Nicole E Jordan vs Rogers Sheffield & Campbell LLP et al
Nicole E Jordan vs Rogers Sheffield & Campbell LLP et al
Case Number
23CV02702
Case Type
Hearing Date / Time
Mon, 12/11/2023 - 10:00
Nature of Proceedings
Demurrers; Motions to Strike
Tentative Ruling
# 23CV02702 Nicole E. Jordan v. Rogers Sheffield & Campbell, LLP, et al.,
Hearing Date: 12/11/2023
HEARINGS: Demurrer to complaint by defendant Rogers Sheffield & Campbell LLP
Motion to strike complaint by defendant Rogers Sheffield & Campbell LLP
Demurrer to complaint by defendant Sheila T. Price
Motion to strike complaint by defendant Sheila T. Price
Demurrer to complaint by defendant Jamie Cathleen Green
Motion to strike by defendant Jamie Cathleen Green
ATTORNEYS: Tamineh Roshanian of Roshanian Payman PC for plaintiff Nicole Emily
Jordan Kenny C. Brooks / Michael McCarthy of Nemecek & Cole for defendants
Rogers Sheffield & Campbell, LLP and Sheila T. Price, as co-personal representative of the Estate of Homer G. Sheffield, Jr., deceased
Rachel Van Mullem / Jennifer J. Lee of County Counsel’s Office for defendant Jamie Cathleen Green
TENTATIVE RULINGS:
For reasons more fully articulated below:
1. The statute of limitations demurrer by RSC will be sustained, with leave to amend. All other grounds raised by the demurrer are mooted by this ruling.
2. The statute of limitations demurrer by Price will be overruled as to the first cause of action for breach of fiduciary duty, and will be sustained as to all other causes of action alleged against Price, with leave to amend. All other applicable grounds raised by the demurrer are mooted by this ruling.
3. The motions to strike by RSC and Price will be granted in their entirety, with leave to amend.
4. The demurrer by Green is sustained, with leave to amend, based upon the failure of the complaint to allege any compliance with the claims presentation requirement, which resulted in its failure to make any effort to plead around the claim defects raised by Green’s demurrer. All other grounds raised by the demurrer are mooted by this ruling.
5. The motion to strike by Green is likewise mooted by the ruling on her demurrer.
6. Plaintiff will be granted leave to amend her complaint, and any such First Amended Complaint must be filed no later than January 8, 2024, or such other date as this Court might specify at the hearing.
Background: This Court’s understanding of the underlying facts is informed not only by the allegations of the complaint, but also by the matters over which it presided in the Probate Court, the relevant documents of which are the subject of requests for judicial notice filed by defendants Rogers Sheffield & Campbell, LLP (RSC) and Sheila T. Price (Price), which accompanied their demurrers and motions to strike. The Court’s summary of the background of the case comes both from those documents, and from Nicole Jordan’s current complaint.
Dr. Borimir Jordan and Virginia Jordan, who were husband and wife, have three daughters, Angela Jordan Hart, Jennifer Jordan, and Nicole Jordan. In 1998, they established the Borimir and Virginia Jordan Family Trust. [Note: Because of the multiplicity of persons with the same surname, the Court refers to members of the Jordan family by their first names for purposes of clarity. No disrespect is intended.]
The trust was amended and restated by a Third Amendment to and Complete Restatement of Declaration of Trust in April 2017. It was amended by a Fourth Amendment executed in 2010, and a Fifth Amendment in 2012. The Jordans’ estate planning attorney was Homer Sheffield, with the law firm of Rogers Sheffield & Campbell, LLP. [Complaint at ¶¶ 18, 23, 25, 29-33, 39-68, among many other paragraphs.]
In September 2018, the Jordans allegedly requested that Sheffield draft a Sixth Amendment to the trust, leaving significant assets to Nicole. Instead of doing so, Sheffield terminated his representation of the Jordans. [Complaint at ¶ 39, reflecting a December 1, 2021 fax from Nicole to Homer Sheffield articulating the Jordans’ request, and that Sheffield “fired” the Jordans as clients at that time, sending them the existing original trust documents, as well as ¶¶ 86.] The Jordans then allegedly self-drafted and executed a Sixth Trust Amendment, naming Nicole as sole successor Trustee and sole beneficiary of the Trust. [Complaint at ¶¶ 25, 49, 98.]
Borimir passed away on March 26, 2020. Upon belatedly learning of his death, Angela sought to establish a conservatorship over her mother, based on her belief that Nicole—who had lived with her parents for some time—was abusing and neglecting Virginia. Her petition for appointment of temporary conservator for Virginia was filed in April, 2020. The Probate Court appointed Mark Watson as the temporary conservator of Virginia’s estate after hearing on October 15, 2020. Virginia passed away on November 1, 2020.
On January 27, 2021, Mark Watson petitioned the Probate Court (Case No. 21PR00040) for an order confirming himself as trustee and confirming trust assets, setting the hearing on the petition for March 18, 2021. The petition alleged that upon Borimir’s death, the trust agreement directed the division of the trust estate into two separate shares, Trust A and Trust B, each to be administered as a separate trust. Trust B is to be established as an irrevocable subtrust, and Trust A remains amendable and revocable by Virginia as the surviving Settlor. The Trust agreement directed the trustee to allocate to Trust A all of the surviving Settlor’s separate property and one-half share of all community property with any necessary adjustments for federal estate planning purposes. The remainder of the Trust estate (the deceased Settlor’s separate property, and one-half share of community property) was to be allocated to Trust B up to the maximum value of cash and property valued at the applicable federal exclusion amount. The applicable federal exclusion amount in effect when Borimir passed away was $11.58 million.
The petition alleged that upon Virginia’s death, Trust A became irrevocable, and both Trust A and Trust B became terminating trusts subject to post-death administration. Successor co-trustee Pearlman declined to act as trustee, and successor co-trustee Homer G. Sheffield, Jr. on December 7, 2020, appointed Mark Watson as trustee of the trust and all sub-trusts. Watson then began post-death administration of Trust A and Trust B under the Trust, including the marshalling of assets and sending out Notices by Trustee to the beneficiaries of the Trust. The Notices by Trustee were mailed to the beneficiaries on January 7, 2021, and included copies of the Trust and all amendments thereto.
The Petition alleged that Watson received correspondence from the Settlors’ daughter, Nicole Jordan, that the trust documents in Watson’s possession may have been amended or revoked, or that such documents do not authorize Watson to act on behalf of the trust. Watson attempted to understand her allegations, but her responses were confusing and inconsistent, and she refused to provide copies of the documents she claimed superseded those under which Watson was acting. Watson therefore sought the Court’s order confirming that the trust documents attached to the petition were valid and set forth the most recent and controlling iteration of the Trust, and that Watson is the sole Trustee of the Trust.
No one opposed the petition in writing, nor did anyone appear at the March 18, 2021 hearing in opposition to the petition. After that hearing, the Probate Court granted Watson’s petition. The formal order, filed March 24, 2021, confirmed Watson as Trustee, noted that Nicole Jordan had contended that the trust documents were amended or revoked and do not allow Watson to act on behalf of the trust, but had provided no evidence to support her claims. Under those circumstances, the Probate Court confirmed that the petition set forth the current and controlling iteration of the trust, and appointed Watson as sole trustee of the trust as amended, among other orders made on that date.
On March 15, 2022, Nicole Jordan filed a verified petition in the Probate Court trust action, seeking to establish herself as the sole successor trustee and sole beneficiary of The Borimir and Virginia Jordan Family Trust, and to establish trust assets under a Sixth Trust Amendment, which she alleged had been drafted and executed by Virginia and Borimir without assistance of counsel, on July 15, 2019. The petition sought to validate the Sixth Trust Amendment, and to invalidate the Fourth and Fifth Trust Amendments, among other requests.
Angela Jordan Hart (Angela), daughter of Borimir and Virginia, demurred to the petition on various grounds, including that it was time-barred. Jennifer Michelle Jordan (Jennifer) joined in the demurrer. After a continuance by the Probate Court to permit Angela to respond to Nicole’s late-filed opposition papers, and another continuance to permit Angela to respond to Nicole’s unauthorized supplemental opposition papers, the demurrer was ultimately heard on January 19, 2023. At that time, the Probate Court sustained on statute of limitations grounds (Prob. Code, § 16061.8), without leave to amend, the demurrer to the Petition to validate the Sixth Trust Amendment, the Petition to Confirm Assets Held by Mark Watson Pass to Petitioner as the Sole Beneficiary and Successor Trustee, and the apparent sub-petitions to Invalidate the Fourth and Fifth Trust Amendments, and for Declaratory Relief. The Probate Court found that Nicole’s petition to invalidate the Fourth and Fifth Trust Amendments and to validate the Sixth Trust Amendment (and related claims) had been filed more than 10 months following the expiration of the 120-day period set forth in Probate Code section 16061.8, and was therefore barred. With respect to the petition for accounting, the Probate Court sustained the demurrer with leave to amend to the extent it sought an accounting within the terms of Probate Code section 17200(b)(7)(B) and (C).
Nicole appealed the Probate Court’s decision on March 10, 2023. The appeal is fully briefed, but has not yet been set for oral argument.
On June 22, 2023, Nicole filed the current 74-page complaint, allegedly both individually and in her capacities as successor trustee and beneficiary of The Borimir and Virginia Jordan Family Trust, and as beneficiary and successor-in-interest to the Estate of Virginia Jordan, deceased. The complaint names as defendants the law firm of Rogers, Sheffield & Campbell, LLP, Angela Jordan Hart, Jennifer Jordan, Adult Protective Services employee Jamie Cathleen Green (Green), and Amethyst Eve Sheffield and Sheila T. Price), as Co-Personal Representatives of the Estate of Homer G. Sheffield Jr., deceased (Price or, collectively, Sheffield).
Demurrers by RSC and Price/Sheffield: RSC and Price/Sheffield (collectively referred to as the “attorneys”) have demurred to the complaint as a whole on statute of limitations grounds, to each cause of action asserted against them on the ground that Nicole has no standing to assert representative claims for damages allegedly suffered by her parents since she is not the successor trustee of the trust or the personal representative of her parents’ estates, to the entire complaint based upon a lack of duty by defendants to Nicole, to the fraud-based claims based upon Nicole’s failure to allege sufficient facts with respect to how any conduct by defendants could possibly have caused her to rely to her detriment, to the complaint based upon Nicole’s failure to mitigate her damages by failing to timely bring the Sixth Amendment to the attention of the Probate Court, and asserts additional defects with respect to specific causes of action, including: (1) the negligence claim is duplicative of the claims for breaches of fiduciary duty and confidentiality, and legal malpractice; (2) the breach of fiduciary duty claim does not allege any damages suffered by the Trust or the Trustors, only Nicole; (3) the breach of confidentiality claim does not allege any damage; (4) the legal malpractice claim is predicated on an allegation that the attorneys caused the Jordan Parents to be without a Sixth Amendment, which directly contradicts the allegation that they executed the Sixth Amendment without counsel, and there is no allegation that the Sixth Amendment was in any way defective due to the manner in which it was drafted, thereby admitting a lack of causation or resulting damage; (5) the contract claims do not allege any contract between Nicole and the attorneys, (6) the constructive fraud claim does not allege the required element that the attorneys gained an advantage; and (7) the negligence claim alleges that the attorneys were a substantial factor in causing harm to the Jordan Parents, but that is not the standard in a client’s negligence action against an attorney.
In support of their demurrers, the attorneys have both sought judicial notice of documents within the underlying Probate Court file, Case No. 21PR00040); Matter of Borimir and Virginia Jordan Family Trust, including (A) Petition for Order Confirming Petitioner as Trustee and Confirming Trust Assets; (B) Order Confirming Mark Watson as Trustee and Confirming Trust Assets; (C) Nicole’s Petition to (1) Establish Her as Sole Successor Trustee & Sole Beneficiary and to Establish Trust Assets Under Sixth Trust Amendment, and For Declaratory Relief; and (D) Minute Order dated January 19, 2023.
Motion to strike by RSC and Price: RSC and Price have moved to strike the following from Nicole’s complaint: (1) Prayer at ¶ 4 (Page 72): "for general damages according to proof."; (2) Prayer at ¶ 4 (Page 72): "for exemplary and punitive damages according to proof."; (3) Prayer at ¶ 6 (Page 72): "for general damages according to proof."; (4) Prayer at ¶ 8 (Page 72): "for general damages according to proof”; (5) Prayer at ¶ 11 (Page 72): "for general damages according to proof."; (6) Prayer at ¶ l3 (Page 72): "for exemplary and punitive damages according to proof."; (7) Prayer ¶ 14 (Page 72): "Attorney's Fees under Code of Civil Procedure ¶ [sic] 1021.5.”; (8) Prayer at ¶18 (Page 72): "for general damages according to proof."; (9) Prayer at ¶ 20 (Page 72): "for exemplary and punitive damages according to proof."; (10) Prayer at ¶ 24 (Page 72): "for exemplary and punitive damages according to proof."; (11) Prayer at ¶ 28 (Page 72): "for exemplary and punitive damages according to proof."; (12) Prayer at ¶ 3 (Page 73): "for exemplary and punitive damages according to proof."; (13) Prayer at ¶ 9 (Page 73): "for general damages according to proof."; and (14) Prayer at ¶ 12 (Page 73): "for general damages according to proof'".
The motions contend that the complaint does not allege a valid basis for recovery of attorneys’ fees, and fees pursuant to Code of Civil procedure section 1021.5 [court has discretion to award fees in an action which has resulted in the enforcement of an important right affecting the public interest], as alleged in the complaint, is not applicable in this action which seeks to exclusively benefit Nicole. It further argues that in an action against an attorney, emotional distress and other non-economic general damages are not recoverable, except when an attorney’s negligence results in a client being wrongly incarcerated, which is not present here. The motion further contends that the allegations of the complaint are insufficient to support a claim for punitive damages.
Demurrer by Green: Green has demurred to each cause of action alleged against her. She asserts that, as a public employee, a government claim must be both timely filed and acted upon prior to the institution of an action against her, and that (1) the claim which was filed was untimely, and Nicole failed to commence late claim presentation proceedings, and (2) the action was filed and served upon Green prior to the date upon which claim was rejected by County as untimely. The demurrer also contends that the allegations of the complaint are insufficient to state causes of action against Green for (1) intentional interference with contractual relations, in failing to allege facts to show that Green knew of any fee agreement between the Jordans and the law firm, (2) conspiracy to defraud, given that there is no such independent cause of action for conspiracy, (3) dependent adult emotional abuse and harassment and (4) elder emotional abuse and harassment, since there is no independent cause of action for emotional abuse and harassment of a dependent adult or elder, who must instead seek a restraining order excluding the perpetrator from his or her residence (Welf. & Inst. Code, § 15657.03), and (5) intentional infliction of emotional distress, since no facts are alleged showing Green engaged in outrageous conduct directed at plaintiff, for which plaintiff sustained severe emotional distress.
In support of her demurrer, Green has sought judicial notice of (A) the Government Claim plaintiff filed with County of Santa Barbara on June 16, 2023 (served by mail on June 14, 2023); and (B) County of Santa Barbara’s Notice returning plaintiff’s Government Claim for failure to present a timely claim, which provides that Nicole’s only recourse at that time was to apply without delay to the County of Santa Barbara for leave to present a late claim, citing Government Code sections 911.4-912.2, and 946.6. Judicial notice of these documents is sought under authority of Evidence Code section 452(h), on the basis that judicial notice may be taken 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.
Motion to strike by Green: Green moves to strike the claim for exemplary and punitive damages, set forth at Page 73, line 5, on the grounds that the allegations are insufficient to support an award of punitive damages, and punitive damages cannot be alleged against the government under Government Code section 818.
Oppositions: Nicole has opposed all demurrers and motions to strike.
ANALYSIS: For reasons more fully articulated below:
1. The statute of limitations demurrer by RSC will be sustained, with leave to amend, as to all causes of action. All other grounds raised by the demurrer are mooted by this ruling.
2. The statute of limitations demurrer by Price will be overruled as to the first cause of action for breach of fiduciary duty, and will be sustained as to all other causes of action alleged against Price, with leave to amend. For the reasons explained below, all other grounds raised by the demurrer are mooted by this ruling.
3. The motions to strike by RSC and Price will be granted in their entirety, with leave to amend.
4. The demurrer by Green is sustained, with leave to amend, based upon the failure of the complaint to allege any compliance with the claims presentation requirement, which resulted in its failure to make any effort to plead around the claim defects raised by Green’s demurrer. All other grounds raised by the demurrer are mooted by this ruling.
5. The motion to strike by Green is likewise mooted by the ruling on her demurrer.
6. Green will be granted leave to amend her complaint, and any such First Amended Complaint must be filed no later than January 8, 2024, or such other date as this Court might specify at the hearing.
NOTE: The Court notes that plaintiff’s complaint has multiple technical deficiencies, which have complicated the ability of this Court to locate specific allegations and analyze its contents. First, the complaint commences with ¶ 1 and proceeds through ¶ 54, before starting over again at ¶ 1 and proceeding through ¶ 104, skipping then to ¶ 135 and proceeding to ¶ 201, skipping to ¶ 230 and proceeding through ¶ 336. Second, the Prayer starts with Prayer ¶ 1 and proceeds through ¶ 28 (encompassing prayers for the first eight causes of action), before starting over at Prayer ¶ 1 (related to the Ninth cause of action) and proceeding through ¶ 35. Third, two of the causes of action (Sixteenth cause of action for reformation of trust, and Seventeenth cause of action for declaratory relief) are not expressly alleged or directed against any defendant. The numbering deficiencies make references to specific allegations—by either the court or by any of the parties—difficult and problematic. To the extent that Nicole is being permitted any leave to amend, the Court expects each of these deficiencies to be corrected in the amended pleading.
1. Requests for judicial notice.
In support of their demurrers, the attorneys have both sought judicial notice of documents within the underlying Probate Court file, Case No. 21PR00040); Matter of Borimir and Virginia Jordan Family Trust, including (A) Petition for Order Confirming Petitioner as Trustee and Confirming Trust Assets; (B) Order Confirming Mark Watson as Trustee and Confirming Trust Assets; (C) Nicole’s Petition to (1) Establish Her as Sole Successor Trustee & Sole Beneficiary and to Establish Trust Assets Under Sixth Trust Amendment, and For Declaratory Relief; and (D) Minute Order dated January 19, 2023.
In support of her demurrer, Green has sought judicial notice of (A) The Government Claim plaintiff filed with County of Santa Barbara on June 16, 2023 (served by mail on June 14, 2023); and (B) County of Santa Barbara’s Notice returning plaintiff’s Government Claim for failure to present a timely claim. Judicial notice of these documents is sought under authority of Evidence Code section 452(h), on the basis that judicial notice may be taken 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.
In Nicole’s oppositions to the RSC and Price demurrers, she referred to an “Exhibit D to Plaintiff’s Request for Judicial Notice.” Nicole did not submit a Request for Judicial Notice with her oppositions to the demurrers. However, the Court has located a document entitled “Nicole Jordan’s Request for Judicial Notice,” which Nicole filed contemporaneously with her complaint. There is no separate Exhibit D in the Request, which lists the documents of which judicial notice is requested by number. However, there is an Exhibit D to Exhibit 5, the petition filed by Mark Watson on January 27, 2020 in Case No.21PR00040. That exhibit is a November 11, 2020 letter from Homer Sheffield to Watson.
Matter to be judicially noticed must be relevant to the issues in the case. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, disapproved on other grounds by In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1276.)
Pursuant to Evidence Code section 452(d), judicial notice may be taken of the records of any state court. However, not all matters contained in court records are indisputably true, and while the existence of any document in a court file may be judicially noticed, the truth of matters asserted in such documents is not necessarily subject to judicial notice. (Copenbarger v. Morris Cerullo World Evangelism, Inc. (2018) 29 Cal.App.5th 1, 14.) A court cannot take judicial notice of the truth of hearsay statements just because they are part of a court record or file. (Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145-147.)
Pursuant to Evidence Code section 452(h), judicial notice may be taken 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.
If judicial notice is requested for matters judicially noticeable under Section 452, the court “shall” take judicial notice if the requesting party (a) give each adverse party sufficient notice of the request to enable the party to prepare to meet the request, and (b) furnishes the court with sufficient information to enable it to take judicial notice. (Evid. Code, § 453.) In law and motion matters, a party requesting judicial notice under Sections 452 or 453 must provide the court and each party with a copy of the material. (Cal. Rules of Court, Rule 3.1306, subd. (c); Lammers v. Superior Court (2000) 83 Cal.App.4th 1309, 1327.
The Court will take judicial notice of the existence of all such documents, but not necessarily of the truth of matters asserted in such documents. For example, the existence of the letter from Mr. Sheffield to Mr. Watson can be judicially noticed, as a result of its inclusion as an exhibit to the petition filed by Mr. Watson with the Probate Court. However, the truth of the matters set forth in the letter are not proper subjects of judicial notice.
2. Standards on demurrer.
The court’s task in ruling on a demurrer is to determine whether the complaint states a cause of action. (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300.) A demurrer admits the truth of all material facts properly pleaded (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967), no matter how unlikely or improbable they may be (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604), or how unlikely it will be that plaintiff will be able to prove the claim (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214). The court also assumes the truth of all reasonable inferences that may be drawn from the properly pleaded facts. (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1083.) The assumption of truth does not apply, however, to contentions, deductions, or conclusions of law or fact. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters, and therefore lies only where the defects appear on the face of the pleading or are judicially noticed. (Id.)
Where the allegations of the complaint or matters of which judicial notice may be taken reveal a defense to the action, such as a statute of limitations bar, the plaintiff must “plead around” the defense by alleging specific facts which would avoid the apparent defense. Absent such allegations, the complaint is subject to demurrer for failure to state a cause of action. (See Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 825; Lee v. Escrow Consultants, Inc. (1989) 210 Cal.App.3d 915, 917, 921-922.) Similarly, where plaintiff relies on a theory of fraudulent concealment to save a cause of action that otherwise appears on its face to be time-barred, he or she must specifically plead facts that, if proved, would support the theory. (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 641.
3. Standards on motion to strike.
On motion to strike, a court can strike out any irrelevant, false, or improper matter inserted in a pleading. (Code Civ. Proc., §§ 435, subd. (b)(1); 436, subd. (a).) Just as with a demurrer, the grounds for a motion to strike must appear on the face of the pleading or from matter which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).) A demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint is an “immaterial allegation,” and is considered “irrelevant matter” subject to a motion to strike. (Code Civ. Proc., §§ 431.10, subds. (b)(3), (c), and 436, subd. (a).)
I. Demurrers by RSC and Price
1. Demurrers by attorneys based upon the statute of limitations.
A. Legal authority.
1. Statutes of limitation, generally.
An injury suffered by reason of a defendant’s conduct gives rise to a single cause of action, regardless of how many theories are pled by the complaint. Where the injury is suffered by reason of an attorney’s professional negligence, the gravamen of the claim is legal malpractice, regardless of whether it is pled in tort or contract. (Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 65.) The gravamen of a complaint and the nature of the right sued on, rather than the form of the action or relief demanded, determines which statute of limitation applies. (Id. at p. 66, citing Day v. Greene (1963) 59 Cal.2d 404, 411.)
The applicable statute of limitations does not begin to run until the cause of action accrues, i.e., the party owning it is entitled to begin and prosecute an action thereon. (Romano v. Rockwell International, Inc. (1996) 14 Cal.4th 479, 487.)
2. Section 340.6(a).
Code of Civil Procedure section 340.6 provides, 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. If the plaintiff is required to establish the plaintiff's factual innocence for an underlying criminal charge as an element of the plaintiff's claim, the action shall be commenced within two years after the plaintiff achieves postconviction exoneration in the form of a final judicial disposition of the criminal case. Except for a claim for which the plaintiff is required to establish the plaintiff's factual innocence, the time for commencement of legal action shall not 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 those facts are known to the attorney, except that this subdivision shall toll only the four-year limitation.
(4) The plaintiff is under a legal or physical disability that restricts the plaintiff's ability to commence legal action.
(5) A dispute between the lawyer and client concerning fees, costs, or both is pending resolution under Article 13 (commencing with Section 6200) of Chapter 4 of Division 3 of the Business and Professions Code. As used in this paragraph, “pending” means from the date a request for arbitration is filed until 30 days after receipt of notice of the award of the arbitrators, or receipt of notice that the arbitration is otherwise terminated, whichever occurs first. [Emphasis added.]
If exemptions are specified in a statute, the court may not imply additional exemptions unless there is a clear legislative intent to the contrary. (Lee v. Hanley, supra, citing Sierra Club v. State Board of Forestry (1994) 7 Cal.4th 1215, 1230.)
Section 340.6(a) does not bar a claim arising from an attorney’s performance of services that are not “professional services,” meaning services performed by an attorney which can be judged against the skill, prudence and diligence commonly possessed by other attorneys. (Ibid, citing Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 64.) It does not apply to claims involving an attorney’s provision of services unrelated to the practice of law. (Ibid, citing Quintilliani, supra, which involved an attorney’s provision of concert promotion services.) It does apply, however, to an attorney’s provision of nonlegal professional services governed by the attorney’s professional obligations, such as accounting, bookkeeping, and holding property in trust. (Id, at p. 1238.) Misconduct does not “arise in” the performance of professional services for purposes of section 340.6(a) merely because it occurs during the period of legal representation, or because the representation brought the parties together and thus provided the attorney the opportunity to engage in the misconduct, and does not even necessarily apply whenever a plaintiff’s allegations, if true, would entail a violation of an attorney’s professional obligations, since those obligations are varied and often overlap with obligations that all persons subject to California laws have (e.g., an obligation not to sexually batter others, which is prohibited by both Civil Code section 1708.5(a), and the California Rules of Professional Conduct). (Id.)
For purposes of Section 340.6(a), the question is not simply whether a claim alleges misconduct that entails the violation of a professional obligation, but whether the claim, in order to succeed, necessarily depends on proof that an attorney violated a professional obligation as opposed to some generally applicable nonprofessional obligation. (Lee v. Hanley, supra, 61 Cal.4th at p. 1238.)
For example, if fiduciary obligations arise solely from an attorney-client relationship, the statute of limitations for legal malpractice is applicable to a cause of action for breach of fiduciary duties. (Quintilliani v. Mannerino, supra, 62 Cal.App.4th at p. 67, citing Pompilio v. Kosmo, Cho & Brown (1995) 39 Cal.App.4th 1324 [since the breach of fiduciary duty cause of action concerned attorney’s acts and omissions while representing plaintiff, it sounded in legal malpractice].) Further, where claims for breach of contract, rescission, constructive fraud, elder abuse, and negligent infliction of emotional distress are based upon a claim that an attorney did not provide the full range of professional services for which he was paid, or that the services he performed were not of the quality or skill for which he was paid, such claims are subject to Section 340.6(a). (Austin v. Medicis (2018) 21 Cal.App.5th 577, 587, 589.)
B. Party contentions
The complaint’s causes of action alleged against RSC and/or Price (as personal representative of the estate of Homer Sheffield, the Jordans’ estate planning attorney), include (1) breach of fiduciary duty, (2) breach of duty to preserve confidentiality, (3) legal malpractice, (4) breach of contract, (6) breach of the implied duty of good faith and fair dealing, (7) constructive fraud, (8) fraud by concealment, (9) intentional misrepresentation, (11) negligent misrepresentation, and (12) negligence. RSC and Price contend that each of these causes of action is barred by the one-year statute of limitations set forth in Section 340.6(a). Given that Nicole made the same factual allegations in the verified petition she filed in the Probate action in March 2021, RSC and Price contend that Nicole and her counsel were aware of these facts more than a year before she filed the action, and cannot therefore claim delayed discovery of her claims.
In her complaint, Nicole alleges (a) that her breach of contract and breach of fiduciary duty causes of action are subject to a four year statute pursuant to Code of Civil Procedure sections 337 and 343, respectively, and that both are subject to the delayed discovery rule; (b) that her claims for fraud, including her claim for negligent misrepresentation, are subject to the three year statute pursuant to Code of Civil Procedure section 338(d); (c) that her legal malpractice cause of action is subject to the “one year from the date of discovery” limitation set forth in Code of Civil Procedure section 340.6(a); that her negligence-related causes of action are subject to a “two years from the date of discovery” limitation of Code of Civil Procedure section 335.1, and (d) that all applicable statutes of limitations which may have expired are tolled and extended due to the doctrines of late discovery and equitable estoppel. (Complaint @ ¶¶ 192-197.)
In opposition to the RSC and Price demurrers, Nicole did not address the authorities cited by RSC and Price in their demurrers, related to the application of Section 340.6(a) to causes of action based upon an attorney’s breach of a professional obligation, regardless of what they are entitled. Rather, Nicole continued to contend, without citation of authority, that the tort related causes of action against these defendants are not subject to the one-year statute of limitations. She further continued to contend that her breach of contract and breach of fiduciary duty claims were subject to four-year limitation periods. She contends each limitation period is subject to the delayed discovery rule, and based upon her contention that she did not receive discovery from RSC until June 2022, and did not receive records from APS until December 15, 2022, that none of the causes of action commenced running until December 15, 2022.
C. Application to causes of action other than intentional fraud.
Nicole’s claims are contrary to law. First, the petition she filed in the Probate Court, of which RSC and Price both have requested judicial notice, made clear that she had full knowledge of her claims against both RSC and attorney Sheffield more than a year prior to her filing of this action. Second, as set forth at some length above, it does not matter what the cause of action is entitled; if it is a cause of action other than actual fraud that is based upon the breach of an attorney’s professional obligation, it is subject to the one-year statute of limitations set forth in Section 340.6.
As a result, Nicole’s third cause of action for legal malpractice, which accuses RSC and Sheffield of the mishandling of their estate planning, is subject to and barred by the statute of limitations set forth in Section 340.6(a), requiring that the demurrer to that cause of action be sustained as to each of these defendants.
With respect to the other causes of action which Nicole has alleged against these defendants, the Court must analyze their allegations in order to ascertain whether proof of each such claim necessarily depends on proof that an attorney violated a professional obligation, as opposed to a generally applicable nonprofessional obligation. (See Lee v. Hanley, supra, 61 Cal.4th at p. 1238.) If it depends on proof that the attorney violated a professional obligation, it is subject to Section 340.6(a).
First cause of action for breach of fiduciary duty The cause of action alleges that attorney Sheffield, of the law firm of RSC, was the Jordans’ long-time attorney who prepared all of their estate planning documents, and also was named as successor co-trustee under the Fourth Amendment to the Trust. The complaint had earlier alleged that Sheffield was assisted by a paralegal employed by RSC, Karin Stein (Complaint @ ¶ 35), and that Sheffield and Stein were at all times acting within the scope of their employment by RSC. (Complaint @ ¶ 41.) It alleges that “RSC and Sheffield, acting as attorneys and co-trustees,” had a duty to act in the highest good faith toward their principals and intended beneficiaries, and stood in a fiduciary relationship with Nicole acting as both attorneys and co-trustees, and breached that duty in various respects. (Complaint @ ¶ 230.)
With respect to attorney Sheffield, the allegation that the duty arose in part from his capacity as a trustee of the trust likely precludes the entire cause of action from being found to be barred by Section 340.6(a). While Sheffield may have become a trustee (or successor trustee) of the Trust because he was the estate planning attorney for the Jordans, one does not have to be an attorney to be a trustee. In fact many trustees are not attorneys, and the provision of trustee-related services do not constitute “professional services” for purposes of Section 340.6(a). Because at least the portion of the cause of action for breach of fiduciary duty alleged against Price, as co-personal representation of Sheffield’s estate, arises from conduct other than Sheffield’s provision of professional services, Price’s demurrer to the case of action based upon the statute of limitations set forth in Section 340.6(a), must therefore be overruled.
With respect to RSC, however, given that services as a trustee or successor trustee of a trust are not professional services, and would necessarily have been conducted by attorney Sheffield in a non-professional capacity, the fact that he was an employee of or partner in RSC would not be sufficient for RSC to have liability for any breaches of fiduciary duty in which Sheffield participated in his capacity as trustee or successor trustee of the Trust. Further, there are insufficient allegations in the complaint to show how or why RSC would have liability for any breaches of fiduciary committed by Sheffield in his capacity as trustee or successor trustee of the Trust (as opposed to breaches in his capacity as the Jordans’ estate planning attorney, which would in any event be barred by Section 340.6(a).) Consequently, the statute of limitations demurrer interposed by RSC to the first cause of action will be sustained.
Second cause of action for breach of duty to preserve confidentiality The second cause of action is based upon California Rules of Professional Conduct, Rule 1.6(a), and Business & Professions Code section 6068(e)(1), both applicable only to attorneys. The cause of action alleges that RSC and Sheffield breached duties they owed as attorneys by divulging confidential information, although neither the attorney-client privilege nor the attorney work product protection had been waived. Because proof of the cause of action necessarily depends on proof that an attorney violated a professional obligation, the claim is subject to the limitation set forth in Section 340.6(a), and is barred. Consequently, the statute of limitations demurrers to this cause of action, made by both RSC and by Price, will be sustained.
Fourth cause of action for breach of contract The fourth cause of action alleges that the Jordans entered into a written fee agreement with RSC and Sheffield in 1998, under which RSC and Sheffield agreed to represent the Jordans in their estate planning matter in exchange for Jordans’ payment of attorneys’ fees and costs, and that RSC and Sheffield breached the agreement by failing to provide estate planning services that adhered to the Jordans’ instructions, resulting in harm to the Jordans. Once again, proof of the cause of action necessarily depends on proof that Sheffield violated a professional obligation, and is subject to the limitation set forth in Section 340.6. Consequently, the statute of limitations demurrers to this cause of action, made by both RSC and Price, will be sustained.
Sixth cause of action for breach of the implied duty of good faith and fair dealing The sixth cause of action alleges that the Jordans were parties to the fee agreement with RSC and Sheffield, and either did all significant things the contract required them to do, or were excused from doing any other things. It alleges that RSC and Sheffield acted in bad faith when refusing to follow the Jordan’s instructions to prepare the Sixth Amendment as they wished, failing to use Sheffield’s written authorization to determine the Jordans’ capacity to amend their trust for the sixth time, failed to investigate Angela and Jennifer’s allegations about Nicole, and disclosed information about the Jordans’ estate planning documents to third parties, which prevented Nicole from receiving the benefits her parents intended to confer on her through the instructions they gave to RSC and Sheffield in how to prepare the Sixth Amendment. Once again, proof of the cause of action necessarily depends on proof that Sheffield violated a professional obligation, and is therefore subject to the limitation set forth in Section 340.6(a). Consequently, the statute of limitations demurrers to this cause of action, made by both RSC and Price, will be sustained.
Seventh cause of action for constructive fraud The seventh cause of action alleges that RSC and Sheffield were the Jordans’ trust and estate planning attorneys, and were charged with acting on the Jordans’ behalf in their trust and estate matters, and did so when they drafted the trust and its amendments. It alleges RSC and Sheffield received false information from Angela, Jennifer, and Green about Nicole that influenced their conduct toward the Jordans in following their instructions regarding the Sixth Amendment, and misled the Jordans by failing to disclose their communications with Angela, Jennifer, and Green, depriving the Jordans and Nicole of the opportunity to respond to those allegations and their wish to exclude Angela and Jennifer from receiving anything under the Sixth Amendment and leave everything to Nicole. Once again, proof of the cause of action necessarily depends on proof that Sheffield violated a professional obligation, and is therefore subject to the limitation set forth in Section 340.6(a). Consequently, the statute of limitations demurrers to this cause of action, made by both RSC and Price, will be sustained.
Eleventh cause of action for negligent misrepresentation The eleventh cause of action alleges that RSC/Sheffield represented to the Jordans that they were acting to fulfill their estate planning goals by drafting a Sixth Amendment that would meet those goals, but the representation was untrue, as they had no intention of doing anything that would change either the trustees of the trust or exclude Angela and Jennifer from receiving bequests from the trust. They may have believed the representation was true, but had no reasonable grounds for such belief when they were actively subverting the goals by drafting versions of the Sixth Amendment that were not agreed-to by the Jordans. RSC/Sheffield intended that the Jordans rely on their representation, the Jordans reasonably relied, and their reliance was a substantial factor in causing their harm. They were harmed insofar as they believed RSC/Sheffield were acting in their bests interests and drafting a Sixth Amendment that would fulfill their estate planning goals, and were instead caused emotional distress and other damages. As noted above, the Section 340.6(a) exception for “actual fraud” applies only to intentional fraud, not to negligent misrepresentation. Because, once again, proof of this cause of action necessarily depends on proof that Sheffield violated a professional obligation, and is therefore subject to the limitation set forth in Section 340.6(a). Consequently, the statute of limitations demurrers to this cause of action, made by both RSC and Price, will be sustained.
Twelfth cause of action for negligence The twelfth cause of action alleges that RSC/Sheffield failed to use a level of skill, knowledge and care during their representation of the Jordans that a reasonably careful attorney would use in similar circumstances, and had a duty to exercise that standard of care in their representation of the Jordans. They breached their duty insofar as they breached their fiduciary duties and duties of confidentiality to the Jordans and committed acts of fraud against them, among other things. Their negligence was a substantial factor in causing harm to the Jordans, who were harmed insofar as their testamentary goals were not achieved, causing them emotional distress. Once again, proof of the cause of action necessarily depends on proof that Sheffield violated a professional obligation, and is therefore subject to the limitation set forth in Section 340.6(a). Consequently, the statute of limitations demurrers to this cause of action, made by both RSC and Price, will be sustained.
D. Application to claims for intentional fraud.
As noted above, the limitations provisions set forth in Section 340.6 do not apply to well-pleaded claims for intentional fraud. (See Code Civ. Proc., § 340.6, subd. (a); Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 69-70; Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 1105, 1123.) To such well-pleaded claims for intentional fraud, the courts have generally applied the three year limitation period of Code of Civil Procedure section 338(d).
As a result, the Court needs to analyze the two claims for intentional fraud alleged against RSC and Price (Sheffield) to determine whether they adequately state claims for intentional fraud, so that it can ascertain which limitations statute applies. The Court notes that RSC and Price both interposed demurrers to the intentional fraud causes of action, contending that they failed to adequately allege facts constituting fraud. In particularly, they challenged the existence of either reliance or causation in either cause of action.
1. Pleading fraud.
With respect to fraudulent concealment, the fraud consists of the suppression of fact by one who is bound to disclose it, or who gives information of other facts that are likely to mislead for want of communication of that fact. (Civ. Code, § 1710, subd. (3)); People v. Highland Fed. Sav. & Loan (1993) 14 Cal.App.4th 1692, 1718.) Concealment is actionable generally under four circumstances: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. (Bank of America Corp. v. Superior Court (2011) 198 Cal.App.4th 862, 870-871.) Specific factual pleading of fraudulent concealment would necessarily entail the pleading of all facts necessary to establish one or more of the circumstances giving rise to the duty to disclose.
Reliance exists when the misrepresentation or nondisclosure was an immediate cause of the plaintiff’s conduct which altered his or her legal relations, and when without such misrepresentation or nondisclosure he or she would not, in all reasonable probability, have entered into the contract or other transaction. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.) Reliance can be shown in a fraudulent omission case by establishing that had the omitted information been disclosed, the plaintiff would have been aware of it and behaved differently. (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1193-1194.) In essence, reliance does not exist unless a plaintiff pleads and proves that, because he did not know the truth, he relied on the false representation (or omission of the truth) by altering his legal position in some manner, e.g.¸ by entering into a transaction he would not have been involved in, but for his reasonable reliance on the false representation. (See 5 Witkin, Cal. Proc. (5th edition), Pleading, § 730 Actual Reliance: Causal Connection Between Belief and Action. (2008); 2020 update.) In establishing actual reliance, the plaintiff must show that the reliance was reasonable by showing that (1) the matter was material in the sense that a reasonable person would find it important in determining how he or she would act, and (2) it was reasonable for the plaintiff to have relied on the misrepresentation. (Hoffman v. 162 North Wolfe LLC, supra, 228 Cal.App.4th at p. 1194.)
2. Application.
a. Eighth cause of action for fraudulent concealment.
Nicole’s eighth cause of action alleges that the Jordans and RSC/Sheffield were in a fiduciary relationship insofar as they were the Jordans’ trusts and estates attorneys, and that RSC/Sheffield intentionally failed to disclose numerous communications from Angela, Jennifer, and Green, making false allegations against Nicole about her drug abuse, and financial abuse and neglect of the Jordans. RSC/Sheffield intended to deceive the Jordans by concealing the communications, and had the communications been disclosed, the Jordans would have been able to object to and disagree with the allegations, and inform RSC/Sheffield that they were not to communicate with Angela, Jennifer, or Green about anything involving their estate planning. The concealment was a substantial factor in the harm suffered by the Jordans, in RSC and Sheffield believing the false allegations, resulting in their suffering emotional distress and other damages.
In demurring to the cause of action on the ground that it failed to state facts sufficient to constitute a cause of action for fraudulent concealment, RSC and Price contended that Nicole did not specifically alleged how anything purportedly done by RSC or Sheffield could possibly have cause Nicole to rely to Nicole’s detriment. Nicole was not Sheffield’s client, and could not have reasonably relied on a lack of disclosure when she was never entitled to one. Further, the allegations of the complaint confirm that Borimir and Virginia did not rely on the non-disclosure, and proceeded to draft a Sixth Amendment on their own. Consequently, there was no actual reliance.
In opposition, Nicole does not expressly address the contention that her cause of action for intentional concealment fails to establish anything upon which she relied to her detriment, causing her damages. Instead, she summarily contends that the fraud-based causes of action are sufficiently alleged, given that they all incorporate by reference the detailed statement of facts which show that RSC fraudulently conspired with Angela, Jennifer, and Green to deprive Nicole of her inheritance. She also argues that the “Fifth Cause of Action for Intentional Interference with Contractual Relations, is akin to the tort of Intentional Interference with Expected Inheritance,” and proceeds to discuss such a cause of action, contending that RSC and Price’s claims that she had no standing to assert a claim against them was erroneous..
Neither RSC nor Price are parties to the intentional interference with contractual relations claim. Further, no cause of action for intentional interference with expected inheritance has been alleged in the complaint.
More importantly, however, the allegations of the cause of action do not allege any conduct by RSC or Sheffield upon which Nicole actually relied, and which bore any relation to the causation of her damages. When Sheffield failed to draft a Sixth Amendment to the trust, Virginia and Borimir proceeded to draft and execute one of their own. Indeed, it appears that Nicole’s failure to timely present their self-drafted Sixth Amendment to the trust is what resulted in her alleged damages. Consequently, no cause of action for intentional concealment has been sufficiently alleged.
Because no adequate cause of action for intentional concealment has been alleged, to the extent that any recognized cause of action even exists, it is subject to the limitations period set forth in Section 340.6(a), rather than the longer limitations period set forth in Section 338(d) and, just as is true with the other causes of action, is barred by the terms of Section 340.6(a). Consequently, the Court will sustain the statute of limitations demurrer to the putative cause of action for intentional concealment.
b. Ninth cause of action for intentional misrepresentation.
As against RSC and Price, Nicole’s ninth cause of action alleges that RSC and Sheffield represented to the Jordans that they were representing their estate planning interests and had undivided loyalty to them, but the representations were false, and RSC and Sheffield instead subverted the Jordan’s estate planning interests in drafting a Sixth Amendment that did not express their testamentary wishes, and would result in Angela and Jennifer inheriting more of their wealth. They intended that the Jordans rely on their representations, and the Jordans reasonably relied on the representations, which were a substantial factor in causing the harm to the Jordans and Nicole.
Once again, the allegations of the complaint do not allege facts to support the conclusion that Jordan justifiably relied on any intentional misrepresentations made by these defendants. To the extent that defendants breached their representation to Borimir and Virginia that they were representing their estate planning wishes and had undivided loyalty to them by failing to draft a Sixth Amendment to the trust that did not express Borimir and Virginia’s testamentary wishes, Borimir and Virginia clearly did not rely upon any such representations, given that they allegedly took it upon themselves to draft and execute a Sixth Amendment to the trust on their own. It was not any legal deficiency in their self-drafted Sixth Amendment which caused Nicole’s alleged damages. Rather, it was Nicole’s failure to timely present that Sixth Amendment to the Probate Court which caused her alleged damages. The allegations do not support the conclusion that any conduct by the Jordans’ estate planning attorneys in failing to fulfill the Jordans’ testamentary wishes either caused or contributed to Nicole’s alleged damages. As a result, no valid cause of action for intentional misrepresentation has been sufficiently alleged, and to the extent the allegations constitute any other recognized cause of action, it is subject to the limitations provisions of Section 340.6(a) rather than the longer limitations provisions of Section 338(d). Consequently, the Court will sustain the statute of limitations demurrer to the putative cause of action for intentional misrepresentation.
2. Remaining arguments made in the RSC and Price demurrers.
The only cause of action against these demurring defendants found not to be barred by the statute of limitations provisions set forth in Code of Civil Procedure section 340.6(a) is the breach of fiduciary duty cause of action alleged against Price, arising from Sheffield’s actions as a trustee. The Price demurrer only addressed that cause of action outside of the Section 340.6(a) context, by contending that lawyers do not owe fiduciary duties to non-clients. Because the cause of action survives the statute of limitations bar solely because of Sheffield’s non-professional duties as a trustee of the Jordans’ trust, however, this argument does not apply, and need not be addressed by the Court.
Since all causes of action against RSC, and all causes of action against Price other than the breach of fiduciary duty cause of action were found subject to the statute of limitations bar, the Court need not address the other arguments raised in the RSC and Price demurrers.
II. Motions to strike by defendants RSC and Price
RSC and Price seek to strike Nicole’s prayer for attorneys’ fees under Code of Civil Procedure section 1021.5, Nicole’s claims for non-economic damages, and the punitive damage allegations. The arguments were largely mooted by the ruling on the RSC and Price demurrers. However, because at least the breach of fiduciary duty cause of action against Price survives the current demurrer, Court will address the merits of the issues.
1. Attorneys’ fees.
Attorneys’ fees are not recoverable unless a fee award is expressly authorized by either statute or the parties’ contract. (Ilshin Investment Company, Ltd. v. Buena Vista Home Entertainment, Inc. (2011) 195 Cal.App.4th 612, 627.) Consequently, pursuant to the authority provided by Code of Civil Procedure sections 431.10, subds. (b)(3) and (c), 435, 436, and 437, subd. (a), an allegation seeking attorneys’ fees may properly be the subject of a motion to strike, if the basis for the claim is not apparent from the face of the pleading.
Nicole prays for an award of attorneys’ fees pursuant to Code of Civil Procedure section 1021.5. Section 1021.5 authorizes an award of attorneys’ fees to a successful party in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.
RSC and Price contend that the prayer for such fees is improper in this case, and should be stricken, since the action is to benefit Nicole alone, and the benefit of pursuing it does not inure primarily to the public, as required by Section 1021.5. (Choi v. Orange County Great Park Corp (2009) 175 Cal.App.4th 524.) In opposition, Nicole contends that the significant benefit to the public is to maintain the sanctity of the attorney-client relationship, and deter attorneys from harming the best interests of their client or stealing from them. In reply, RSC and Price reiterate that this is a private matter in which Nicole seeks to recover what she believes is her rightful inheritance, and there is no potential benefit to the public to support a claim for fees pursuant to Section 1021.5.
The Court agrees with RSC and Price. There are no facts alleged in the complaint to support the conclusion that this action could confer any significant benefit on the general public or a large class of persons, nor is this even the type of action which could confer such a public benefit. The Court will grant the motion to strike the prayer for attorneys’ fees pursuant to Section 1021.5, with leave to amend.
2. Punitive damages.
The courts have long been charged with an important gate-keeping function with respect to claims for punitive damages. Because of the inflammatory nature of a punitive damage allegation, the law requires that all pleadings in which punitive damages are sought allege specific facts which, if proven, would constitute malice, oppression, or fraud supporting a punitive damage request, as those terms are defined by Civil Code section 3294(c). (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) When presented with a motion to strike, a trial court is obligated to strike from a pleading a request for punitive damages if there are insufficient specific facts alleged to meet the statutory definitions of malice, oppression, or fraud. (See Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63-64; Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6; and Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.)
Under Civil Code section 3294(c), “malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (Civ. Code, § 3294, subd. (c)(1).) An allegation of “intent” is an allegation of fact which is sufficiently alleged through use of the term. (See City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803 [“Allegations of the defendant’s knowledge and intent to deceive may use conclusive language.”].) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. (Civ. Code, § 3294, subd. (c)(2).) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civ. Code, § 3294, subd. (c)(3).)
The Legislature added the element of “despicable conduct” to the statutory definitions of malice [related to one of the two alternate means of showing “malice” under Section 3294(c)(1)] and oppression in 1987, for the purpose of providing greater assurance that punitive damages will be awarded only to punish conduct that is truly blameworthy and reprehensible. (Mock v. Michigan Millers Mut. Ins. Co. (1992) 4 Cal.App.4th 306, 331.) It has been defined to mean conduct which is so vile, contemptible, miserable, wretched, or loathsome that it would be looked down on and despised by ordinary decent people. (Id.)
RSC and Price have moved to strike Nicole’s punitive damage allegations, contending that the allegations of Nicole’s complaint do not rise to the level of conduct warranting imposition of punitive damages against them. The only intentional conduct alleged is that the firm was provided inaccurate information about Nicole and her sisters, and failed to disclose the source of the information. In opposition, Nicole notes that punitive damages are available for intentional infliction of emotional distress, and that a cause of action for fraud will support a prayer for punitive damages in and of itself.
The Court will grant the motion, with leave to amend. Nicole’s contentions regarding the cause of action for intentional infliction of emotional distress are inapposite, since no such cause of action is alleged against either RSC or Price. While the Court agrees with Nicole that the allegation of a valid cause of action for fraud will, in itself, support the allegation of a claim for punitive damages, it has found Nicole’s fraud-based causes of action alleged against RSC and Price to be insufficient to constitute valid intentional fraud claims against RSC or Price. Further, apart from those causes of action, none of the conduct alleged to have been committed by either RSC or Sheffield rise to the level of constituting malice, oppression, or fraud, as those terms are defined by Section 3294(c).
3. Non-economic damages in action against an attorney.
RSC and Price have sought to strike from the complaint all of Nicole’s claims for non-economic (emotional distress) damages. The argument they advance is only briefly stated, but they contend that emotional distress damages are not available in actions against attorneys, except when an attorney’s negligence results in a client being wrongly incarcerated, citing Holliday v. Jones (1989) 215 Cal.App.3d 102. They further contend that damages are never recoverable when emotional distress derives from economic loss, citing Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689. Since this case only involves economic loss to Nicole in the form of an alleged reduced inheritance, they conclude all claims for non-economic damages must be stricken.
Nicole opposes the motion, first contending that the cases cited by RSC and Price do not support their claims, in that the court in Holliday awarded the plaintiff emotional distress damages, and the court in Camenisch stated that damages for serious mental suffering may now be recovered without physical injury or impact and depend on whether a defendant owes a duty of care. She further contends that her causes of action for Dependent Adult Emotional Abuse and Elder Emotional Abuse entitled her to non-economic damages regardless of whether the defendant is an attorney. Finally, she contends that an allegation of intentional affirmative misconduct by an attorney or noneconomic injury resulting form an attorney’s professional negligence, recovery of emotional distress damages is permitted, citing Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1040.
The court in Holliday affirmed an award of emotional distress damages to a client who was wrongfully imprisoned as a result of the attorney’s negligence, based upon the loss of his fundamental right to liberty, noting that his loss of liberty distinguished the case from those in which plaintiffs lost only property interests because of attorney malpractice. It also it reversed an award of emotional distress damages to the children of the wrongfully imprisoned client, on the ground that an attorney’s duty in representing a client in a criminal case does not include responsibility for emotional distress suffered by unrepresented family members. Here, RSC and Sheffield were alleged to have represented the Jordans, not Nicole, and Holliday does not support Nicole’s argument.
In Camenisch, the court did in fact make the statement attributed to it by Nicole. However, it also quoted extensively from Merenda v. Superior Court (1992) 3 Cal.App.4th 1, including the Merenda court’s notations that California courts have barred emotional distress damages when attorney negligence caused loss of property alone, and that where the interest of the client is economic, serious emotional distress is not an inevitable consequence of the loss of money, and the precedents run strongly against recovery. Even where a transaction for legal services was intended to affect the plaintiff, the foreseeability of serious emotional harm and the degree of certainty that the client suffered such injury by loss of an economic claim are tenuous. It noted that the Merenda decision had settled the issue of whether recovery for emotional distress damages is available for emotional distress attributable to legal malpractice. The Camenisch court extended the rule of Merenda¸ which had arisen in a litigation context, to that plaintiff’s economic interest in a tax planning context, finding that the emotional distress damages derive from an inherently economic concern, and were not available to the plaintiff therein.
Smith v. Superior Court, relied on by Nicole, noted that decisions subsequent to Quezada v. Hart (1977) 67 Cal.App.3d 754, had undermined its rule that emotional distress damages were unavailable in the absence of either physical impact and injury to the plaintiff, or intentional wrongdoing by the defendant. It also discussed Merenda, supra, and found that the case at hand was similar to Merenda. While the attorney’s negligence had clearly affected the plaintiff, the allegations of the complaint reflected no basis for concluding it was reasonably foreseeable that their handling of a marital dissolution action, which resulted in the loss of plaintiff’s community property interest in marital assets, would result in emotional injury separate and apart from that which every family law litigant suffers. As in Merenda, the moral blame attached to the attorney’s conduct was only that which attended ordinary negligence. The court concluded that the complaint at issue did not support recovery of damages for emotional distress. It noted that where a plaintiff sufficiently alleged intentional or affirmative misconduct by an attorney, or noneconomic injury resulting from an attorney’s professional negligence, recovery of emotional distress damages is permitted.
Certainly, RSC’s and Price’s brief argument did not capture the essence and/or totality of the law regarding the availability of emotional distress damages in an action based upon the professional negligence of an attorney. However, neither do Nicole’s arguments in opposition provide legal justification for her allegations of, and prayers seeking, non-economic damages in the context of the specific facts alleged in this action. The crux of her claim is that, because of the attorney’s conduct, she lost an expected inheritance—an economic/loss-of-property injury. There were no allegations of any facts or circumstances to show that the loss of her expected inheritance would result in emotional injury separate and apart from that which every probate litigant suffers. While she attempts to assert affirmative wrongdoing by the attorneys in the form of fraudulent conduct, the Court has found that she has not alleged facts sufficient to constitute valid causes of action for fraud, particularly in that the crucial elements of justifiable reliance and causation are absent.
As a result, the Court will grant the motion to strike Nicole’s claims for non-economic (emotional distress) damages, with leave to amend.
III. Demurrer by defendant Green
Nicole’s complaint alleges causes of action against defendant Green for (a) intentional interference with contractual relations (5th cause of action), (b) conspiracy to defraud (10th cause of action), (c) dependent adult emotional abuse and harassment (13th cause of action), (d) elder emotional abuse and harassment (14th cause of action), and (e) intentional infliction of emotional distress (15th cause of action). Each of these causes of action was also alleged against Angela and Jennifer.
Green has demurred to the complaint against her as a whole, based upon claim presentation defects, and to each of the causes of action alleged against her, based upon alleged deficiencies in the allegations.
1. Demurrer based upon claim presentation defects
Nicole’s claim was executed on June 14, 2023, and received by County on June 16, 2023. It contends that the date her cause of action against defendant Green accrued was December 15, 2022, contending that was the date on which APS produced documents to Nicole’s attorney in response to a subpoena.
Her complaint was filed six days after the claim’s receipt by County, on June 22, 2023. While Nicole’s complaint alleges that Green was at all relevant times an employee of the Santa Barbara County Department of Social Services Adult Protective Services [Complaint @ ¶ 6], it does not allege compliance with the Government Tort Claim presentation requirements.
Nicole’s Proof of Service of Summon on defendant Green, filed with the court on July 26, 2023, reflects that she was served with summons and complain by substituted service on July 5, 2023, and that follow-up mailing was accomplished on July 10, 2023.
By letter dated July 31, 2023, County advised that it was returning the claim which Nicole had presented on June 16, 2023, because it was not presented within the time allowed by law, referring to Government Code sections 901 and 911.2. The letter advised that Nicole’s only recourse at that time was to “apply without delay to the County of Santa Barbara for leave to present a late claim.” The letter referred to Government Code sections 911.4 through 912.2, and 946.6, and noted that under some circumstances, leave to present a late claim will be granted.
There is currently no information properly before the Court on this demurrer to show that Nicole or her attorney followed up with an application for leave to present a late claim.
A. Claim presentation requirements.
Under the terms of Government Code section 905, any action for money or damages against a local public entity may not be maintained unless a written claim has first been presented. The required contends of such a claim are articulated in Government Code section 910.
Pursuant to Government Code section 911.2(a) a claim relating to a cause of action for death or for injury to a person or to personal property or growing crops must be presented to the public agency no later than six months after accrual of the cause of action. A claim related to any other cause of action must be presented no later than one year after accrual of the cause of action. (Gov. Code, § 911.2, subd. (a).) The statutory time limits within which a claim must be presented to a public entity are mandatory. (Wood v. Riverside Gen. Hosp. (1994) 25 Cal.App.4th 1113, 1119.)
Under Government Code section 911.3(a), when a claim is subject to the six month time limit for presentation of a claim, and is presented after such time without an application to present a late claim made pursuant to Section 911.4, the agency may, at any time within 45 days after the claim is presented, give written notice to the person presenting the claim that it was not timely filed, and is being returned without further action. The notice shall inform the claimant that his or her only recourse is to apply for leave to present a late claim.
The agency must act on the claim within 45 days after the claim is presented. (Gov. Code, § 912.4, subd. (a).) If the agency fails or refuses to act on a claim within the time prescribed, the claim will be deemed to have been rejected by the board on the last day of the period within which the board was required to act upon the claim. (Gov. Code, § 912.4, subd. (c).)
No suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented, until a written claim therefor has been presented to the public entity and has been acted upon or deemed to have been rejected. (Gov. Code, § 945.4.) This provision is made applicable to claims against public employees by Government Code section 950.6(a), which contains similar provisions.
Any plaintiff filing a complaint against a public entity (or public employee) must allege facts demonstrating or excusing compliance with the claim presentation requirement. If they do not, their complaint is subject to a general demurrer for failure to state facts sufficient to constitute a cause of action. (Malear v. State of California (2023) 89 Cal.App.5th 213, 220, quoting State of California v. Superior Court (Boddle) (2004) 32 Cal.4th 1234, 1243.)
B. Application
Green’s demurrer attacks Jordan’s claim presentation in multiple respects. She contends that Nicole improperly filed her complaint before her claim had been acted on by County, and that because the claim which was presented was untimely, Nicole was required to proceed through the administrative process for presenting a late claim before she could file a complaint.
Nicole responds by claiming that she did not sue APS when she filed her original complaint, for the very reason that her claim had not been acted upon, and she was unaware of the requirement that she make a claim before she could sue Green (the complaint’s allegations acknowledged that she is a public employee). Nicole further asserts that she did not suffer any personal injury, and the date of accrual of her claim cannot clearly be identified.
Nicole’s acknowledgement that she was unaware of the legal requirement that she present a claim before she could sue Green, and that she did not sue APS in the original complaint because she was waiting for her claim to be acted on, sheds light on her complaint’s complete failure to contain any allegations with respect to compliance with the claim presentation requirement. Regardless of the reason for doing so, her failure to allege facts demonstrating or excusing compliance with the claim presentation requirement has rendered her entire complaint against Green to be defective, and it thereby fails to state facts sufficient to state any cause of action against Green. (See Malear v. State of California, supra.)
Further, in failing to address the claims presentation requirement at all, the allegations of the complaint fail to make any attempt to plead around the defects raised by Green, such as by attempting to allege facts to show that Nicole was excused from compliance with the claims presentation requirement for some reason, or by making allegations to establish a basis for her argument that her claim was in fact timely presented. Failing to do so precludes the issue from surviving demurrer and becoming a matter for the court to resolve in the course of the action.
Consequently, the Court will sustain the demurrer to the entire complaint against Green, with leave to amend.
As a result of this ruling, it is unnecessary for the Court to address the remaining bases for the demurrer.
IV. Motion to strike by defendant Green
The Court’s ruling on the demurrer has mooted the motion to strike.
V. Leave to amend.
The Court will grant Nicole leave to amend her complaint, on or before January 8, 2024, or such other date as this Court may specify at the hearing. Some of the defects discussed herein may be curable, and some may not. Further, some of the matters raised by the defendants which were not reached by the Court in this ruling appear to have merit, while some either do not, or do not appear appropriate for determination on demurrer. Regardless, in drafting her First Amended Complaint, Nicole should make her best attempt to address and correct both the defects noted by this Court, and those raised by the parties but not resolved by the Court at this time.