Case Name: Candace Costello v. David Rude, et al.
Case No.: 2015-1-CV-288113

Currently before the Court is motion by defendants David Rude (“Rude”), Clark & Rude, Jesse W. Jack (“Jack”), and the Law Offices of Jesse W. Jack (collectively, “Defendants”) for summary judgment or, alternatively, summary adjudication of the complaint of plaintiff Candace Costello (“Plaintiff”).

Factual and Procedural Background

On October 21, 2013, Plaintiff and Rude entered into an oral and written contract stating that Rude would provide “legal services to Plaintiff in issues pertaining to [her] interests in the Frank J. Costello Trust and property located at 604 Milverton Road, Los Altos, California.” (Complaint, ¶¶ 8, 23.) “The administration of this trust was in the Superior Court of California, Santa Clara County, Case No. 1-13-PR-173472.” (Id., at
¶ 8.) Approximately one month later, on November 21, 2013, Plaintiff and Jack entered into an oral and written contract stating that Jack would provide “legal services to Plaintiff in issues pertaining to [her] interests in ‘Candace M. Costello v. Robert Mark Costello and Francis John Costello and all matter related to the Frank J. Costello Trust Dated December 6, 1991.’ ” (Id., at ¶¶ 9, 23.)

“At the inception of the legal representation,” Defendants were aware that Plaintiff “suffered from an ADA disorder … and was effectively handicapped.” (Complaint, ¶ 48.) However, Defendants “induced [her] to execute … their agreements for legal representation, and Powers of Attorney, and thereafter sought to impose a Guardian Ad Litem over her affairs.” (Ibid.) Defendants “made said inducements with the intent to deceive Plaintiff and induce [her] into providing her authorization into the partial release of her vested beneficial interest in the Frank J. Costello Trust into their own legal trust accounts over which they exercised unrestricted and unsupervised access.” (Id., at ¶ 49.)

Plaintiff allegedly “requested that her interest in the Frank J. Costello Trust be transferred into a special needs trust where her funds could be protected from creditors and from her family.” (Complaint, ¶ 13.) However, Defendants “failed to take any action to protect [her] interest in the Frank J. Costello Trust.” (Id., at ¶ 14.) Additionally, Defendants “filed frivolous actions and delays in the administration of the trust,” including an “improper demand for an accounting to the date of the grantor’s death, the improper recording [of] a lis pendens, and a petition for the filing of a guardian ad litem over Plaintiff.” (Id., at ¶¶ 13, 37-40.) Plaintiff alleges that Defendants’ actions were unnecessary, caused damage to the assets of the trust, and constituted a breach of their agreements. (Id., at ¶¶ 14, 20-21, 24-25.) Plaintiff further alleges that Rude and Jack each maintained a legal trust account for her benefit; $100,000 was transferred into those accounts from the Frank J. Costello Trust; Defendants refused to distribute any of those funds to her for medical and housing expenses; and Defendants “used her trust funds as their own piggy bank paying themselves exorbitant fees in the approximate amount of $56,752.15.” (Id., at ¶¶ 43-44, 49.)

“On November 20, 2014, the Court granted Defendants’ motions to withdraw as counsel of record, terminating the attorney-client relationship between Plaintiff and Defendants.” (Complaint, ¶ 10.) On that date, and again on June 30, 2015, Plaintiff demanded that Rude and Rude & Clark release her papers and property. (Id., at ¶ 16.) However, Rude and Rude & Clark refused to do so in violation of their written contract with Plaintiff and Rule 3-700(D) of the Professional Rules of Conduct. (Id., at ¶¶ 15-17.) Additionally, on June 30, 2015, Plaintiff demanded that Jack and the Law Offices of Jesse W. Jack release her papers and property. (Id., at ¶ 18.) However, Jack and the Law Offices of Jesse W. Jack refused to do so in violation of their written contract with Plaintiff and Rule 3-700(D) of the Professional Rules of Conduct. (Id., at ¶¶ 18-19.)

Based on the foregoing, on November 16, 2015, Plaintiff filed a complaint against Defendants, alleging causes of action for: (1) breach of written contract; (2) breach of oral contract; (3) breach of implied warranty of good faith and fair dealing; (4) legal malpractice; (5) breach of fiduciary duty; and (6) fraud.

Thereafter, Defendants filed an answer to the complaint, generally denying each and every allegation of the complaint and asserting several affirmative defenses.

On August 26, 2016, Defendants filed the instant motion for summary judgment or, alternatively, summary adjudication of the complaint. Plaintiff filed papers in opposition to the motion on November 30, 2016. On December 8, 2016, Defendants filed a reply.

Discussion

Defendants move for summary judgment of the complaint or, in the alternative, summary adjudication of each of the six causes of action and the request for punitive damages. In moving for the foregoing, Defendants make the following arguments: (1) the first through fifth causes of action are time-barred under Code of Civil Procedure section 340.6; (2) the first cause of action for breach of written contract also fails because they took actions to protect Plaintiff’s interest in the trust, the actions that they took do not constitute breaches of the contracts, the alleged failure to comply with the Rules of Professional Conduct does not create a cause of action, and the “complaint is devoid of any claims of damages arising from” the alleged failure to return papers and property; (3) the fifth cause of action for breach of fiduciary duty also fails because there are no allegations showing that they breached the duties of loyalty or confidentiality; (4) the sixth cause of action for fraud fails because “they took the appropriate precautions to ensure that [Plaintiff] was not taken advantage of by having her execute a Special Power of Attorney, naming her friend, Debbie Bright as her Attorney-in-Fact,” “[o]nly after this occurred did Ms. Bright execute the powers granted to her by [Plaintiff] to sign the attorneys’ fee agreements on [her] behalf,” and Plaintiff acquiesced to the payments made for their services; (5) and the request for punitive damages fails because “the allegations in the Complaint fail to satisfy the ‘clear and convincing’ standard of ‘despicable conduct’ needed to support an award of punitive damages.”

I. Legal Standard for Motions for Summary Judgment or Adjudication

The pleadings limit the issues presented for summary judgment or adjudication, and such a motion cannot be granted or denied on issues not raised by the pleadings. (Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73; Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663.) A defendant seeking summary judgment or adjudication “must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action. … The burden then shifts to the plaintiff to show there is a triable issue of material fact on that issue.” (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (“Alex”) (2002) 98 Cal.App.4th 66, 72; see also Code Civ. Proc., § 437c, subd. (p)(2).) “ ‘There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.’ ” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272, internal citations omitted; see also Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1132; see also Intrieri v. Super. Ct. (2004) 117 Cal.App.4th 72, 82.)

For purposes of establishing their respective burdens, the parties involved in a motion for summary judgment or adjudication must present admissible evidence. (See Saporta v. Barbagelata (1963) 220 Cal.App.2d 463.) The motion may not be granted by the court based on inferences reasonably deducible from the papers submitted, if such inferences are contradicted by other inferences which raise a triable issue of fact. (Hepp v. Lockheed-California Co. (“Hepp”) (1978) 86 Cal.App.3d 714, 717-718.) Additionally, in ruling on the motion, a court cannot weigh said evidence or deny summary judgment or adjudication on the ground that any particular evidence lacks credibility. (See Melorich Builders v. Super. Ct. (1984) 160 Cal.App.3d 931, 935; see also Lerner v. Super. Ct. (1977) 70 Cal.App.3d 656, 660.) As summary adjudication “is a drastic remedy eliminating trial,” the court must liberally construe evidence in support of the party opposing the motion and resolve all doubts concerning the evidence in favor of that party. (See Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hepp, supra, 86 Cal.App.3d at p. 717.)

With that in mind, Plaintiff’s claims and the issues presented by the motion are discussed below.

II. Evidentiary Objections

A. Plaintiff’s Objections

With her opposition, Plaintiff submits a separate document asserting evidentiary objections to some of the undisputed material facts (“UMF”) set forth in Defendants’ separate statement.

Plaintiff’s objections are deficient for the following reasons. First, Plaintiff’s evidentiary objections are improperly directed to the UMF set forth in Defendants’ separate statement, as opposed to particular items of evidence supporting those UMF. Second, Plaintiff did not provide the Court with a proposed order for her evidentiary objections. (See Cal. Rules of Ct., rule 3.1354(c) [providing that a party must provide a proposed order that complies with one of the formats described in the rule].)

For these reasons, Plaintiff’s evidentiary objections are overruled.

B. Defendants’ Objections

In connection with their reply, Defendants submit objections to evidence offered by Plaintiff in support of her opposition. Defendants’ objections are not material to the disposition of the motion because, for the reasons explained below, Defendants fail to meet their initial burden; the Court, consequently, did not consider Plaintiff’s evidence in opposition to the motion. (See Code Civ. Proc., §437c, subd. (q) [“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.”].) Therefore, the Court declines to rule on the objections.

III. Request for Judicial Notice

Defendants ask the Court to take judicial notice of the complaint and a “Status Report and Request for Approval of Settlement” filed in the case of In Re: Frank J. Costello Trust dated December 6, 1991 (Santa Clara County Superior Court, Case No. 2013-1-PR-173472).

The complaint and “Status Report and Request for Approval of Settlement” are proper subjects of judicial notice because they are court records that are relevant to issues raised in the pending motion. (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [“There is … a precondition to the taking of judicial notice in either its mandatory or permissive form—any matter to be judicially noticed must be relevant to a material issue.”].) However, the Court cannot take judicial notice of the truth of any hearsay statements or facts asserted therein. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-1568 [a court may take judicial notice of the existence and content of each document in a court file, but cannot take judicial notice of the truth of hearsay statements or factual findings therein]; People v. Woodell (1998) 17 Cal.4th 448, 455 [same].)

Accordingly, Defendants’ request for judicial notice is GRANTED only as to the existence and contents of the complaint and “Status Report and Request for Approval of Settlement.”

IV. Statute of Limitations

As indicated above, Defendants first assert that their motion should be granted as to the first (breach of written contract), second (breach of oral contract), third (breach of implied warranty of good faith and fair dealing), fourth (legal malpractice), and fifth (breach of fiduciary duty) causes of action because each of those claims is time-barred under Code of Civil Procedure section 340.6. Defendants contend that Code of Civil Procedure section 340.6 applies to these claims because the causes of action arise out of their provision of legal services. Defendants further contend that the statute was triggered no later than November 13, 2014, because at that time Plaintiff had discovered the facts constituting the wrongful act and suffered actual injury; the complaint was filed more than one year later on November 16, 2015; and any tolling based on their continued representation of Plaintiff ended no later than November 13, 2014.
In opposition, Plaintiff asserts that the first through fifth causes of action are not time-barred under Code of Civil Procedure section 340.6 because she did not sustain actual injury until February 20, 2015 (when she received her allegedly diminished distribution from the trust); Defendants continued to represent her until November 20, 2014, thereby tolling the statute of limitations; and Jack and Rude were travelling outside of California for multiple weeks thereby tolling the statute of limitations.

A. Code of Civil Procedure Section 340.6

Code of Civil Procedure section 340.6 sets forth the statute of limitations for any action against an attorney arising in the performance of professional services. (See Khodayari v. Mashburn (2011) 200 Cal.App.4th 1184, 1190, internal citations omitted [deeming claims for fraud, negligence, breach of fiduciary duty, intentional infliction of emotional distress, abuse of process, and breach of contract to all be claims for legal malpractice and upholding the trial court’s order sustaining a demurrer without leave to amend on the basis that all claims were time-barred under the statute].)

That statute states, in relevant part:

(a) An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. In no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist:

(1) The plaintiff has not sustained actual injury;
(2) The attorney continues to represent the plaintiff regarding the specific subject
matter in which the alleged wrongful act or omission occurred;
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this subdivision shall toll only the four-year limitation; and
(4) The plaintiff is under a legal or physical disability which restricts the plaintiff’s ability to commence legal action.

It is well settled that the one-year limitations period is triggered when the client discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission and suffers actual injury. (Peregrine Funding, Inc. v. Sheppard, Mullin, Richter & Hampton, LLP (2005) 133 Cal.App.4th 658, 685; Levin v. Graham & James (1995) 37 Cal.App.4th 798, 805; Pompilio v. Kosmo (1995) 39 Cal.App.4th 1324, 1328 [“discovery of facts essential to malpractice and the suffering of actual harm from the malpractice establish a cause of action and start the statute of limitations”].) “Actual injury” occurs “when the plaintiff suffers any loss or injury legally cognizable as damages in a legal malpractice action based on the asserted errors or omissions.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 743.)

B. Analysis

The first through fifth causes of action are based on the following allegations: Defendants “represented to Plaintiff that they were qualified to represent her interests with respect to the Frank J. Costello Trust”; however, “Defendants filed frivolous and erroneous actions causing exorbitant and unnecessary costs to the Trust and ultimately to Plaintiff’s beneficial interest in that trust”; for example, Defendants filed an improper demand for an accounting of the trust; “[w]hen Plaintiff objected to the actions taken [by] her attorneys, they filed a petition to have a Guardian Ad Litem imposed over her asserting that she was not competent to handle her own affairs”; “Plaintiff had requested that Defendant Attorneys preserve her beneficial interest in a special needs trust but they refused to prepare and file a petition which was one of the objects of their legal representation”; “Defendants failed in their duty to provide reasonable professional representation for the benefit of Plaintiff”; Defendants failed to release Plaintiff’s papers and property to her; Defendants failed to provide Plaintiff with trust funds for her medical needs and rent; Defendants used the trust funds to pay their own exorbitant fees; as a result of Defendants’ conduct, the trust incurred unwarranted legal fees and costs in the amount of $66,103.88; as a result of Defendants’ conduct, Plaintiff incurred legal fees and costs in the amount of $56,742.15; and as a result of Defendants’ conduct, she was “generally and specifically damaged in the specific amount of $122,856.03, … plus pre-judgment interest at the rate of ten percent (10%) from February 2, 2015.” (Complaint, ¶¶ 13-46.)

In light of these allegations, the alleged wrongful conduct is the filing of “frivolous and erroneous actions,” the filing of a demand for an accounting, the filing of a petition for appointment of a guardian ad litem, the failure to file a petition for a special needs trust, the use of trust funds to pay Defendants’ fees, the failure to provide Plaintiff with trust funds for rent and her medical needs, and the failure to provide Plaintiff with her papers and property upon request. (Complaint, ¶¶ 13-46.) The injuries claimed by Plaintiff are legal fees that she personally incurred and the depletion the trust’s assets (as a result of legal fees and costs incurred by the trust). (Ibid.)

According to the UMF and evidence submitted by Defendants, Plaintiff hired Rude on October 21, 2013, to provide legal services pertaining to her interest in the Frank J. Costello Trust. (UMF Nos. 120-121; Rude Dec., ¶¶ 3-4, Ex. G, Complaint, ¶¶ 8, 23.) Shortly after he was retained, Rude filed a list pendens on the real property, which represented the largest remaining asset of the trust. (UMF No. 123, Rude Dec., ¶ 4.) Plaintiff hired Jack on November 21, 2013, to provide legal services pertaining to her interest in the trust. (UMF No. 124; Complaint, ¶¶ 9, 23.) Defendants received monies from the trust that were used to pay, in part, for legal fees and costs. (Rude Dec., ¶ 8, Exs. I-J.)

About one year later, on October 7 and 9, 2014, Rude and Jack filed motions to be relieved as counsel in the matter relating to the trust. (UMF Nos. 125, 127; Jack Dec., ¶¶ 5-6, Ex. L; Rude Dec., ¶ 5, Ex. H.) Jack understood that Plaintiff did not want him to represent her anymore, but he could not get her to sign a substitution of attorneys form. (Jack Dec., ¶¶ 5-6, Ex. L.) Rude believed that Plaintiff had orally discharged him as counsel, but because of Plaintiff’s disability he did “not want to withdraw or substitute out, leaving [Plaintiff] unrepresented, until another attorney or guardian or conservator has appeared on behalf of [Plaintiff] or has been appointed to represent [her].” (Rude Dec., ¶ 5, Ex. H.)

Approximately one month later, on November 10, 2014, Kenneth Fehl (“Fehl”) signed a substitution of attorneys form, substituting himself as Plaintiff’s counsel in place of Rude and Jack. (UMF 129; MacLeod Dec., Ex. C, “RFA – Exhibit C.”) During the following two days, Plaintiff, and Fehl on her behalf, signed a “Settlement Agreement, Stipulation and Release” for her claims related to the trust. (UMF Nos. 131; RJN, Ex. A.) Jeffrey Holman (“Holman”), counsel for the other parties to the trust action, filed with the court a “Status Report and Request for Approval of Settlement” with Fehl’s authorization, stating that Plaintiff was represented by Fehl and the settlement agreement had been forwarded to her former attorneys, Rude and Jack. (UMF Nos. 132-136; RJN, Ex A.) Plaintiff signed the substitution of attorneys form on November 14, 2014. (MacLeod Dec., Ex. C “RFA – Exhibit C.”) Plaintiff had written to Fehl the previous day and told him that the petition to appoint a guardian ad litem was meritless, her former attorneys had cost everyone “enormous $$$,” and they should be reimbursing the trust.” (UMF Nos. 130, 139; MacLeod Dec., Ex. E, pp. 3-4.) Thereafter, Plaintiff’s complaint was filed on November 16, 2015. (UMF No. 141.)

This evidence is sufficient to establish that by November 13, 2014, Plaintiff had discovered, or through the use of reasonable diligence should have discovered, the facts regarding Defendants’ filing of the lis pendens, filing of a demand for an accounting, filing of a petition for appointment of a guardian ad litem, and their failure to file a petition for a special needs trust.

However, the evidence does not reveal when Plaintiff discovered, or should have discovered, the facts regarding Defendants’ alleged failure to release her papers and property. Notably, the complaint alleges that Plaintiff first requested her papers and property from Rude and Clark & Rude on November 20, 2014. Additionally, the complaint alleges that Plaintiff first requested her papers and property from Jack and the Law Offices of Jesse W. Jack on June 30, 2015. Thus, Plaintiff could not have discovered the facts surrounding those alleged acts of misconduct prior to those dates. Accordingly, the first through fifth causes of action, at least in part, did not accrue until November 20, 2014 (with respect to Rude and Rude & Clark) and June 30, 2015 (with respect to Jack and the Law Offices of Jesse W. Jack). Plaintiff filed the complaint on November 16, 2015, which is less than one year from November 20, 2014 and June 30, 2015. Thus, Defendants fail to meet their initial burden to show that the first through fifth causes of action are time-barred under Code of Civil Procedure section 340.6.

Defendants contend that the alleged failure to return Plaintiff’s papers and property was actually “the subject of a November 13, 2014 letter from Mr. Fehl to Mr. Holman in which he complaint [sic] that Mr. Rude ‘continues to refuse to turn [sic] his files … in the matter concerning [Plaintiff]’, and he was preparing a complaint against Mr. Rude based on this failure.” (Ds’ Mem. Ps. & As., p. 16, fn. 5; UMF No. 21.) However, the email by Fehl that is offered as evidence in support of this assertion is dated November 13, 2015, not November 13, 2014. (MacLeod Dec., Ex. E, pp. 1-2.) Therefore, the email does not demonstrate that Plaintiff discovered or should have discovered the facts regarding Defendants’ alleged failure to release her papers and property any earlier than the dates alleged in the complaint.

Additionally, Defendants’ UMF and evidence do not reveal when Plaintiff discovered, or should have discovered, that Defendants used the funds they received from the trust to pay their bills. Since the fifth cause of action is also based on this additional allegation of misconduct, there is no way for the Court to determine when the fifth cause of action, at least in part, accrued. This is another reason why Defendants do to meet their initial burden to show that the fifth cause of action is time-barred under Code of Civil Procedure section 340.6.

Given the foregoing, the Court need not address the parties’ arguments and evidence regarding tolling.

C. Conclusion

As articulated above, Defendants do not meet their initial burden to show that the first through fifth causes of action are time-barred by the applicable statute of limitations. The only argument asserted by Defendants with respect to the second through fourth causes of action is that those claims are time-barred under Code of Civil Procedure section 340.6. Accordingly, the motion for summary judgment is DENIED and the motion for summary adjudication of the second through fourth causes of action is DENIED.

V. First Cause of Action

In addition to their statute of limitations argument, Defendants assert that their motion should be granted as to the first cause of action for breach of written contract because they took actions to protect Plaintiff’s interest in the trust (e.g., they filed a lis pendens); the actions that they took do not constitute breaches of the written agreements; their alleged failure to comply with the Rules of Professional Conduct does not create a cause of action; and the “complaint is devoid of any claims of damages arising from” the alleged failure to return papers and property. (Ds’ Mem. Ps. & As., p. 16.) In support of their arguments, Defendants offer the same UMF and evidence that they presented in support of their statute of limitations argument.

To prevail on a claim for breach of contract, a plaintiff must demonstrate the following: (1) the existence of a contract, (2) plaintiff’s performance or excuse for non-performance, (3) defendant’s breach, and (4) damages to plaintiff therefrom. (Acoustics, Inc. v. Trepte Construction Co. (1971) 14 Cal.App.3d 887, 913.)

The Court finds that Defendants’ arguments lack merit and Defendants fail to meet their initial burden. In the complaint, Plaintiff alleges that Defendants breached their respective contracts, in part, by failing to release her papers and property to her after she requested that they do so, as they were required to do under their written agreements. (Complaint, ¶¶ 15-19.) Defendants do not present any UMF, evidence, or argument disputing that they were obligated, under the terms of their written contracts, to return Plaintiff’s papers and property to her upon her request and that they failed to do so. (See UMF Nos. 1-59; see also Ds’ Mem. Ps. & As., p. 16.) Rather, Defendants merely contend that the “complaint is devoid of any claims of damages arising from” the alleged failure to return papers and property. (Ds’ Mem. Ps. & As., p. 16.) Contrary to Defendants’ assertion, the complaint alleges that Plaintiff sustained damages in the form of incurred legal fees (both by herself and the trust) as a result of Defendants breaches of the provisions of the written agreements. (Complaint, ¶¶ 15-21.) Thus, the complaint adequately alleges that Plaintiff’s sustained damages as a result of the alleged breaches of the written agreements.

For these reasons, the motion for summary adjudication of the first cause of action is DENIED.

VI. Fifth Cause of Action

Defendants argue that their motion should be granted as to the fifth cause of action for breach of fiduciary duty because there are no allegations showing that they breached their duties of loyalty or confidentiality. (Ds’ Mem. Ps. & As., pp. 19-20.) In their papers, Defendants also mention that they gave Debbie Bright $56,591.78 of the trust funds to use for Plaintiff’s living expenses, they used the remainder of the funds received from the trust to pay for various legal expenses, and Plaintiff “agreed that $40,000 of the $100,000 early distribution rightfully was owed to Mr. Rude for his fees.” (Ds’ Mem. Ps. & As., p. 7; UMF Nos. 142, 182.) However, Defendants do not explain how these facts are relevant to their argument pertaining to the fifth cause of action (i.e., that the claim fails because there are no allegations demonstrating a breach of the duties of loyalty or confidentiality). Furthermore, Defendants do not argue that these facts somehow demonstrate that at least one element of the fifth cause of action cannot be established or that there is a complete defense to the fifth cause of action. (See Alex, supra, 98 Cal.App.4th at p. 72 [a defendant seeking summary judgment or adjudication “must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action”].) Consequently, the Court need only address Defendants’ argument that the fifth cause of action fails because there are no allegations showing that Defendants breached their duties of loyalty or confidentiality.

Breach of fiduciary duty is a tort distinct from professional negligence. (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.) The elements of such a claim are: (1) the existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach. (Ibid.) The scope of an attorney’s fiduciary duty to a client is determined as a matter of law, with the court looking to both the Rules of Professional Conduct and “statutes and general principles relating to other fiduciary relationships.” (Ibid.) “Whether an attorney has breached a fiduciary duty to his or her client is generally a question of fact” (Id., at p. 1087.)

In the complaint, Plaintiff alleges that Defendants breached their fiduciary duties by (1) refusing to distribute any of the funds that they received from the trust to her “for her necessary medical expenses and housing expenses”; and (2) using “her trust funds as their own piggy bank paying themselves exorbitant fees in the approximate amount of $56, 752.15 for services neither requested nor desired with respect to the Frank J. Costello Trust.” (Complaint, ¶¶ 42-44.)

It is well-established that the fiduciary duties an attorney owes his or her client includes the duty to take care that fee agreements and billings are fair, reasonable, and conscionable. (Bird, Marella, Boxer & Wolpert v. Superior Court (2003) 106 Cal.App.4th 419, 430-431 [“An attorney owes the client a fiduciary duty ‘ ‘of the very highest character.’ …’ This fiduciary duty requires fee agreements and billings ‘ ‘must be fair, reasonable and fully explained to the client.’ ’ No fee agreement ‘is valid and enforceable without regard to considerations of good conscience, fair dealing, and … the eventual effect on the cost to the client.’ Rule 4-200 (A) of the Rules of Professional Conduct expresses this fiduciary requirement. It states: ‘A member shall not enter into an agreement for, charge, or collect an illegal or unconscionable fee.’ The Rules of Professional Conduct ‘are not only ethical standards to guide the conduct of members of the bar; but they also serve as an expression of public policy to protect the public.’
The fiduciary duty to charge only fair, reasonable and conscionable fees applies to all members of the bar ….”].)

Here, the allegation that Defendants used Plaintiff’s “trust funds as their own piggy bank paying themselves exorbitant fees in the approximate amount of $56, 752.15 for services neither requested nor desired with respect to the Frank J. Costello Trust” is sufficient allege a breach of Defendants’ fiduciary duty to charge only fair, reasonable, and conscionable fees. Consequently, even though the complaint may not set forth facts showing a breach of the duties of loyalty or confidentiality, Plaintiff adequately pleads facts showing a breach of the fiduciary duty to charge only fair, reasonable, and conscionable fees. Therefore, Defendants’ argument lacks merit and Defendants fail to meet their initial burden.

Accordingly, the motion for summary adjudication of the fifth cause of action is DENIED.

VII. Sixth Cause of Action

Defendants assert that the sixth cause of action for fraud is barred “because the undisputed facts are contrary to the Plaintiff’s claims, and so she cannot show a false statement of fact, which is an essential element of the cause of action.” (Ds’ Ntc. Mtn., p. 2:10-12; Ds’ Mem. Ps. & As., p. 20:8-10.) In support of their argument, Defendants contend that “they took the appropriate precautions to ensure that [Plaintiff] was not taken advantage of by having her execute a Special Power of Attorney, naming her friend, Debbie Bright as her Attorney-in-Fact,” “[o]nly after this occurred did Ms. Bright execute the powers granted to her by [Plaintiff] to sign the attorneys’ fee agreements on [her] behalf,” and Plaintiff acquiesced to the payments made for their services. (Ds’ Mem. Ps. & As., pp. 20-21; UMF Nos. 183-205.)

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar).)
Here, the sixth cause of action alleges the following: “[a]t the inception of the legal representation,” Defendants were aware that Plaintiff “suffered from an ADA disorder … and was effectively handicapped”; however, Defendants “induced [her] to execute … their agreements for legal representation, and Powers of Attorney, and thereafter sought to impose a Guardian Ad Litem over her affairs”; Defendants “made said inducements with the intent to deceive Plaintiff and induce [her] into providing her authorization into the partial release of her vested beneficial interest in the Frank J. Costello Trust into their own legal trust accounts over which they exercised unrestricted and unsupervised access with which they paid themselves approximately $56,752.15 … over Plaintiff’s objections”; had she known of Defendants’ actual intent, “she would not have executed those legal documents which they induced her to execute”; her reliance on Defendants was justified because they were active members of the bar and subject to the rules of professional conduct; and as a result of Defendants’ conduct, “Plaintiff was induced to expend substantial sums of money in the approximate amount of $56,572.15.” (Complaint, ¶¶ 48-53.)

Defendants’ arguments and evidence demonstrate that they had Plaintiff sign a power of attorney prior to executing the written legal services agreements. (Ds’ Mem. Ps. & As., pp. 20-21; UMF Nos. 183-205.) However, the claim for fraud is based, in part, on the allegation that Defendants fraudulently induced Plaintiff to execute the power of attorney, giving Debbie Bright power to act as her attorney in fact. (Complaint, ¶¶ 48-53.) Thus, it is wholly unclear to the Court how Plaintiff’s execution of the power of attorney undercuts her fraud claim. Moreover, it is unclear to the Court how Plaintiff’s execution of the power of attorney demonstrates that Defendants could not have made a false statement of fact. Consequently, the Court finds that Defendants’ arguments lack merit and Defendants fail to meet their burden.

Accordingly, the motion for summary adjudication of the sixth cause of action is DENIED.

VIII. Request for Punitive Damages

Defendants argue that their motion should be granted as to Plaintiff’s claim for punitive damages because she “cannot allege facts sufficient to show an entitlement to punitive damages by clear and convincing evidence.” (Ds’ Ntc. Mtn., p. 2; Ds’ Mem. Ps. & As., p. 22:17-23.)

Defendants’ argument is not well taken. Plaintiff pleads a cause of action for fraud that survives Defendants’ motion and such a claim is sufficient by itself to support a request for punitive damages. (Civ. Code, § 3294; Miller v. National American Life Ins. Co. (1976) 54 Cal.App.3d 331, 336 [stating that a fraud cause of action “is itself an adequate basis for awarding punitive damages”]; Walker v. Signal Companies, Inc. (1978) 84 Cal.App.3d 982, 996 [same].)
Accordingly, the motion for summary adjudication of the request for punitive damages is DENIED.