On 11/13/2017 THEODOSIS ROUSSOS filed an Other lawsuit against DAVID R HABERBUSH. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is TERESA A. BEAUDET. The case status is Disposed - Judgment Entered.
Disposed - Judgment Entered
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
TERESA A. BEAUDET
ROES 1 - 50
HABERTBUSH DAVID R.
HABERBUSH & ASSOCIATES LLP
HABERBUSH DAVID R.
ESTATE OF PAULA ROUSSOS
AWAD RANDALL M.
LEWIS BRISBOIS BISGAARD & SMITH LLP
WILK MICHAEL BARRY
2/10/2020: Judgment - JUDGMENT PROPOSED JUDGMENT IN FAVOR OF DEFENDANTS DAVID HABERBUSH AND HABERBUSH & ASSOCIATES, LLP
2/5/2020: Order - ORDER RE DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
2/5/2020: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore
1/28/2020: Request for Judicial Notice
1/8/2020: Minute Order - MINUTE ORDER (COURT ORDER)
12/27/2019: Proof of Personal Service
11/8/2019: Declaration - DECLARATION OF DAVID HABERBUSH
11/8/2019: Declaration - DECLARATION OF MICHAEL WILK
9/24/2019: Order - ORDER RE EX PARTE TO CONTINUE TRIAL
9/24/2019: Minute Order - MINUTE ORDER (HEARING ON EX PARTE APPLICATION EX PARTE APPLICATION)
6/11/2019: Proof of Service by Mail
5/17/2019: Notice - NOTICE COMPENDIUM OF EXHIBITS IN SUPPORT OF DEFENDANT DAVID HABERBUSH'S MOTION TO COMPEL FURTHER RESPONSES OF PLAINTIFF THEODOSIOS ROUSSOS TO FORM INTERROGATORIES
1/23/2019: Proof of Service (not Summons and Complaint)
1/31/2019: Declaration in Support of Attorney's Motion to Be Relieved as Counsel-Civil
2/8/2019: Notice Re: Continuance of Hearing and Order
8/27/2018: ANSWER TO PLAINTIFFS' FIRST AMENDED COMPLAINT BY DEFENDANTS DAVID HABERBUSH AND HABERBUSH & ASSOCIATES, LLP
3/6/2018: CASE MANAGEMENT STATEMENT -
11/29/2017: NOTICE OF CASE MANAGEMENT CONFERENCE
Docketat 08:30 AM in Department 50, Teresa A. Beaudet, Presiding; Hearing on Motion for Terminating Sanctions - Not Held - Taken Off Calendar by PartyRead MoreRead Less
Docketat 08:30 AM in Department 50, Teresa A. Beaudet, Presiding; Nunc Pro Tunc OrderRead MoreRead Less
Docketat 08:30 AM in Department 50, Teresa A. Beaudet, Presiding; Hearing on Motion for Judgment on the Pleadings - Not Held - Advanced and VacatedRead MoreRead Less
Docketat 3:00 PM in Department 50, Teresa A. Beaudet, Presiding; Non-Appearance Case Review (submission of judgment) - Not Held - Vacated by CourtRead MoreRead Less
Docketat 09:30 AM in Department 50, Teresa A. Beaudet, Presiding; Jury Trial - Not Held - Advanced and VacatedRead MoreRead Less
DocketJudgment (PROPOSED JUDGMENT IN FAVOR OF DEFENDANTS DAVID HABERBUSH AND HABERBUSH & ASSOCIATES, LLP); Filed by David R. Haberbush (Defendant); Haberbush & Associates, LLP (Defendant)Read MoreRead Less
DocketOrder Appointing Court Approved Reporter as Official Reporter Pro TemporeRead MoreRead Less
DocketOrder (re Defendants' motion for summary judgment)Read MoreRead Less
Docketat 09:30 AM in Department 50, Teresa A. Beaudet, Presiding; Final Status Conference - Not Held - Advanced and VacatedRead MoreRead Less
Docketat 08:30 AM in Department 50, Teresa A. Beaudet, Presiding; Trial Setting Conference - HeldRead MoreRead Less
DocketCase Management Statement; Filed by Theodosios Roussos (Plaintiff)Read MoreRead Less
DocketProof of Service (not Summons and Complaint); Filed by Theodosios Roussos (Plaintiff)Read MoreRead Less
DocketProof of Service (not Summons and Complaint); Filed by Theodosios Roussos (Plaintiff)Read MoreRead Less
DocketPROOF OF SERVICE OF SUMMONSRead MoreRead Less
DocketPROOF OF SERVICE OF SUMMONSRead MoreRead Less
DocketNOTICE OF CASE MANAGEMENT CONFERENCERead MoreRead Less
DocketNotice of Case Management Conference; Filed by ClerkRead MoreRead Less
DocketCOMPLAINT DEMAND FOR JURY TRIALRead MoreRead Less
DocketComplaint; Filed by Theodosios Roussos (Plaintiff)Read MoreRead Less
DocketSUMMONSRead MoreRead Less
Case Number: BC683395 Hearing Date: February 04, 2020 Dept: 50
theodosios roussos, et al.,
david r. haberbush, et al.
February 4, 2020
[TENTATIVE] ORDER RE:
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION OF ISSUES
Plaintiffs Theodosis Roussos (“Roussos”) and the Estate of Paula Roussos (the “Estate”) (jointly, “Plaintiffs”) filed this action on November 13, 2017 against Defendants David R. Haberbush (“Haberbush”) and Haberbush & Associates, LLP (jointly, “Defendants”). The operative First Amended Complaint (“FAC”) was filed on July 2, 2018. Plaintiffs assert causes of action for legal malpractice, breach of fiduciary duty, and unfair competition.
Defendants now move for summary judgment or, in the alternative, summary adjudication of each of the causes of action. Plaintiffs oppose.
The Court grants Defendants’ request for judicial notice as to Items 1 through 31 and Defendants’ supplemental requests for judicial notice as to Items 32 through 47.
The Court rules on Defendants’ evidentiary objections as follows:
Objection 1: sustained
Objection 2: sustained
Objection 3: sustained
“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. (Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)
When a defendant seeks summary judgment, he/she must show either (1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).)
Allegations of the FAC
Roussos and his late wife, Paula, were involved in various business disputes with Roussos’s brother Harry and Harry’s wife, Chrysse. (FAC, ¶ 7.) Roussos and Harry are co-trustees of two trusts, the S.M.B. Investor Associates Irrevocable Trust Dated March 31, 1994 (the “SMB Trust”) and The O.F. Enterprises Trust Dated March 31, 1993 (the “OF Trust”) (jointly, the “Trusts”). (FAC, ¶ 8.) The SMB Trust is a limited partner in S.M.B. Investor Associates, L.P. (“SMBLP”), and the general partner in SMBLP is S.M.B. Management, Inc. (“SMB Management”). (FAC, ¶ 9.) The OF Trust is a limited partner in O.F. Enterprises, L.P. (“OFLP”), and the general partner in OFLP is Liro, Inc. (“Liro”).
Defendants provided legal representation to both Roussos and Harry over the years. (FAC, ¶ 11.) Haberbush was also president of SMB Management and Liro “at all times relevant.” (FAC, ¶ 12.) When disputes between the brothers arose and legal action taken (such as by litigation, arbitration, or other legal proceedings), Defendants represented Plaintiffs. (FAC,
¶¶ 14-15.) By way of their representation, Defendants became privy to confidential, private, and privileged information concerning Plaintiffs, the Trusts, and the above-named corporate entities. (FAC, ¶ 16.)
In 1993, both brothers filed bankruptcy petitions, and their cases were jointly administered by the bankruptcy court. (FAC, ¶ 20.) As part of the bankruptcy proceedings, the brothers agreed to sell certain real property located in Los Angeles (the “Properties”) to SMBLP and OFLP. (FAC, ¶¶ 21-22.) The sales were approved by the bankruptcy court, and the brothers’ respective bankruptcy cases were closed in 2002. (FAC, ¶¶ 23, 26.)
In 2012, during litigation, Defendants disclosed to third parties the fact that Plaintiffs owned the Properties and had owned them since 1993. (FAC, ¶ 27.) As a result of this disclosure, which was done without Plaintiffs’ consent, one of the Roussos brothers’ original creditors, Lula Michaelides (“Michaelides”), moved to reopen their bankruptcy cases on the grounds that the brothers had defrauded creditors and the bankruptcy court because the sale of the Properties was not done at arms-length. (FAC, ¶¶ 29-30.) The bankruptcy cases were reopened, and the Properties were subsequently sold in “fire sales.” (FAC, ¶ 33.) Plaintiffs also settled with Michaelides for $11 million. (FAC, ¶ 33.)
Plaintiffs allege that Defendants’ 2012 disclosure constitutes a breach of the duty of loyalty and confidentiality owed by Defendants to Plaintiffs, and that such breach caused Plaintiffs to incur damages (primarily, the reopening of Roussos’s bankruptcy case). (FAC,
¶¶ 33, 36.) Plaintiffs also allege that Defendants breached their duty of loyalty by representing both Roussos brothers (and their respective wives) when the brothers’ interests were adverse. (FAC, ¶¶ 37-38.) Plaintiffs allege that Haberbush also had a conflict of interest because of his position as an officer of SMB Management and Liro. (FAC, ¶ 37.)
In moving for summary judgment, Defendants make the following contentions: (1) Plaintiffs have no standing (and the Estate is not a proper plaintiff in any event), (2) Plaintiffs’ claims are barred by the statute of limitations, (3) Defendants’ disclosures were legally permissible, and (4) Plaintiffs cannot establish that Defendants’ disclosures were the cause in fact of Plaintiffs’ damages.
The Court begins with the question of whether the Estate may maintain any causes of action against Defendants. Defendants argue that the Estate may not because it is not a proper plaintiff. “An ‘estate’ is not a legal entity and is neither a natural nor artificial person. It is merely a name to indicate the sum total of the assets and liabilities of a decedent, or of an incompetent, or of a bankrupt.” (Bright v. Western Air Lines, Inc. (1951) 104 Cal.App.2d 827, 828.) “An ‘estate’ can neither sue nor be sued.” (Id. at p. 829.) “Any litigation must be maintained by, or against, the executor or administrator of the estate.” (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1344, quoting Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2003) ¶ 2:126, p. 2-36; see also Code Civ. Proc., § 377.30 [“A cause of action that survives the death of the person entitled to commence an action or proceeding passes to the decedent’s successor in interest, subject to Chapter 1 (commencing with Section 7000) of Part 1 of Division 7 of the Probate Code, and an action may be commenced by the decedent’s personal representative or, if none, by the decedent’s successor in interest.”].)
Defendants submit evidence that Roussos is neither his late wife’s personal representative nor her successor in interest. (Defendants’ Undisputed Material Fact (“UMF”) 1.) Plaintiffs dispute this fact by pointing to Probate Code section 100, which provides that “[u]pon the death of a person who is married or in a registered domestic partnership, one-half of the community property belongs to the surviving spouse and the other one-half belongs to the decedent.” (Prob. Code, § 100, subd. (a).) Based on this, Plaintiffs contend that 50% of Paula Roussos’s estate vested in Roussos upon her death. (Response to UMF 1.) However, as noted by Defendants, there is no evidence of the existence of community property, nor is there evidence that Roussos is or was ever Paula Roussos’s personal representative or successor in interest. Therefore, the Court finds that Defendants have demonstrated that the Estate does not have standing to sue in this action, and that Plaintiffs have failed to raise a triable issue of fact as to the Estate’s standing.
Defendants also contend that Plaintiffs generally lack standing because Plaintiffs seek damages for loss or diminishment of value of the Properties even though the Properties are actually owned by the Trusts or the partnerships. Even so, Defendants overlook the allegation that Plaintiffs paid out an $11 million settlement to Michaelides as a result of Defendants’ misconduct. Defendants offer no evidence showing that the $11 million payment was made by anyone other than Plaintiffs. Therefore, the Court finds that Defendants have failed to show that Plaintiffs lack standing to proceed with this lawsuit.
Next, the Court considers the issue of causation. A legal malpractice claim has four elements: “(1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney’s negligence.” (Namikas v. Miller (2014) 225 Cal.App.4th 1574, 1581.) Causation is “ordinarily a question of fact” that “cannot be resolved by summary judgment.” (Kurinij v. Hanna & Morton (1997) 55 Cal.App.4th 853, 864.) “The issue of causation may be decided as a question of law only if, under undisputed facts, there is no room for a reasonable difference of opinion.” (Ibid.)
“It is reasonably well settled…that the causation inquiry has two facets: whether the defendant’s conduct was the ‘cause in fact’ of the injury; and, if so, whether as a matter of social policy the defendant should be held legally responsible for the injury.” (Kumaraperu v. Feldsted (2015) 237 Cal.App.4th 60, 68.) “To determine causation in fact, California has adopted the substantial factor test set forth in the Restatement Second of Torts, section 431.” (Ibid.) “An event will be considered a substantial factor in bringing about harm if it is ‘recognizable as having an appreciable effect in bringing it about.’” (Ibid., quoting Rest.2d Torts, § 433, com. (d); see also Yanez v. Plummer (2013) 221 Cal.App.4th 180, 187 [“A defendant’s negligent conduct may combine with another factor to cause harm; if a defendant’s negligence was a substantial factor in causing the plaintiff’s harm, then the defendant is responsible for the harm; a defendant cannot avoid responsibility just because some other person, condition, or event was also a substantial factor in causing the plaintiff’s harm; but conduct is not a substantial factor in causing harm if the same harm would have occurred without that conduct.”].)
Defendants contend that Plaintiffs cannot show that “but for” Defendants’ disclosures in 2012, Roussos’s bankruptcy case would not have been reopened.
The disclosures at issue are two declarations signed by Haberbush; the first on August 15, 2012 and the second on August 23, 2012. (UMF 3.) The declarations were filed in an action to compel arbitration of certain disputes that had arisen between the Roussos brothers. Specifically, Harry Roussos (and his wife) filed a petition to compel arbitration on June 19, 2012 in Los Angeles Superior Court (the “Arbitration Action”). (Defendants’ Ex. 23.) The Arbitration Action was based on the contention that the Roussos brothers (and their respective wives) had agreed to arbitrate their business disputes and that Haberbush would act as their arbitrator. Roussos (and his wife) opposed the petition to compel arbitration and attached a declaration from Roussos stating, among other things, that he did not jointly own any properties with his brother. (Defendants’ Ex. 22.) On August 15, 2012, Harry Roussos filed the first declaration by Haberbush, who stated, among other things, that he “acted as legal counsel” for the Roussos brothers and their wives as to “their business operations,” including the Properties. (Defendants’ Ex. 31.) Attached to this declaration was a letter (marked “Client Confidential”) from Roussos to Haberbush. (Defendants’ Ex. 31, Ex. A.) Roussos moved ex parte to seal and remove this letter from the public record. (Defendants’ Ex. 32.) On August 24, 2012, Harry Roussos filed the second Haberbush declaration in support of his opposition to Roussos’ ex parte application. (Defendants’ Exs. 34, 35.) In this second declaration, Haberbush set forth the reasons why he believed the letter attached as Exhibit A to his first declaration was not an attorney-client privileged communication. (Defendants’ Ex. 35.)
Plaintiffs’ position is that Haberbush’s 2012 declarations revealed to Michaelides that the Roussos brothers had engaged in fraud in the sale of the Properties during the bankruptcy proceedings. (FAC, ¶¶ 27, 29.) But Defendants point to many other filings made in the Arbitration Action, both by Roussos himself and by his brother Harry, that revealed the same information. The petition to compel arbitration itself stated that “Harry and Ted have jointly owned and operated the Roussos Businesses that now includes several multi-family rental properties involved [sic] 6 properties on the west side of Los Angeles worth in excess of $10 million.” (Defendants’ Ex. 23, p. 3:15-17.) In Harry Roussos’s declaration supporting the petition, he states that he and Roussos together “own and operate various multi-family rental properties in Los Angeles” and that, along with Roussos, he was a “co-owner of a series of real estate properties on the west side of Los Angeles.” (Defendants’ Ex. 23, Harry Roussos Decl.,
¶¶ 2-3.) Included with the petition was another declaration signed by counsel for Harry Roussos in the Arbitration Action. (Defendants’ Ex. 23, S.V. Stuart Johnson Decl., ¶ 1.) Mr. Johnson attached as Exhibit B to his declaration a letter dated April 2, 2012 from Mr. Johnson to Thomas A. Nitti. (Defendants’ Ex. 23, S.V. Stuart Johnson Decl., ¶ 2, Ex. B.) The April 2, 2012 letter was a demand for arbitration (evidently, Roussos and his wife were represented by Mr. Nitti at the time) and included a reference to dissolution of S.M.B. Associates, LP, Liro, Inc., OF Management LP, and “any related or affiliated entities, and distribution of all assets managed by those entities to Harry and Ted per their respective ownership interests in said entities.” (Defendants’ Ex. 23, S.V. Stuart Johnson Decl., ¶ 2, Ex. B.)
Defendants submit evidence that, in moving to reopen the Roussos brothers’ bankruptcy cases, the United States Trustee relied on the following documents: (1) the April 2, 2012 demand for arbitration from Mr. Johnson to Mr. Nitti, (2) the August 15, 2012 Haberbush declaration and its attachment, and (3) the August 24, 2012 Haberbush declaration and its attachments. (Defendants’ Ex. 54, Jill M. Sturtevant Decl.) On July 22, 2015, Michaelides filed a joinder to the United States Trustee’s motion to reopen the Roussos brothers’ bankruptcy cases. (Defendants’ Ex. 55.) In that joinder motion, Michaelides also identifies the same documents as evidence of the Roussos brothers’ fraud. (Defendants’ Ex. 55, p. 3:2-13; Weinberg Decl., ¶ 7.) Based on this evidence, Defendants argue that Plaintiffs cannot show that “but for” the Haberbush declarations, Michaelides and the United States Trustee would not have proceeded with reopening of the Roussos’s bankruptcy cases. In other words, even assuming that Haberbush had breached a duty of confidentiality by his 2012 declarations (which the Court notes that Haberbush disputes), Defendants maintain that the same harm would have occurred if Haberbush had not submitted anything in the Arbitration Action.
The Court notes that the only new evidence offered by Plaintiffs in rebuttal is Roussos’s own declaration. (Response to UMF 53.) However, nothing in Roussos’s declaration establishes the existence of a triable issue of fact as to the causation issue. Plaintiffs also attempt to re-frame their claims by contending that “the issues herein are not the actual disclosures as such” but rather “the fraudulent statements in the declarations by HARRY as to who owns the property.” (Opp’n, p. 4:18-19.) Plaintiffs argue that Haberbush’s malpractice was in allowing Harry Roussos to represent to the court that he co-owned the Properties. Nevertheless, as pointed out by Defendants in reply, this theory of liability is not alleged in the FAC, nor is it set forth in Plaintiffs’ responses to contention interrogatories. (Wilk Decl., ¶ 10; Defendants’ Exs. 8-9.) Accordingly, the Court finds that Defendants have met their burden of showing that the legal malpractice cause of action has no merit because Plaintiffs cannot establish the causation element of the claim. The Court further finds that Plaintiffs have failed to show that a triable issue of fact exists as to the causation element. Because causation is also an essential element of the breach of fiduciary duty claim, the Court finds that Defendants have met their burden of showing that the breach of fiduciary duty cause of action has no merit because Plaintiffs cannot establish causation, and that Plaintiffs have failed to raise a triable issue of fact thereto. (See Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1101, superseded by statute on other grounds as stated in Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 396 [“In order to plead a cause of action for breach of fiduciary duty, there must be shown the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.”].) Finally, because the unfair competition cause of action is derivative of the legal malpractice and breach of fiduciary duty causes of action, it is similarly subject to summary judgment. (Krantz v. Bt Visual Images (2001) 89 Cal.App.4th 164, 178 [a derivative claim under section 17200 “stand[s] or fall[s] depending on the fate of the antecedent substantive causes of action”].)
Because the Court finds that Defendants have demonstrated their entitlement to summary judgment on the causation issue, the Court finds it unnecessary to consider the merits of Defendants’ remaining arguments.
Based on the foregoing, Defendants’ motion for summary judgment is granted.
The Court orders Defendants to file and serve a proposed form of judgment within 10 days of the date of this order.
Defendants are ordered to give notice of this ruling.
DATED: February 4, 2020 ________________________________
Hon. Teresa A. Beaudet
Judge, Los Angeles Superior Court
 The Court overrules the objection filed by Plaintiffs to the supplemental requests. Although the Court has granted the request for judicial notice, the determination herein would be the same even if the request had been denied.
 When the bankruptcy court originally approved the sale of the Properties to SMBLP and OFLP, the Roussos brothers had submitted declarations signed under penalty of perjury that they had no interest of any kind in SMBLP and OFLP. (UMF 8.)
Case Number: BC683395 Hearing Date: January 07, 2020 Dept: 50
NO APPEARANCE IS NECESSARY TOMORROW. THE REQUISITE DECLARATION HAS BEEN FILED.
Case Number: BC683395 Hearing Date: December 10, 2019 Dept: 50
BECAUSE THE REQUISITE SUMMARY JUDGMENT BINDERS WERE NOT DELIVERED TO THE COURT UNTIL DECEMBER 9TH, THE DAY BEFORE THE HEARING, THE MATTER WILL NOT BE HEARD TOMORROW AND WILL BE RESET FOR A DATE NEXT YEAR. THE CLERK WILL CONTACT THE PARTIES TO DISCUSS NEW DATES FOR THE MSJ. DEFENDANTS ARE ORDERED TO GIVE NOTICE.