberg v. Frye (1990) 217 Cal.App.3d 1258, 1268-1269[2].) There are no allegations that Morff acted as an individual for a personal advantage or gain over and above ordinary professional fees earned as compensation for performance of the agency, rather than solely on behalf of Mondon. (Cortese, supra, 26 Cal.App.5th at at 460-61.)

The exceptions mirror the limits on an attorney's liability for conspiracy established by our Supreme Court in Doctors' Co. v. Superior Court Doctors' Co.). As explained by our Supreme Court, “‘[t]he elements of an action for civil conspiracy are the formation and operation of the conspiracy and damage resulting to plaintiff from an act or acts done in furtherance of the common design. …’” (Id. Ibid.)

This statement derives from the agent's immunity rule, which holds that “‘“an agent is not liable for conspiring with the principal when the agent is acting in an official capacity on behalf of the principal.”’” (Panoutsopoulos v. Chambliss Pavicich v. Santucci Pavicich).) However, an attorney may be liable for conspiracy if the attorney acts “in furtherance of the attorney's own financial gain,” or if the attorney violates his or her “own duty to the plaintiff,” such as by committing fraud. (Doctors' Co., supra, 49 Cal.3d at pp. 46–47.)  As recognized by a number of courts, “the effect of the amendment on the statute's application is anomalous. Since the statute now removes from its scope the two circumstances in which a valid attorney-client conspiracy claim may be asserted, its gatekeeping function applies only to attorney-client conspiracy claims that are not viable as a matter of law in any event.” (Berg & Berg, supra, 131 Cal.App.4th at p. 818; see Pavicich, supra, 85 Cal.App.4th at pp. 394–396.) 

An order overruling a demurrer based on section 1714.10 is directly appealable. (Klotz v. Milbank, Tweed, Hadley & McCloy Klotz).)  “We review the trial court's interpretation of section 1714.10 under the de novo standard.” (Central Concrete Supply Co., Inc. v. Bursak Berg & Berg, supra, 131 Cal.App.4th at p. 818.) “Once it is determined that the pleading falls within the coverage of subdivision (a) of section 1714.10, the next step is to ascertain whether the pleaded claims fall within either of the exceptions set forth in subdivision (c) of the statute.” (Stueve v. Berger Kahn Stueve).)

. . .

1. Cortese Alleges a Civil Conspiracy Between Sherwood and Robert

Cortese alleges Sherwood participated in Robert's breaches of his fiduciary duties by “assisting Robert in effectuating his plan” of withholding community property from Francesca's estate, devaluing Francesca's estate, mismanaging her trust, and terminating it in a manner that benefited Robert. Sherwood is also alleged to have persuaded or “induced” Cortese not to challenge Robert's actions as executor of Francesca's estate and trustee of her trust, and to agree to early termination of Francesca's trust, by representing she would receive a large inheritance from Robert's estate when he died.

Cortese does not expressly allege Sherwood conspired with Robert, but  a cause of action can still fall “within the initial scope of section 1714.10 … without regard to the labels attached to the cause[] of action or whether the word ‘conspiracy’—having no talismanic significance—appears in them.” (Berg & Berg, supra, 131 Cal.App.4th at p. 824.) We review the factual allegations underlying Cortese's second cause of action to determine whether it alleges a conspiracy, no matter what labels are used. (Ibid.)

Considering Cortese's allegations, we cannot conceive how Sherwood could have participated in Robert's alleged breaches of fiduciary duty without an implied agreement to do so. (Wyatt v. Union Mortgage Co. Berg & Berg, supra, 131 Cal.App.4th at p. 823.)

In arguing otherwise, Cortese contends, “California case law relating to trusts and estates recognizes a cause of action for participation in a breach of trust as an independent tort.” We agree in part and disagree in part.  California law recognizes an attorney can be liable for participating in a trustee's breach of fiduciary duty to a beneficiary, but the tort is not independent; instead, it is dependent on the trustee's fiduciary duty. As explained in City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. Atascadero), “[t]he rights of trust beneficiaries vis-à-vis third parties who participate in a breach of trust ultimately derive from the obligations of the trustee himself.” (Id.

The elements of a cause of action for an attorney's participation in breach of trust are active participation and conduct in furtherance of the attorney's “own financial gain.” (Pierce v. Lyman Pierce); see also Atascadero, supra, 68 Cal.App.4th at p. 464 [“trust beneficiaries may sue third parties who participated with a trustee in alleged breaches of trust, as long as the third parties' participation was both active and for the purpose of advancing their own interests or financial advantage.”].) In Pierce, there were allegations of active participation in a trustee's breach of trust because the attorneys were alleged to have “purposefully drafted and filed annual accountings with the probate court in order to conceal those breaches from the court.” (Pierce, supra, 1 Cal.App.4th at p. 1105). There were also allegations of conduct in furtherance of the attorneys' own financial gain because they engaged in self-dealing by gaining “‘access to investments on a preferential basis.’” (Ibid.)

We do not suggest a cause of action for participation in breach of trust must always be viewed as giving rise to a civil conspiracy. Certainly, we can conceive of circumstances where an attorney could be liable for participation in breach of trust, but where the attorney could not be viewed as a coconspirator of the trustee. For example, if a trustee were to fail to keep the beneficiary informed regarding the trust's administration, and if, unbeknownst to the trustee, the trustee's attorney were to engage in self-dealing by transferring trust property to him or herself, then the beneficiary could state a cause of action against the attorney for participation in breach of trust, but there would be no basis for concluding there was an agreement or plan between the attorney and the trustee to engage in the conduct amounting to a breach of trust.

But here, Cortese's allegations imply an agreement between Robert and his attorney: she alleges Sherwood “joined the wrongful conduct by assisting Robert in effectuating his plan during the administration of Francesca's Estate and Trust.” Cortese alleges Sherwood “participated in Robert's breaches by dictating the terms  of the termination agreement that substantially benefited Robert” and harmed Cortese, and Sherwood “substantially assisted Robert” by inducing Cortese not to worry about the value of Francesca's trust or the terms of the termination agreement. Thus, Cortese alleges a “union of conduct between attorney and client [and] … the absence of other allegations of independent conduct” by Sherwood. (Berg & Berg, supra, 131 Cal.App.4th at p. 824.) Accordingly, we must construe the allegations underlying Cortese's second cause of action as falling within the initial coverage of section 1714.10.

Cortese relies on Alden v. Hindin Alden, at p. 1506.) But, unlike the plaintiff in Alden, Cortese does not allege Sherwood engaged in independent wrongful conduct; instead, she alleges he participated in Robert's breaches of his fiduciary duties. As currently pled, Cortese's cause of action against Sherwood for participation in breach of trust falls within the scope of a claim for civil conspiracy.

2. Cortese Alleges Sherwood's Conduct Arose from an Attempt to Contest or Compromise a Claim or Dispute

The prefiling requirements of section 1714.10 apply to a “cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney's representation of the client.” (§ 1714.10, subd. (a).) Here, the alleged conduct arose from an attempt to compromise a dispute because Cortese alleges Sherwood “induced [her] into foregoing any challenges to Robert's actions as executor and trustee by stating that she should not worry about the valuations as she would be a very wealthy woman at Robert's death.”

The phrase “arising from any attempt to contest or compromise a claim” suggests the statute's prefiling requirements apply “to situations in which the alleged conspiracy arose from the attorney's representation of his or her client in a previous or current legal dispute or litigation with the plaintiff.” (Favila v. Katten Muchin Rosenman LLP Klotz, supra, 238 Cal.App.4th at page 1352, the court determined a partner's request for advice from an attorney on a new business opportunity that potentially conflicted with the interests of a partnership constituted “the provision of services in connection with the settlement of a claim or dispute.” Similarly here, Cortese's allegations that Sherwood induced her not to challenge Robert's actions as executor of Francesca's estate and trustee of her trust qualify as conduct arising from the compromise or settlement of a dispute.

. . .

C. The Statutory Exceptions Do Not Apply

Next, we consider whether Cortese sufficiently alleges Sherwood owed her an independent legal duty, or whether his alleged conduct was “in furtherance of the attorney's financial gain.” (§ 1714.10, subd. (c).) We conclude Cortese's allegations are not sufficient to qualify for one of the statutory exceptions. Therefore, Cortese should have sought court approval before filing her second cause of action.

1. No Allegations Support an Independent Legal Duty Owed by Sherwood to Cortese

With regard to the first statutory exception, and relying on cases like Pierce, supra, 1 Cal.App.4th at page 1105, Cortese contends Sherwood “had a legal duty to [her] to refrain from knowingly and actively participating and assisting Robert in his breaches of trust, which caused [her] harm.” But, as explained ante, the duty underlying this tort is a trustee's fiduciary duty to a beneficiary, not an independent legal duty owed by the attorney to the beneficiary. (Atascadero, supra, 68 Cal.App.4th at p. 462.)

Cortese alleges Sherwood was Robert's attorney, and there is no allegation he represented her.  “‘“[T]he attorney for the trustee of a trust is [*459]  not, by virtue of this relationship, also the attorney for the beneficiaries of the trust. The attorney represents only the trustee.” [Citations.]’ [Citations.] … The fact that estate beneficiaries may be benefited by the attorney's representation ‘does not give rise to a duty by the attorney to such third parties … .’ [Citation.] … In these contexts in which the attorney represents a fiduciary, it is to the client trustee or administrator alone that the attorney owes duties … . This rings especially true where, as here, the attorney's client and the third party are adverse, as the attorney's duty of loyalty to his or her client cannot be divided or diluted by a duty owed to a third party. [Citation.]” (Berg & Berg, supra, 131 Cal.App.4th at p. 826.)

Cortese alleges Sherwood made certain statements to her, including that “she would be a very wealthy woman at Robert's death,” that “induced [her] into foregoing any challenges to Robert's actions as executor and trustee.” But Cortese never alleges Sherwood's statements to Cortese in 1997, around the time her mother died, or in 2009, when Francesca's trust was terminated, were false when made. Robert, who died in 2016, could have later changed his still-revocable trust or failed to change it to conform to his promises to Cortese. Cortese's allegations against Sherwood are insufficient to state a claim for fraud. (Pacesetter Homes, Inc. v. Brodkin

Sherwood is alleged to have “participated in Robert's breaches by dictating the terms of the termination agreement” in a manner that benefited Robert. Cortese suggests Robert took advantage of her and her sister because he knew Cortese was not represented by counsel in negotiating the terms of the termination agreement. But, for the exceptions to section 1714.10 to apply, Cortese must allege conduct by Sherwood beyond what was required of him as Robert's legal representative. (Klotz, supra, 238 Cal.App.4th at pp. 1351–1352.) We agree with Sherwood that, as Robert's attorney, he had “no duty to Ms. Cortese to protect her interests or advocate for her in negotiating the termination of” Francesca's trust. (Berg & Berg, supra, 131 Cal.App.4th at p. 826 [generally, an attorney who represents trustee owes duties to his client, not third parties].)

In Pavicich, the court stated that where an “‘attorney gives his client a written opinion with the intention that it be transmitted to and relied upon by the plaintiff in dealing with the client[,] … the attorney owes the plaintiff a duty of care in providing the advice because the plaintiff's anticipated reliance upon it is “the end aim of the transaction.”’” (Pavicich, supra, 85 Cal.App.4th at p. 395.) Relying on this statement, Cortese contends that Sherwood owed her and her sister a duty of care in advising them on the tax consequences of early termination of Francesca's trust.

. . .

Finally, to the extent Cortese implies that Sherwood had a duty to insure Robert kept his alleged promises to Cortese, “no duty or liability to the nonclient potential beneficiary has been recognized.” (Chang v. Lederman Boranian v. Clark

2. Whether Sherwood Acted to Further His Own Financial Gain

Nor does Cortese sufficiently allege conduct by Sherwood beyond his role as Robert's agent and “in furtherance of the attorney's financial gain.” (§ 1714.10, subd. (c).)  For this exception to the application of section 1714.10 to apply, there must be allegations the attorneys were acting “‘as individuals for their individual advantage’ and not solely on behalf of the principal.” (Doctors' Co., supra, 49 Cal.3d at p. 47.)

Here, Cortese alleges Sherwood “obtained a personal advantage not only in the form of fees, but also in preserving, on information and belief, his sole source of income as Robert's trusted advisor, personal and estate planning lawyer and general counsel for Robert's companies.” Cortese also alleges Sherwood received fees in relation to other trusts he established for Robert. But these allegations that Sherwood continued to receive fees for performing legal work, or as Robert's business adviser, do not indicate Sherwood obtained “a personal advantage or gain that is over and above ordinary professional fees earned as compensation for performance of the agency.” (Berg & Berg, supra, 131 Cal.App.4th at p. 834.) “This exception does not [*461]  apply to fees charged, even where the fees were excessive or the services unnecessary. ‘Such allegations could be made by an adversary in any case, thus significantly weakening the gatekeeping function of the statute.’” (Klotz, supra, 238 Cal.App.4th at p. 1351.)

(Cortese v. Sherwood (2018) 26 Cal.App.5th 445, 453-61 [bold emphasis and underlining added].)

The motion for leave to file a second amended complaint is DENIED without prejudice.


[1] Plaintiff would be limited to out-of-pocket losses and expenditures in reliance on fraud. (Kenly v. Ukegawa (1993) 16 Cal.App.4th 49, 54.)

[2]

The fact that third parties are thus benefited, or damaged, by the attorney's performance does not give rise to a duty attorney third parties, and hence cannot be the basis for a cause of action by the third parties for the attorney's negligence. In these cases the third parties are incidental beneficiaries, and "[a]n incidental benefit does not suffice to  [*1269]  impose a duty upon the attorney." (1 Mallen & Smith,  supra, § 7.11, p. 385; Mason v.  (1978) 77 Cal.App.3d 60, 67-68 [143 Cal.Rptr. 389] [attorney's contractual right to a percentage of contingency fee gave no direct right to sue successor attorney for failure to process the lawsuit].)

(Goldberg v. Frye (1990) 217 Cal.App.3d 1258, 1268-69.)

Case Number: BC693270    Hearing Date: July 08, 2020    Dept: 76

STATEMENT OF FACTS

Defendant Verna Mondon allegedly deposited proceeds from the sale of a house into an account co-owned in Defendant’s own name, even though the proceeds were supposed to go into a revocable living trust for eventual distribution to trust beneficiaries.

Defendant Vista Cove allegedly participated in a scheme with Defendant Mondon to isolate decedent Viola Cox and prevent communication with other family members.

Plaintiff Nicholas Gary, Personal Representative of Decedent Viola E. Cox and Trustee of the Viola E. Cox Trust dated March 15, 2006 moves for leave to file a Second Amended Complaint.

TENTATIVE RULING

After reviewing the file in this case, the Court is concerned that Defendant Vista Cove at Arcadia might not have received adequate notice of the hearing on the instant motion. The proof of service attached to the notice of motion indicates that a service copy of the motion was sent to Vista Cove’s counsel, Pleiss Sitar McGrath Hunter & Hallack, at the address of 5510 Trabuco Road, Irvine, CA 92620. However, on May 29, 2019, the Pleiss Sitar firm filed a notice of change of address indicating that as of May 30, 2019 their address would be changing to 2875 Michelle Drive, Suite 150, Irvine CA 92606. To ensure that all parties have adequate notice of the instant motion, the Court will continue the hearing so that service may be made to the address of record for Vista Cove’s counsel.

The hearing on Plaintiff Nicholas Gary, Personal Representative of Decedent Viola E. Cox and Trustee of the Viola E. Cox Trust dated March 15, 2006’s motion for leave to file a Second Amended Complaint is CONTINUED to August 19, 2020 at 1:30 p.m.

Plaintiff is to serve a copy of this motion upon counsel for Defendant Vista Cove At Arcadia, Pleiss Sitar McGrath Hunter & Hallack, which changed its address to 2875 Michelle Dr., Suite 150, Irvine CA and to file a proof of service in this regard. Plaintiff is also to give notice of the continuance.

The Court will not entertain any further briefing on this motion, other than an opposition brief (if any) from Defendant Vista Cove, and a reply from Plaintiffs to any opposition filed by Vista Cove.