Case Name:   Jeffrey McDonnell, et al. v. James E. Berge, et al.

Case No.:       1-14-CV-259529

 

After full consideration of the arguments, authorities, and papers submitted by each party, the court makes the following rulings:

 

This is a professional malpractice action arising out of the preparation of various testamentary documents for the decedent, Carmel A. McDonnell (“Carmel”) by defendants James E. Berge (“Mr. Berge”), an attorney who specializes in estate planning, trust, and probate law, and the Law Offices of Berge & Berge, LLP (collectively “Defendants”).[1]  Carmel owned and resided in a house located at 300 Laidley, San Francisco, California.  (SAC, ¶ 8.)  Carmel’s brother, Edward McDonnell (“Edward”), lived with Carmel in her home. (SAC, ¶ 9.)  Edward was married to Jocelyn McDonnell (“Jocelyn”), and they are the parents of plaintiff Jeffrey McDonnell (“Jeffrey”).  (SAC, ¶¶ 9-10.)   Jeffrey is married to plaintiff Elizabeth McDonnell (“Elizabeth”), and plaintiff Mary McDonnell (“Mary”) is their daughter.  (SAC, ¶¶ 1-3, 8.)

 

On January 23, 2014, Jeffrey, Elizabeth, and Mary (collectively “Plaintiffs”) filed a complaint in instant action against Defendants.  On February 24, 2014, Plaintiffs filed a first amended complaint (“FAC”), alleging causes of action for: (1) professional negligence/legal malpractice (by Jeffrey and Mary); (2) breach of contract (by Jeffrey and Mary); (3) breach of fiduciary duty (by Mary); (4) deceit/suppression of fact (by Jeffrey and Mary); (5) constructive fraud (by Jeffrey and Mary); (6) elder financial abuse (by Mary); (7) negligent infliction of emotional distress (by Jeffrey and Elizabeth); and (8) tort of another (by Jeffrey and Elizabeth).

 

Subsequently, Defendants demurred to the FAC.  On May 13, 2014, the court (Hon. James L. Stoelker) sustained Defendants’ demurrer as to the first, fourth, fifth, sixth, and eighth causes of action, with 10 days’ leave to amend.  (Order Re: Demurrer to the First Amended Complaint, p. 1:26-26, 2:1-2, 2:15-17, 3:21-23, 4:7-8, 4:13-15, 4:19-21, 5:2-4, 5:26-27, 6:11-3.)  In addition, the court sustained the demurrer and to the third and seventh causes of action, without leave to amend.  (Order Re: Demurrer to the First Amended Complaint, p. 3:14-16, 5:21-23.)  Finally, the court overruled the demurrer to the second cause of action as to Jeffrey and sustained the demurrer, with 10 days’ leave to amend, as to Mary.  (Order Re: Demurrer to the First Amended Complaint, p. 3:1-2, 3:8-10.)

 

On May 27, 2014, Plaintiffs filed the operative second amended complaint (“SAC”), alleging causes of action for: (1) professional negligence/legal malpractice (by Mary); (2) breach of contract (by Jeffrey and Mary); (4) deceit/suppression of fact (by Jeffrey); (5) constructive fraud (by Jeffrey); (6) elder financial abuse (by Mary); and (8) tort of another (by Jeffrey and Elizabeth).[2]

 

Defendants demur to each of the causes of action in the SAC on the ground of failure to allege sufficient facts to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)  In addition, Defendants also demur to the first, second, and sixth causes of action on the ground of lack of the legal capacity to sue.  (See Code Civ. Proc., § 430.10, subd. (b).)

 

Defendants’ request for judicial notice is GRANTED.  (See Evid. Code, § 452, subd. (d) [a court may take judicial notice of court records]; see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters subject to judicial notice]; see also Evid. Code § 452, subd. (h) [ a court may take judicial notice of facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy].)  On its own motion, the Court takes judicial notice of the Application and Order for Appointment of Guardian ad Litem filed on May 30, 2014.

 

Defendants’ demurrer to the first cause of action for professional negligence/legal malpractice is SUSTAINED, without leave to amend.  The Court finds that this case is analogous to Chang v. Lederman (“Chang”) (2009) 172 Cal.App.4th 67, and Defendants did not owe a duty to Mary because she was not expressly named as an intended beneficiary in the testamentary instrument at issue, the residence trust. (See Chang, supra, at pp. 71-72 [holding that under Biakanja v. Irving (1958) 49 Cal.2d 647 and Lucas v. Hamm (1961) 56 Cal.2d 583, a testator’s lawyer does not owe a duty of care to a non-client who alleges that she was an intended beneficiary of the testator’s estate in the absence of an executed will or trust instrument expressly reflecting the testator’s intent, even if the non-client was previously named in a will or trust instrument executed by the testator and the allegation is that the revised testamentary instrument does not accurately reflect the testator’s intent].)  The Court finds Plaintiffs’ request for leave to amended the first cause of action to assert that “Defendants should be equitably estopped from asserting Mary’s lack of standing using the Chang Court’s decision as a defense” to be unavailing.  (Opp’n., p. 10:23-27.)  Plaintiffs do not cite any legal authority that establishes that the Court may use the doctrine of equitable estoppel to essentially impose a duty upon Defendants where none exists under the law because Defendants purportedly violated ethical and/or legal duties that they owed to Carmel.

 

Defendants’ demurrer to the second cause of action for breach of contract as to Jeffrey and Mary is SUSTAINED, without leave to amend.  As a preliminary matter, Defendants’ demurrer to the second case of action as to Jeffrey is appropriate to the extent that it argues that Jeffrey did not allege that the contract was breached as to him because this  same ground was not considered by the court (Hon. James L. Stoelker) in its May 13, 2014 ruling. (See Berg & Berg Enterprises LLC v. Boyle (2009) 178 Cal. App. 4th 1020, 1035 [where a prior demurrer has been sustained as to some causes of action but overruled as to others, a defendant may not demur again on the same grounds to those portions of an amended pleading as to which the prior demurrer was overruled].)  Furthermore, Defendants argument is well-taken as the SAC alleges that the contract was breached “because [Defendants failed to create estate planning documents that contain [Carmel’s] testamentary intent],” (i.e., leaving the home to Mary).  (SAC, ¶ 45.)  It does not allege that Defendants breached the contract as to Jeffrey as there are no allegations that Carmel intended Jeffrey to receive something other than the $10,000 that was left to him.  Moreover, the SAC establishes that Jeffrey did in fact receive his request of $10,000.  (SAC, ¶ 26.)  Additionally, Mary fails to allege facts establishing that she is a third-party beneficiary to the attorney-client agreement between Carmel and Defendants because as articulated above, she has failed to allege facts establishing that she is an intended beneficiary of the residence trust.  (See Chang, supra, at pp. 71-72.)

 

Defendants’ demurrer to the fourth cause of action for deceit/suppression of fact on the ground of failure to allege sufficient facts to state a cause of action is SUSTAINED, without leave to amend.  Plaintiffs fail to allege sufficient facts to state a cause of action for deceit because the SAC does not allege any facts establishing that Jeffrey incurred any damages due to the alleged delay in filing the San Francisco litigation.  (See Philipson & Simon v. Gulsvig (2007) 154 Cal App 4th 347, 363 [an element of deceit is resulting damage].)  Here, the SAC alleges only that Jeffrey incurred expenses as a resulting of filing the San Francisco litigation, but Jeffrey would have incurred these expenses regardless of when he filed the San Francisco litigation.

 

Defendants’ demurrer to the fifth cause of action for constructive fraud on the ground of failure to allege sufficient facts to state a cause of action is SUSTAINED, without leave to amend.  Plaintiffs fail to allege facts sufficient to constitute a cause of action for constructive fraud because SAC does not allege that Jeffrey suffered any damages as a result of the alleged constructive fraud.  (SAC, ¶ 63 [“[a]s a direct result of the fraud of the Defendants as herein alleged, Plaintiff Mary has been damaged in an amount of $1,000,000.00.”]; see also Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498, 517, fn. 14 [a party alleging constructive fraud must show a resulting injury].)  Moreover, Plaintiffs’ argument that “all damages suffered by Mary were also suffered by Jeffrey” by virtue of the fact that Jeffrey was Mary’s guardian ad litem is without merit.  (See In re Christina B. (1993) 19 Cal.App.4th 1441, 1453 [“[a] guardian ad litem is not a party to the action, but merely a party’s representative, an officer of the court”]; see also In re Cochems’ Estate (1952) 110 Cal.App.2d 27, 29-30, “[a] guardian ad litem acts not in his own behalf when he seeks to have it established that the minors he represents are entitled to share in an estate, but strictly in their behalf and what is more as a representative of the court].)

 

Defendants’ demurrer to the sixth cause of action for elder financial abuse on the ground of failure to allege sufficient facts to state a cause of action is SUSTAINED, without leave to amend, as to Mary.  However, the Court grants Plaintiffs leave to amend the sixth cause of action to state a claim as to Jeffrey.  While Defendants are correct that the positions proffered by Plaintiffs are directly in conflict and will ultimately require a judicial determination, “[w]here the exact nature of the facts is in doubt, or where the exact legal nature of plaintiff’s right and defendant’s liability depend on facts not well known to the plaintiff, the pleading may properly set forth alternative theories in varied and inconsistent counts.” (Rader Co. v. Stone (1986) 178 Cal.App.3d 10, 29; see Adams v. Paul (1995) 11 Cal.4th 583, 593 [a party may plead in the alternative and make inconsistent allegations]; see also Crowley v. Katleman (1994) 8 Cal.4th 666, 690-691 [a party may plead alternative factual or legal theories when the pleader is in doubt as to which theory most accurately reflects the events and can be established by the evidence].) Additionally, while the purpose of Probate Code section 259 may not be served by allowing Plaintiffs to amend the SAC, it would appear to serve the purpose of Welfare and Institutions Code section 15610.30 under which this claim is brought.  (See Delaney v. Baker (1999) 20 Cal.4th 23, 33 [“[t]he purpose of the [Elder Abuse Act] is essentially to protect a particularly vulnerable portion of the population from gross mistreatment in the form of abuse and custodial neglect”].)

 

Defendants’ demurrer to the eighth cause of action for tort of another on the ground of failure to allege sufficient facts to state a cause of action is SUSTAINED, without leave to amend, as to Elizabeth.  Defendants’ demurrer to the eighth cause of action for tort of another on the ground of failure to allege sufficient facts to state a cause of action is OVERRULED as to Jeffrey. As indicated above, Plaintiffs are given leave to amend the sixth cause of action for elder financial abuse so as to state a claim as to Jeffrey and, thus, Jeffrey’s claim for tort of another may survive based upon the sixth cause of action as amended.  (See Sooy v. Peter (1990) 220 Cal.App.3d 1305, 1310[the “tort of another” doctrine is an issue of damages and not a cause of action and nearly all of the cases which have applied the doctrine involve a clear violation of a traditional tort duty between the tortfeasor who is required to pay the attorney fees and the person seeking compensation for those fees].)