Case Number: KC070477 Hearing Date: October 01, 2018 Dept: J

Re: Edward Eugene West, et al. v. Joann Jackson Kalama (KC070477)

(1) DEMURRER TO COMPLAINT; (2) MOTION TO STRIKE PORTIONS OF COMPLAINT

Moving Party: Defendant Joann Jackson Kalama

Respondents: Plaintiffs Edward Eugene West and Murl Wayne West

POS: Moving OK; Opposing OK; Replies OK

The complaint, filed 7/19/18, asserts a Negligence cause of action against defendant and Does 1-25.

A Case Management Conference is set for 12/6/18.

(1) DEMURRER:

Defendant Joann Jackson Kalama (“defendant”) demurs, per CCP § 430.10(e), to Plaintiffs Edward Eugene West’s and Murl Wayne West’s complaint, on the basis that it fails to state facts sufficient to constitute a cause of action.

MEET AND CONFER:

At the outset, the court determines that defendant’s counsel conducted a sufficient meet and confer. Defendant’s counsel sent a meet and confer letter to opposing counsel via email and mail on 8/10/18 which, inter alia, requested a response by 8/16/18 and referenced defendant’s 8/22/18 deadline to respond to the complaint. (Traylor 8/22/18 Decl., ¶ 2, Exh. A). Plaintiffs’ counsel advises that he started trial in another matter on 8/10/18, which lasted almost two weeks, and that once trial ended, he emailed defendant’s counsel to let them know they could have an extension of time to respond to the complaint while plaintiffs substantively responded to the letter, but was advised that defendant had already filed the demurrer and motion to strike. (Horning Decl., ¶¶ 3 & 4). Defendant filed her demurrer and motion to strike on 8/22/18 after not having received any response from plaintiff’s counsel by that date. (Traylor 9/24/18 Decl., ¶ 3).

REQUEST FOR JUDICIAL NOTICE:

Defendants’ request for judicial notice is Granted as to Exhibit “B.” The court declines to otherwise consider defendant’s request for failure to comply with California Rules of Court Rule 3.1306(c) (i.e., “[a] party requesting judicial notice of material under Evidence Code sections 452or 453 must provide the court and each party with a copy of the material. If the material is part of a file in the court in which the matter is being heard, the partymust: (1) Specify in writing the part of the court file sought to be judicially noticed; and (2) Either make arrangements with the clerk to have the file in the courtroom at the time of the hearing or confirm with the clerk that the file is electronically accessible to the court”).

Plaintiffs are the stepsons of the deceased Gladys Lorraine West (“Gladys”). (Complaint, ¶ 7). On 12/10/93, Gladys and her husband, Carroll Wayne West, created the “Trust Agreement of Carroll Wayne West and Gladys Lorraine West December 10, 1993 Family Trust” (“Trust”) (Id., ¶ 8). The Trust named plaintiffs as beneficiaries of a combined 50% interest in the Trust assets. (Id., ¶ 9). The Trust also named Gladys’ daughter, Loretta Bourne (“Loretta”), as the beneficiary of the remaining 50% interest in the Trust Assets. (Id.). Per the terms of the Trust, on the death of the first spouse, the assets of the Trust Would be divided into an Exemption Trust and a Survivor’sTrust. (Id., ¶ 9; see also RJN, Exh. B(A), ¶ 5.1).

The Trust allows the surviving spouse to bequeath any and all assets held in the Survivor’s Trust as he or she deems appropriate. (RJN, Exh. B(A), ¶ 7.1). Upon the surviving spouse’s death, the trustee is to distribute the survivor’s trust assets based on any terms and conditions that the surviving spouse dictated. (Id.). If not all of the survivor’s trust property is otherwise disposed of, the trustee is then directed to distribute the remaining assets to the exemption trust. (Id., ¶ 7.2).

Upon Carroll’s death, Gladys retained defendant, who prepared a “First Amendment and Exercise of Power of Appointment, Survivor’s Trust of Carroll Wayne West and Gladys Lorraine West December 10, 1993 Family Trust” (“Survivor’s Trust”) as well as the “Action Taken by Gladys Lorraine West, Trustee of the Carroll Wayne West and Gladys Lorraine West December 10, 1993 Family Trust, Allocation to Subtrusts” (“Allocation”) (Complaint, ¶¶ 17, 22 and 28). The Survivor’s Trust was drafted so that the beneficiary of the Survivor’s Trust was Loretta. (Id., ¶ 24). On 10/21/16, Gladys died. (Id., ¶ 32).

Plaintiffs allege that defendant had a conflict of interest when she represented Gladys in drafting the Survivor’s Trust and Allocation. (Id., ¶¶ 13-21). This conflict of interest purportedly included representing Loretta and Gladys at the same time with respect to these instruments, and subsequently representing Loretta and Loretta’s spouse, Gary Bourne (“Gary”), with respect to their conservatorship over Gladys. (Id.). Plaintiffs allege defendant failed to get conflicts waivers in these situations. (Id.). Plaintiffs allege that because of the alleged conflicts, they suffered damages. (Id., ¶¶ 39-43). They also allege that because of Gladys’ purported capacity issues, defendant’s representation should never have proceeded. (Id., ¶ 21).

Plaintiffs appear to lack standing to sue defendant. “Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.” CCP § 367. “Where the complaint shows the plaintiff does not possess the substantive right or standing to prosecute the action, ‘it is vulnerable to a general demurrer on the ground that it fails to state a cause of action.’” Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 955 (citation omitted).

“[A]n attorney will normally be held liable for malpractice only to the client with whom the attorney stands in privity of contract, and not to third parties.” Borissoff v. Taylor & Faust (2004) 33 Cal.4th 523, 529. One exception is where the non-client was the intended beneficiary of the attorney’s services. Lucas v. Hamm (1961) 56 Cal.2d 583. “An essential predicate for establishing an attorney’s duty of care under an ‘intended beneficiary’ theory is that both the attorney…and the client…must have intended [the claimant] to be the beneficiary of legal services [the attorney] was to render.” Zenith Ins. Co. v. O’Connor (2007) 148 Cal.App.4th 998, 1008 (emphasis theirs).

This exception is also limited to situations where there is a legal defect in drafting a document which prevents the document from accomplishing the client’s intent. Chang v. Lederman (2009) 172 Cal.App.4th 67, 84. In Chang, the Second District, Division Seven, Court of Appeal determined that not only does the beneficiary have to be an intended beneficiary, but the intent to benefit that person must be apparent from the face of the document itself: “to hold an attorney owed a duty of care not only to his or her testator client but also to an intended beneficiary, the testator’sintent must be ‘expressed and formalized in [a] signed will.’” Id. at 80, citing Osornio v. Weingarten (2004) 124 Cal.App.4th 304, 316 (emphasis theirs); see also Boranian v. Clark (2004) 123 Cal.App.4th 1012, 1018 (i.e., “liability to a third party will not be imposed where there is a substantial question about whether the third party was in fact the decedent’s intended beneficiary…” (emphasis theirs)).

Plaintiffs’ claims arise out of defendant’s representation of Gladys in drafting the Survivor’s Trust and Allocation. There are no allegations that the Survivor’s Trust or the Allocation were negligently drafted. Plaintiffs, moreover, do not allege that they were intended to be beneficiaries of the Survivor’s Trust which defendant was retained to prepare. As such, plaintiffs appear to lack standing.

Additionally, to establish a claim for professional negligence, “a party must show ‘(1) the duty of the professional to use such skill, prudence and diligence as other members of the profession commonly possess and exercise; (2) breach of that duty; (3) a causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional negligence.” Giacometti v. Aulla, LLC (2010) 187 Cal.App.4th 1133, 1137, citing Nichols v. Keller (1993) 15 Cal.App.4th 1672, 1682. “The threshold element of a cause of action for negligence is the existence of a duty to use due care toward an interest of another that enjoys legal protection against unintentional invasion.” Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 397. “[T]he existence of the attorney’s duty of care owing to the plaintiff [in a professional negligence claim] is generally a question of law that may be addressed by demurrer.” Osornio, supra, 124 Cal.App.4th at 319.

Again, as stated above, plaintiffs have not alleged that they were intended beneficiaries of defendant’s legal services. Defendant, moreover, had no duty under Morales v. Field, De Goff, Huppert & MacGowan (1979) 99 Cal.App.3d 307 to plaintiffs to give notice that she was preparing the Survivor’s Trust and Allocation. In Morales, plaintiff’s mother died, and in her will left her separate property to a testamentary trust of which her husband was life beneficiary and plaintiff was the remainderman. A bank was named executor and trustee, and to represent it in that capacity, it retained defendant law firm who had been plaintiff’s family attorneys for many years and who had drafted the mother’s will. Plaintiff alleged that defendants breached a duty owing to her as a beneficiary of the estate when defendants made the mother’s estate a guarantor of a loan to a corporation (which originally had been guaranteed by the mother and which was being refinanced) without notification to plaintiff and without disclosing to her and to the probate court which approved the transaction that defendants represented not only the executor but also the corporation and its three shareholders which included plaintiff’s father. The First District, Division Three, Court of Appeal held that the failure of defendants to disclose their dual representation to the court constituted extrinsic fraud, and thus the court order settling the first account did not preclude plaintiff by res judicata from alleging that defendants breached their duty to her. The court further held that defendants owed a duty to plaintiff to disclose their dual representation, and that, as such, the trial court erred in sustaining the demurrer. There is nothing under Morales which would have required defendant to notify plaintiffs, who were not intended beneficiaries of defendant’s legal services, of her alleged dual representation of Loretta and Gladys.

Plaintiffs’ reliance on Biakanja v. Irving (1958) 49 Cal.2d 647 and Lucas, supra, 56 Cal.2d 583 is unavailing, because these rulings fall squarely within the limitation on malpractice actions referenced above: “[A]n attorney may be held liable to the testamentary beneficiaries only if the [Biakanja/Lucas] test is fully met, that is, if due to the attorney’s professional negligence the testamentary intent expressed in the will is frustrated and the beneficiaries clearly designated by the testator lose their legacy as a direct result of such negligence.” Ventura County Humane Society v. Holloway (1974) 40 Cal.App.3d 897, 903 (emphasis omitted). Again, plaintiffs were not intended beneficiaries.

Additionally, defendant had no duty to ascertain Gladys’ testamentary capacity or the existence of undue influence. See Moore v. Anderson Zeigler Disharoon Gallagher & Gray (2003) 109 Cal.App.4th 1287 (i.e., “an attorney preparing a will for a testator owes no duty to the beneficiary of the will or to the beneficiary under a previous will to ascertain and document the testamentary capacity of the client” [emphasis theirs]); see also Boranian, supra, 123 Cal.App.4th at 1019 (i.e., “the scope of duty owed to the beneficiary is determined by reference to the attorney-client relationship. The primary duty is owed to the testator-client, and the attorney’s paramount obligation is to serve and carry out the intention of the testator. Where…the extension of that duty to a third party could improperly compromise the lawyer’s primary duty of undivided loyalty by creating an incentive for him to exert pressure on his client to complete her estate planning documents summarily, or by making him the arbiter of a dying client’s true intent, the courts simply will not impose that insurmountable burden on the lawyer” [emphasis theirs]).

The demurrer, then, is sustained.

(2) MOTION TO STRIKE:

Based upon the foregoing ruling on the demurrer, the motion to strike is moot.

The court will hear from counsel for plaintiffs as to whether leave to amend is requested, and will require an offer of proof if so.