Bic D. Pho v. Eric J. Sidebotham

Case Name: Bic D. Pho v. Eric J. Sidebotham, et al.

Case No.: 17CV319765

(1) Defendants Eric J. Sidebotham, Parr Law Group, and Shawn R. Parr’s Demurrer to the First Amended Complaint
(2) Defendants Eric J. Sidebotham, Parr Law Group, and Shawn R. Parr’s Motion to Strike Portions of the First Amended Complaint

Factual and Procedural Background

Defendants Shawn R. Parr (“Parr”), a lawyer, and Parr Law Group (“PLG”), a law firm, represented plaintiff Bic D. Pho (“Pho”) in approximately 50 litigation matters and dozens of transactional matters, personal and business, from 2000 to 2006. (First Amended Complaint (“FAC”), ¶8.) Defendant Parr provided professional advice to plaintiff Pho in May 2016. (FAC, ¶9.) In the course of representing plaintiff Pho, defendant Parr extensively reviewed plaintiff Pho’s personal and financial records, obtaining confidential information about plaintiff Pho. (FAC, ¶¶14 – 19.)

Defendants Parr, PLG, and Eric J. Sidebotham (“Sidebotham”) subsequently represented parties with interests directly adverse to plaintiff Pho in a case entitled Bic D. Pho, et al. v. Eastwest Trading Co., LLC, et al., Santa Clara County Superior Court case number 16CV300343 (“Eastwest Action”). (FAC, ¶¶20 – 21.) Defendants PLG and Sidebotham did not check for conflicts and refused to do so. (FAC, ¶22.) Confidential information defendant Parr obtained from plaintiff Pho is relevant to issues in the Eastwest Action. (FAC, ¶¶24 – 28.) Defendants Parr, PLG, and Sidebotham continued to represent interests adverse to plaintiff Pho in the Eastwest Action even after the filing of a motion to disqualify. (FAC, ¶33.) On March 13, 2017, the court granted the motion to disqualify defendant PLG from representing the defendants in the Eastwest Action. (FAC, ¶34.)

Defendants Parr, PLG, and Sidebotham also represented interests adverse to plaintiff Pho in an action entitled Vy Nguyen v. Bic Pho, et al., Santa Clara County Superior Court case number 17CV304812 (“Nguyen Action”). (FAC, ¶35.) Defendants Sidebotham, PLG, and Parr were again notified of the conflict of interest and plaintiff Pho’s objection to defendants’ representation of adverse interests in the Nguyen Action. (FAC, ¶36.) On March 21, 2017, the court granted a motion to disqualify defendant PLG from representing interests adverse to plaintiff Pho in the Nguyen Action. (FAC, ¶38.)

On November 29, 2017, plaintiff Pho filed a complaint against defendants Sidebotham, PLG, and Parr asserting claims for (1) breach of fiduciary duty and (2) professional negligence.

On October 29, 2018, defendants Sidebotham, PLG, and Parr filed a demurrer and motion to strike portions of plaintiff Pho’s complaint prompting plaintiff Pho to file the operative FAC on January 11, 2019. The FAC continues to assert claims for: (1) breach of fiduciary duty and (2) professional negligence.

On March 25, 2019, defendants Sidebotham, PLG, and Parr filed the two motions now before the court, a demurrer and motion to strike portions of the FAC.

I. Defendants’ demurrer to the FAC.

A. Defendant Sidebotham’s demurrer to the first cause of action in plaintiff Pho’s FAC [breach of fiduciary duty] is OVERRULED.

“To establish a cause of action for breach of fiduciary duty, a plaintiff must demonstrate the existence of a fiduciary relationship, breach of that duty and damages.” (Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1509.) “The relation between attorney and client is a fiduciary relation of the very highest character.” (Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 189.)

Defendant Sidebotham demurs to the first cause of action for breach of fiduciary duty by arguing that he did not have a fiduciary relationship with plaintiff Pho. Defendant Sidebotham directs the court’s attention to the FAC which alleges only that defendants Parr and PLG represented plaintiff Pho between 2000 and 2006 and that defendant Parr provided professional advice to plaintiff Pho in May 2016. (See FAC, ¶¶8 – 9.)

The issue posed here is whether defendant Sidebotham owes a fiduciary duty to a former client of the firm where he is employed. Defendant Sidebotham is alleged to be an attorney working at the office of defendant PLG. (See FAC, ¶22.) An attorney’s duty to preserve the confidences of his client is owed to both present and former clients and only the client can release the attorney from that obligation. (Commercial Standard Title Co., Inc. v. Superior Court (1979) 92 Cal.App.3d 934, 945.)

“It is well settled that an attorney is prohibited from doing either of two things after severing a relationship with a former client. ‘ “… He may not do anything which will injuriously affect his former client in any manner in which he formerly represented him nor may he at any time use against his former client knowledge or information acquired by virtue of the previous relationship.” ’ [Citations omitted.] The purpose of the rule is to protect both confidential communications and the enduring confidential relationship between attorney and client. [Citations omitted.]

(In re Marriage of Zimmerman (1993) 16 Cal.App.4th 556, 562.)

This court sees no reason why the fiduciary duty to preserve a former client’s confidences does not extend to an attorney who subsequently joins a law firm. Defendant Sidebotham cites no legal authority to suggest otherwise.

Accordingly, defendant Sidebotham’s demurrer to the first cause of action in plaintiff Pho’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of fiduciary duty is OVERRULED.

B. Defendants’ demurrer to the second cause of action in plaintiff Pho’s FAC [professional negligence] is OVERRULED.

“In order to establish a cause of action for legal malpractice the plaintiff must demonstrate: (1) breach of the attorney’s duty to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a proximate causal connection between the negligent conduct and the resulting injury; and (3) actual loss or damage resulting from the negligence.” (Carlton v. Quint (2000) 77 Cal.App.4th 690, 699; see also CACI No. 600.)

Defendants, collectively, demur to the second cause of action by arguing that there must be an attorney-client relationship in order for a duty to be owed. Defendants cite Borissoff v. Taylor & Faust (2004) 33 Cal.4th 523, 529 for the proposition that, “an 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.” Defendants’ reliance on Borisoff is inapposite. Defendants concede the FAC alleges the existence of an attorney-client relationship between plaintiff Pho and defendants Parr and PLG. Instead, what defendants actually argue is that the attorney-client relationship between plaintiff Pho and defendants Parr and PLG ended in 2006 and because there is no longer an ongoing attorney-client relationship, there is no longer a duty owed to plaintiff Pho.

As discussed above in connection with the demurrer to the first cause of action, an attorney’s fiduciary duty is owed not just to present clients, but also to former clients. An attorney’s duties extends beyond the termination of an attorney-client relationship.

Accordingly, defendants Sidebotham, PLG, and Parr’s demurrer to the second cause of action in plaintiff Pho’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for professional negligence is OVERRULED.

II. Defendants’ motion to strike portions of plaintiff Pho’s FAC is GRANTED, in part, and DENIED, in part.

A. Attorney’s fees.

Defendants move to strike plaintiff Pho’s prayer for “legal fees” and “attorney’s fees” in the prayer for relief. The general rule of Code of Civil Procedure section 1021 is “that each party is to bear his or her own attorney fees unless a statute or the agreement of the parties provide otherwise.” (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504.)

Among other requests, plaintiff’s prayer for relief asks, “For damages for legal fees and costs incurred by Bic Pho including responding the claims asserted by defendants and in preparing and pursuing two motions to disqualify defendants.” In opposition to the motion to strike, plaintiff contends the “legal fees” being sought are a form of damages. “As announced by the Supreme Court in Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618 [30 Cal. Rptr. 821, 381 P.2d 645], the tort of another doctrine provides that ‘[a] person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred.’ [Citation.] The doctrine is not an exception to the American rule that the party employing an attorney pays the attorney’s fees, but rather an item of damages recoverable for another’s wrongful conduct. [Citation.]” (PacifiCare of California v. Bright Medical Associates, Inc. (2011) 198 Cal.App.4th 1451, 1467, fn. 6.)

While this might apply to any attorney’s fees which amount to damages, plaintiff has not identified any contractual or statutory basis for seeking “reasonable attorney’s fees” at paragraph 5 of his prayer for relief. Accordingly, defendants’ motion to strike paragraph 5 of the prayer for relief in plaintiff Pho’s FAC is GRANTED.

B. Emotional distress damages.

In moving to strike plaintiff Pho’s claim for emotional distress damages, defendants cite Merenda v. Superior Court (1992) 3 Cal.App.4th 1, 10 where the court wrote:

The duty to avoid negligence in the practice of law is imposed to protect a client from the legal consequences of a miscarriage of justice. The interest protected is typically economic, as in the loss of damages or the imposition of damages. Whether recovery of damages for emotional distress attributable to legal malpractice should be allowed must be considered in light of the primary interest protected by the duty to avoid malpractice. (See Holliday, supra, 215 Cal.App.3d at p. 119 [malpractice caused a criminal conviction and imprisonment].) Where the interest of the client is economic, serious emotional distress is not an inevitable consequence of the loss of money and, as noted, the precedents run strongly against recovery.

In opposition, plaintiff cites Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1097 for the following:

we note that appellant appears to claim a right to recover damages for emotional distress suffered as a result of Richmond’s conflict of interest. Richmond impliedly concedes that such damages are recoverable if directly caused by the attorney’s conduct in breach of her fiduciary duties. (Branch v. Homefed Bank (1992) 6 Cal.App.4th 793, 800 [8 Cal.Rptr.2d 182]; McDaniel v. Gile (1991) 230 Cal.App.3d 363 [281 Cal.Rptr. 242]; and cases collected in Cooper v. Superior Court (1984) 153 Cal.App.3d 1008, 1010-1013 [200 Cal.Rptr. 746].) If credited by the jury, appellant’s testimony about the extreme pressure she was under and her state of mind during the last few weeks of Richmond’s representation-including feelings of abandonment and betrayal by her attorney, anxiety over her possible loss of her family home, and undue pressure to obtain financing on a timetable established for the benefit of her attorney and opposing counsel-as well as her loss of lifetime health benefits, may well be sufficient to support an award of damages for emotional distress from the alleged breaches of fiduciary duty.

Where the loss is purely economic, defendants appear to be correct that emotional distress damages are not recoverable. However, we are merely at the pleading stage and plaintiff Pho has not made any evidentiary showing with regard to the nature of his damages. The court will not foreclose plaintiff Pho from seeking damages for emotional distress at this pleading stage.

Accordingly, defendants’ motion to strike portions of plaintiff Pho’s FAC is otherwise DENIED.

C. Other speculative damages.

Defendants move to strike certain other damages on the basis that they are speculative. In Ferguson v. Lieff, Cabraser, Heimann & Bernstein (2003) 30 Cal.4th 1037, 1048, the court wrote, “[D]amages may not be based upon sheer speculation or surmise, and the mere possibility or even probability that damage will result from wrongful conduct does not render it actionable.” “Whatever its measure in a given case, it is fundamental that ‘damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery. [Citations.]’ [Citations.] [‘It is black-letter law that damages which are speculative, remote, imaginary, contingent or merely possible cannot serve as a legal basis for recovery’].) However, recovery is allowed if claimed benefits are reasonably certain to have been realized but for the wrongful act of the opposing party.” (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989.)

Undoubtedly, plaintiff Pho will have to prove he suffered damages as a result of defendants’ breach of fiduciary duty and/or professional negligence and those damages must be certain, but defendants have not demonstrated how, as a matter of law, that plaintiff cannot make such an evidentiary showing.

Accordingly, defendants’ motion to strike portions of plaintiff Pho’s FAC is otherwise DENIED.

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