Joseph Bohnett et al vs Steven C Von Dollen et al

Case Number

22CV00232

Case Type

Hearing Date / Time

Mon, 03/18/2024 - 10:00

Nature of Proceedings

Motion: Summary Judgment

Tentative Ruling

Joseph Bohnett, et al., v. Steven C. Von Dollen, et al.

Case No. 22CV00232         

Hearing Date: March 18, 2024                                               

HEARING:              Motion of Defendant for Summary Judgment

ATTORNEYS:        For Plaintiffs Joseph Bohnett and Sandy Bohnett: David P. Myers, Ann Hendrix, Kaci J. Bell, The Myers Law Group, A.P.C.

                                    For Defendant Steven C. Von Dollen, individually and dba Delwiche & Von Dollen: Michael McCarthy, Kenny C. Brooks, Nemecek & Cole  

                                   

TENTATIVE RULING:

The motion of defendant Steven C. Von Dollen, individually and dba Delwiche & Von Dollen for summary judgment is denied.

Background:

In their operative pleading, the first amended complaint (FAC), plaintiffs Joseph Bohnett and Sandy Bohnett (collectively, plaintiffs) allege:

Defendant Steven Von Dollen is a lawyer. (FAC, ¶ 9.)

“Plaintiffs received legal advice and an attorney client relationship was created by and with Defendants regarding the purchase, transfer and related tax treatment of home located at 3201 Calle Cedro, Santa Barbara, California 93105 [(the Property)]. This representation included direct representation of the Plaintiffs as direct clients of the Defendants and/or third-party beneficiaries of the legal advice provided to the Wehe Family Trust [(the Trust)] and beneficiaries of the Wehe Family Trust, including Plaintiff Joseph Bohnett.” (FAC, ¶ 10.)

“Plaintiffs sought specific advice from Defendants to effectuate a transfer of the 3201 Calle Cedro property in order for Plaintiffs to receive the benefits of Prop. 58 because Plaintiff Joseph Bohnett was the child of Shiela F. Wehe. As a result of Defendants negligence and failure to exercise reasonable care, the Plaintiffs were denied an exclusion under the parent to child transfer and have suffered damages as a result of the higher tax assessment on their primary residence.” (FAC, ¶ 11.)

On January 19, 2022, plaintiffs filed their original complaint in this action against Von Dollen and his firm, Delwiche & Von Dollen.

On August 12, 2022, plaintiffs filed their FAC. The FAC alleges one cause of action for legal malpractice against Von Dollen and Delwiche & Von Dollen.

On September 12, 2022, Von Dollen, individually and dba Delwiche & Von Dollen, filed an answer generally denying the allegations of the FAC and asserting 20 affirmative defenses. (Note: In the FAC, Von Dollen and Delwiche & Von Dollen are identified as separate entities, each a defendant, with Delwiche & Von Dollen alleged as “an unknown entity.” In the answer, Delwiche & Von Dollen is identified as a business name for Von Dollen. The court will refer to Von Dollen as the defendant in the singular to include both Von Dollen individually and Delwiche & Von Dollen, but these two are collectively sometimes referred to as the “Attorney Defendants.”)

On December 28, 2023, Von Dollen filed this motion for summary judgment. In support of the motion, Von Dollen asserts 20 facts as undisputed as set forth in the accompanying separate statement.

The motion is opposed by plaintiffs.

Analysis:

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c, subd. (a)(1).)

“The 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. In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court, and all inferences reasonably deducible from the evidence, except summary judgment shall not be granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.” (Code Civ. Proc., § 437c, subd. (c).)

“A defendant … has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant … has met that burden, the burden shifts to the plaintiff … to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff … shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).)

“But other principles guide us as well, including that ‘[w]e accept as true the facts … in the evidence of the party opposing summary judgment and the reasonable inferences that can be drawn from them.’ [Citation.] And we must ‘ “view the evidence in the light most favorable to plaintiff[] …’ and “liberally construe plaintiff[’s] evidentiary submissions and strictly scrutinize defendant[’s] own evidence, in order to resolve any evidentiary doubts or ambiguities in plaintiff[’s] favor.” ’ [Citation.]” (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 254.)

The elements of an action for legal malpractice are: “(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.” (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199.)

Von Dollen argues that he is entitled to summary judgment because no attorney-client relationship existed between Von Dollen and plaintiffs cannot prove causation between the alleged breach and the resulting injury. Von Dollen does not distinguish between separate statement facts supporting one of these theories as opposed to another, with all separate statement facts offered in support of all theories.

Separate statement fact 9 is: “In 2013, Plaintiffs decided that they wanted to obtain the Property and reside there. In April 2013. Plaintiffs and [Mary Jo Williams] (as

trustee on behalf of the Trust) executed an agreement wherein Plaintiffs would acquire the Property (‘the Sale Contract.’) At that time, Joseph was aware that Williams was represented by Von Dollen, but did not retain his own counsel. Prior to obtaining the Property. Sandy never met with the Attorney Defendants and received no legal advice from the Attorney Defendants.”

The evidence presented in support of this separate statement fact consists of exhibits A and E to the declaration of Steven Von Dollen and exhibits G and H to the declaration of Kenny C. Brooks. Exhibit A is the Sale Contract between Williams and Plaintiffs regarding the Property. (Von Dollen decl., ¶ 5.) The only provision of the Sale Contract pertinent to this issue is paragraph 23, which states:

“Disclosure: Steven C. Von Dollen, Attorney at Law, is facilitating this transaction between BUYER and SELLER and is being compensated by SELLER after close of escrow. BUYER Joseph Bohnett is a beneficiary of the Wehe Family Trust, which is the SELLER. All relevant circumstances known to Steven C. Von Dollen have been disclosed above or in correspondence to all parties. All parties have had an opportunity to be represented by an attorney of their choice and have been advised to do so. BUYER and SELLER have been informed of and recognize that there is a potential conflict of interest, which they hereby waive and consent to this arrangement and to this transaction.” (Von Dollen decl., exhibit A, at p. 26.)

Exhibit E is a copy of the decision of the Court of Appeal in Bohnett v. County of Santa Barbara, case number B303520, dated January 19, 2021.

Exhibit G consists of excerpts from the deposition of Joseph Bohnett. The cited testimony is:

“Q        And how many meetings were there where it was discussed -- where your potential access of the Calle Cedro property were discussed?

“A        I’d say at least three. Maybe more.

“Q        And you don't recall when those meetings were?

“A        No.

“Q        Do you know what year the meetings occurred?

“A        Well, before I purchased it. So I’d say we purchased it, I can’t remember, in 2013. So 2012ish. In that area somewhere, 2011 or 2012.

“Q        Okay. Those meetings where your potential acquisition was discussed, was that before or after the successor trustee had applied for a Prop 58 exemption?

“A        Well, based on what I know now, based on that form that came out later, those meetings were after.

“Q        At those meetings, did you understand that Mr. Von Dollen was representing the trustee as – for trust administration purposes?

“A        I assume so.

“Q        Did you bring your own attorney to those meetings?

“A        No.

“Q        In connection with your acquisition of the Calle Cedro home, were you advised to retain your own counsel?

“A        I don’t recall that I had been. In fact, I’d say no.

“Q        Did you have the opportunity to retain your own counsel?

“A        Sure. I always have that opportunity.

“Q        But you did not retain your own counsel in connection with your acquisition of the Calle Cedro property?

“A        No, because we were talking to the attorney at the time.

“Q        When you say you were talking to an attorney who was that?

“A        Mr. Von Dollen.

“Q        But you also understood that Mr. Von Dollen was representing the trustee for administration purposes at that time?

“A        Yeah. Sure. I assumed so.” (J. Bohnett depo., at pp. 31-32.)

Exhibit H consists of excerpts from the deposition of Sandy Bohnett. The cited testimony is:

“Q        Did you ever retain Mr. Von Dollen as your attorney regarding a Proposition 58 claim regarding the Calle Cedro property?

“A        Not that I recall.

“Q        Okay. Did Mr. Von Dollen ever provide you with any legal advice?

“A        Not me personally.

“Q        Did you retain any other attorneys, other than Mr. Von Dollen, in connection with tax benefits concerning the Calle Cedro property?

“A        Not that I know of.

“Q        Have you ever heard of an attorney named Marilyn Anticouni?

“A        I’ve heard the name.

“Q        In what context have you heard the name?

“A        I guess just my husband might have mentioned the name, but I’ve heard it around town just as a business, you know.

“Q        Okay. You think you might have heard this name around town as a lawyer that works in the area?

“A        Yeah. I mean over all the years, I’m sure I have.

“Q        Have you ever personally spoken with Marilyn Anticouni?

“A        No.

“Q        So I take it –

            “Did Marilyn Anticouni ever give you legal advice?

“A        No, not me personally.

“Q        Okay. Did you ever execute a retainer agreement with Mr. Von Dollen?

“A        Not that I know of. Not that I’m aware I’ve ever signed anything, no.” (S. Bohnett depo., at pp. 10-11.)

In opposition to the motion, among other things, plaintiffs point to additional testimony of Joseph Bohnett and testimony of Von Dollen regarding meetings between plaintiffs, other trust beneficiaries, the trustee, and Von Dollen discussing structuring the transaction to receive the benefits of Proposition 58. Joseph Bohnett testified:

“Q        I want to revisit the meetings that you had regarding your purchase of the Calle Cedro property.

“A        Okay.

“Q        What do you recall telling Mr. Von Dollen regarding your intention to purchase the property in those meetings?

“A        Well, the conversation was that if I could get the Prop 58 treatment, I would consider buying it. And then we talked about that some, and basically my understanding is that he said I would get Prop 58. I thought I would too based on my understanding of that proposition, and then probably three or four times at least. That was the biggest concern that I had, is that I could afford to buy it and keep it in the family if I got the Prop 58 treatment.

“Q        Did you also tell him you intended to seek a Prop 60 exemption?

“A        I said for some reason if we didn’t get the Prop 58, we still qualified for the Prop 60.

“Q        So you were going to go for the Prop 58 exemption first and then if you didn’t get that, you were going to go for a Prop 60?

“A        Well, the 58 was a slam dunk. There was no problem. You’ll get that, don't worry about it.

“Q        That was what Mr. Von Dollen told you?

“A        Basically, yes.” (J. Bohnett depo., at p. 38-39.)

Von Dollen’s billing statement for June 27, 2012, to Williams, as trustee, for professional services contains an entry for “2011-2012”: “Trust Administration; discuss options for distribution; Parent-Child Exclusion (Prop 58) issue and methods to retain; meet at house and office with beneficiaries; draft documents for distribution (26.2 hours).” (Bell decl., exhibit J.)

Addressing this billing entry, Von Dollen’s deposition testimony is limited by his imperfect recollection:

“Q.       And do you know how many times you met at the house and the office with beneficiaries?

“A.       As I sit here today I can – I’ve found that sometimes my recollection is extremely precise but absolutely wrong; so I hesitate to say anything.

            “But I -- it seems to me there were -- I can kind of recall two meetings at the house when -- I don’t know if all of the children were there but most of them I think. I can almost remember the room.

            “In the office I don’t ever remember a group session of a whole bunch of people. I vaguely recall that Joe might have been at one of the meetings with Mary Jo discussing with respect to the sale, kind of listening in with her permission.

“Q.       Okay.

            “And that -- with that last meeting with Joe I think listening in on the sale, what do you mean by that?

“A.       What’s in my -- what strikes my memory today, it’s -- I can’t remember specifics. I can remember in general probably what we talked about.

            “If it says there Prop 58 issue and methods to retain, as I say, I’d -- my recollection is that we discussed the purchase possibility as it played out and the encumber the property and distribute as options -- among options. There may have been others discussed. I can’t remember right now. I’m not even sure what other options it would have been that I would have discussed. Funding the encumbrance method would have been something that would have likely come up, how it was going to be funded if that was the option selected.” (Von Dollen depo., at pp. 50-51; see also at pp. 55-56.)

A further point is that Von Dollen did not have any written agreement regarding the legal services being provided with any of the affected parties, including Williams, as trustee of the Trust, plaintiffs, or any of the beneficiaries of the Trust. (Von Dollen depo., at pp. 36-37.) Von Dollen specifically represented plaintiffs in petitioning the County Assessment Appeals Board and in the following Superior Court action (the Underlying Action) to reverse the County Assessor’s tax treatment not to provide a Proposition 58 exemption. (Plaintiffs’ Response Separate Statement [PSS], facts 13-16 [undisputed on this point].) Von Dollen considered Joseph Bohnett his client at this time, but did not charge for his representation. (Von Dollen depo., at pp. 63-64.) From this evidence, it may be inferred that Von Dollen did not have written agreements with any of the affected parties at any time, including when Von Dollen admittedly represented the trustee and when Von Dollen admittedly represented the plaintiffs in litigation.

“ ‘Except for those situations where an attorney is appointed by the court, the attorney-client relationship is created by some form of contract, express or implied, formal or informal. [Citation.]’ [Citations.] If there is a court appointment or an express agreement by the partnership attorney to represent an individual partner, the attorney-client relationship is established and application of the conflict of interest rules follows as of course. The difficult cases will be those, like this, in which the relationship can exist only if implied from the circumstances.” (Responsible Citizens v. Superior Court (1993) 16 Cal.App.4th 1717, 1732.) “ ‘An implied contract is one, the existence and terms of which are manifested by conduct.’ [Citation.] ‘The distinction between express and implied in fact contracts relates only to the manifestation of assent; both types are based upon the expressed or apparent intention of the parties.’ [Citation.]” (Id. at pp. 1732–1733.)

“California law is settled that a client’s subjective belief that an attorney-client relationship exists, standing alone, cannot create such a relationship, or a duty of care owed by the attorney to that plaintiff. [Citation.] This is because a plaintiff cannot unilaterally establish an attorney-client relationship, and its hindsight ‘beliefs’ that such a relationship existed are thus legally irrelevant. [Citation.] Instead, it is the intent and conduct of the parties that controls the question as to whether an attorney-client relationship has been created.” (Zenith Ins. Co. v. O'Connor (2007) 148 Cal.App.4th 998, 1010.)

Von Dollen argues that because it is essentially undisputed that he represented the trustee, Von Dollen did not represent plaintiffs, citing Goldberg v. Frye (1990) 217 Cal.App.3d 1258, 1267 (Goldberg): “[I]t is well established that the attorney for the administrator of an estate represents the administrator, and not the estate.” (See also Wells Fargo Bank v. Superior Court (2000) 22 Cal.4th 201, 208 [attorney for trustee].) However, in the next paragraph of Goldberg following this quotation, the court continues: “It is, of course, conceivable that the attorney for an administrator could undertake to perform legal services at the behest of, and as attorney for, a beneficiary of the estate. Under such assumed facts a duty would be created directly in favor of the beneficiary, an attorney-client relationship would be established, and the beneficiary would have recourse against the attorney for damages resulting from negligent representation.” (Goldberg, supra, at p. 1267.)

A corollary to this last statement in Goldberg is that, subject to ethical requirements, a lawyer may concurrently represent multiple clients, with overlapping interests. (See Roush v. Seagate Technology, LLC (2007) 150 Cal.App.4th 210, 223.) In such cases, as Goldberg states, the lawyer would owe duties to each client directly. So, for example, the language in the Sale Contract is consistent both with plaintiffs not being clients and with plaintiffs being concurrently represented clients with potentially conflicting interests. In both cases it would be appropriate for Von Dollen to identify the potential conflict to the clients and obtain a written waiver. (See Rules Prof. Conduct, rule 1.7.)

Based upon the evidence presented, there are competing inferences as to whether an attorney-client relationship existed between plaintiffs and Von Dollen at times prior to plaintiffs acquiring the Property. As Von Dollen argues, the “Trust had no interest whatsoever in whether the purchaser of the Property could avoid tax reassessment after the purchase.” (Motion, at p. 15.) Yet, there is evidence that Von Dollen met with the beneficiaries, including plaintiffs, and provided Joseph Bohnett with advice as to the property tax consequences of the purchase. The fact that the information was given when it had no significance to the Trust implies that the information was given because it was valuable to someone other than the trustee, namely, plaintiffs. Under the standards for summary judgment, the evidence presented is sufficient to infer an attorney-client relationship and thus to negate the separate statement facts that no such relationship existed with plaintiffs until later (see also Separate Statement fact 16) and attorney advice was given to plaintiffs. Accordingly, summary judgment will be denied on this ground.

With respect to Sandy Bohnett, the last part of the separate statement fact 9 that Sandy Bohnett “received no legal advice from the Attorney Defendants” is also disputed. Although, as quoted above, Sandy Bohnett testified that Von Dollen did not provide legal advice to her “personally,” Sandy Bohnett is a signatory to the Sale Contract as the buyer with Joseph Bohnett. To the extent that there are triable issues as to Joseph Bohnett as a client, the corresponding attorney duty to Sandy Bohnett is clear, certain, and undisputed. (See Gordon v. Ervin Cohen & Jessup LLP (2023) 88 Cal.App.5th 543, 556.) Summary judgment will be denied on this ground as to her as well.

Von Dollen alternatively argues that “Plaintiffs cannot prove that the Attorney Defendants’ purported failure to advise Plaintiffs to use that transaction structure caused Plaintiffs’ inability to evade a reassessment of the Property.” (Motion, at p. 7; see also p. 17.) The nature of this argument is not clearly articulated.

“[A] moving defendant now has two means by which to shift the burden of proof under … section 437c to the plaintiff to produce evidence creating a triable issue of fact. The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon. [Citation.] Alternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff’s cause of action. [Citation.]” (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1598.)

The argument that plaintiffs cannot prove causation sounds as though Von Dollen is attempting to demonstrate that plaintiffs cannot establish an essential element rather than by negating an essential element. “The defendant has shown that the plaintiff cannot establish at least one element of the cause of action by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence: The defendant must show that the plaintiff does not possess needed evidence, because otherwise the plaintiff might be able to establish the elements of the cause of action; the defendant must also show that the plaintiff cannot reasonably obtain needed evidence, because the plaintiff must be allowed a reasonable opportunity to oppose the motion [citation].” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.)

Under this standard, the Von Dollen has failed to meet his initial burden. The separate statement provides a number of facts but, except for separate statement fact 20, makes no reference to what evidence plaintiffs themselves possess. Separate statement fact 20, however, refers only to a specific item of discovery: “In discovery, Plaintiffs clarified that they alleged the Defendants should have arranged for their purchase of the Property to be effectuated via a loan taken out by the Trustee—not via a loan taken out by the Plaintiffs. Plaintiffs allege this arrangement would have resulted in evading reassessment and higher resulting property taxes.” (PSS, fact 20 [undisputed on this point].)

To the extent that Von Dollen instead argues that he negates the element of causation, Von Dollen also fails to meet his initial burden on that basis. Von Dollen points out that the Assessor, this court in the Underlying Action, and the Court of Appeal in the appeal of the Underlying Action did not state affirmatively that a different transactional structure would have avoided reassessment. (PSS, facts 17-19 [undisputed on this point].) Von Dollen also points out that the County stated only that a different transactional structure may have avoided reassessment, rather than would have avoided reassessment. (PSS, fact 17 [undisputed on this point].) The absence of such an affirmative statement in support of plaintiffs’ position does not imply that a different transactional structure would not have avoided reassessment.

There is similarly no evidence presented that the application of Proposition 58 is sufficiently unsettled that Von Dollen is excused from any transactional mistake he ultimately made. The issue of whether an attorney is immunized from liability resulting from an “honest error in judgment concerning a doubtful or debatable point of law” both is an issue of breach of the standard of care and requires additional elements not discussed by Von Dollen. (See Davis v. Damrell (1981) 119 Cal.App.3d 883, 887.) Von Dollen emphatically denies that this motion involves the issue of breach of duty. (Reply, at p. 4.) Thus, the court does not determine whether unsettled law excuses liability because there is no attorney negligence.

The court therefore concludes that Von Dollen has alternatively either failed to meet his initial burden on summary judgment or that plaintiffs have shown the existence of triable issues precluding summary judgment. In either event, the motion for summary judgment will be denied.