Gordon v. Ervin Cohen & Jessup LLP ( 2023 )

Filed 2/23/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
BRUCE GORDON et al., B313903
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC715251)
v.
ERVIN COHEN & JESSUP
LLP et al.,
Defendants and
Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Patricia Nieto, Judge. Affirmed.
Complex Appellate Litigation Group, Rex S. Heinke,
Jessica Weisel; Joshua R. Furman Law and Joshua R. Furman
for Plaintiffs and Appellants.
Halpern May Ybarra Gelberg, Joseph J. Ybarra, Kevin H.
Scott, Joel Mallord; Ervin Cohen & Jessup and Allan B. Cooper
for Defendants and Respondents.
* * *
A lawyer retained to draft a client’s will or trust has a duty
to “use such skill, prudence, and diligence as members of [the
legal] profession commonly possess and exercise.” (Coscia v.
McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199 (Coscia).) If the
lawyer fails to do so, the client can sue for legal malpractice.
What is more, the lawyer’s duty—and the concomitant right to
sue for legal malpractice—can extend to nonclients, but only if
the client’s intent to benefit the nonclient is “clear,” “certain” and
“undisputed.” (Heyer v. Flaig (1969) 70 Cal.2d 223, 229 (Heyer),
disapproved on other grounds by Laird v. Blacker (1992) 2
Cal.4th 606; Paul v. Patton (2015) 235 Cal.App.4th 1088, 1097,
1098 (Paul).)
But when is the client’s intent clear, certain and
undisputed enough that the lawyer then owes the nonclient a
duty? Here, the client retained an attorney to amend her
testamentary trust in a way that disinherited the three children
of one of her sons upon her death. Soon thereafter, the client
retained the attorney to place three parcels of real estate held by
the trust into three limited liability companies (LLCs) and then
gifted equal membership interests in the LLCs to each of her
three sons. Notably, the LLC operating agreements did not
prohibit the sons from gifting their LLC membership interests to
their children, thereby making it possible for membership
interests in the LLC to be passed to the grandchildren whom the
client had disinherited from her testamentary trust. Thus, this
2
case presents the question: Does a client’s intent to disinherit
someone in a testamentary trust by itself constitute clear, certain
and undisputed intent to disinherit them in every subsequent
transaction the client makes with the property contained in the
trust? We conclude that the answer is no, that the attorney in
this case accordingly owed no duty to guard against that result,
and that the trial court properly granted summary judgment to
the attorney and his law firm sued in this case by certain
beneficiaries of the testamentary trust. We accordingly affirm.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. The Gordon family
Arnold and Claire Gordon married, and had three children
in the 1940s—Jeffrey (born 1941), Bruce (born 1945), and
Kenneth (born 1948).1 Bruce married, and had two sons—Brian
and Steven. Kenneth married, and had three children—Dara,
Michael, and David. Jeffrey married, but had no children.
B. The 1983 Gordon Family Trust
In 1983, Arnold and Claire created The Gordon Family
Trust, dated June 28, 1983 (the “family trust” or the “trust”). The
trust was funded, in part, with several parcels of commercial real
estate as well as stocks and other securities.
As pertinent here, the trust provided that it would be
broken into three subtrusts—called Trust A, Trust B, and Trust
C—upon the death of either Arnold or Claire. Trust A would hold
all of the surviving spouse’s separate property as well as one-half
of the couple’s community property. Because the surviving
1 Because these family members all share the same last
name, we use first names for clarity’s sake. We mean no
disrespect.
3
spouse would be individually entitled to the property in Trust A,
the surviving spouse would have the power to use and devise the
income and principal of Trust A however they wished. Trust B
and Trust C would hold all of the deceased spouse’s separate
property as well as the other half of the couple’s community
property. More specifically, Trust B would be a “bypass trust”
containing stocks and other securities, while Trust C would be a
qualified terminable interest property trust (or QTIP trust)
designed to qualify for the unlimited federal estate tax marital
deduction and contain various parcels of real property. Because
the surviving spouse would not be personally entitled to the
property in Trust B and Trust C, the surviving spouse’s power to
access the property in Trust B and Trust C would be more
limited: The surviving spouse could draw upon the income
generated from the property in those two subtrusts, but could
invade or alienate the principal of those subtrusts only if needed
for their “care, support and maintenance.” Upon the surviving
spouse’s death, any property in Trust A not devised by the
surviving spouse during her lifetime and all properties in Trust B
and Trust C would be divided into shares among Arnold and
Claire’s still-living sons (or, to a lesser degree, a deceased son’s
spouse) and the grandchildren.
C. Further events
1. Arnold’s death
Arnold died on March 25, 1989.
2. Claire’s relationship with her family
Among her three sons, Claire was “closest” with Kenneth.
However, Claire had “strained relationship[s]” with Kenneth’s
wife and his three children.
4
Between 1997 and 2006, Claire went back and forth
disinheriting one or more of Kenneth’s children from the trust,
and toward that end executed a number of amendments to the
trust. In January 2006, Claire executed the twelfth and final
amendment to the trust that disinherited all three of Kenneth’s
children under the trust.
These amendments were all drafted by attorney Reeve
Chudd (Chudd), who was a partner at Ervin Cohen & Jessup LLP
(the law firm).
Because Claire wanted to maintain her close relationship
with Kenneth, she did not tell him about her disinheritance of his
children until 2014 or 2015, and did not tell her son Bruce about
it until 2016.
3. Creation of the LLCs
Soon after Claire executed the final amendment to the
trust in January 2006, Claire’s accountant told Chudd that Claire
was now open to allowing her three sons to receive current
income from three of the commercial real estate properties held
in Trust C, and that doing so would reduce the estate taxes due
upon her death because any subsequent appreciation in the value
of those properties would—by virtue of this new arrangement—
be “out of [the] Estate.”
With Chudd’s assistance, Claire took the following steps.
First, Claire in December 2006 created three LLCs. Into each,
she transferred one of the income-producing commercial
properties in Trust C; consistent with that subtrust’s limitations,
Claire named Trust C as the owner of each LLC. Second, Claire
had Trust C transfer ownership of each LLC to Trust A; in
exchange, Trust A executed promissory notes to Trust C for the
value of the properties. Third, and because the LLCs’ ownership
5
interests were in Trust A over which Claire had more control,
Claire in April 2007 assigned a 30 percent interest in each LLC to
each of her three sons and retained a 10 percent interest in each
LLC for herself.
As pertinent here, the operating agreement for each LLC
drafted by Chudd provides that a member of the LLC can
transfer his “Economic Interest” to anyone, but can only transfer
his “Membership Interest” (which includes the right to vote as
well as the “Economic Interest”) (1) only “with[] the consent of all
of the [other] Members” or (2) without that unanimous consent,
but only if the transfer is to any of the “descendants of the
marriage of [Claire and Arnold]” (either directly or through a
trust).2 Thus, nothing in the LLCs’ operating agreements
2 In full, sections 6.1 and 6.2 of the operating agreements
(which were identical for each LLC) read as follows:
“6.1 Transfer and Assignment of Interests. No
Member shall be entitled to transfer, assign, convey,
sell, encumber or in any way alienate (collectively,
‘transfer’) all or any part of his or her Membership
Interest without the consent of all of the Members,
which consent may be withheld unreasonably. The
term ‘Membership Interest’ means Economic Interest
plus all other rights of a Member under the Act or
this Agreement, including, but not limited to, the
right to vote or participate in the management of the
Company and any right to information concerning
the business and affairs of the Company. The term
‘Economic Interest’ means only the right to receive
distributions of the Company’s assets and allocations
of income, gain, loss, deduction, credit and similar
items from the Company pursuant to this Agreement
and the Act. Notwithstanding the foregoing, without
the consent of the other Members, a Member may
6
prevented Kenneth (or, for that matter, Jeffrey or Bruce) from
transferring their membership interests to Kenneth’s children.
Although Claire never told Chudd that “her intention” “about
inheritance” “had changed” in the time between her execution of
the final amendment to the trust and her creation of the LLCs,
Claire also never told Chudd that she wished to prohibit
Kenneth’s children from obtaining membership interests in the
LLCs. In the more than 10 years between the execution of these
documents and Claire’s death, Claire never told anyone that the
terms of the operating agreements were inconsistent with her
intent.
assign his or her Membership Interest to (a) one or
several of the descendants of the marriage of CLAIRE
GORDON and the late ARNOLD G. GORDON, or (b) a
trust for which such Member serves as one of the
Trustees or as sole Trustee so long as the beneficiary
or beneficiaries of any such trust who shall, upon the
death [of] the original Member, inherit such original
Member’s interest transferred to said trust, shall be
restricted to the descendants of the marriage of
CLAIRE GORDON and the late ARNOLD G. GORDON.”
“6.2 No Effect to Transfers in Violation of
Agreement. Any transfer in violation of this Article
VI shall be null and void at the election of any non-
transferring Member, that such Member may elect in
his, her or its sole and absolute discretion. Any
transferee other than a Transferee permitted by
Section 6.1 (‘the Assignee’) shall be entitled to receive
only the rights of an Economic Interest in the
Company, and shall not have any other rights of a
Membership Interest or be a Member, unless all of
the non-transferring Members agree to admit the
Assignee as a Member.”
7
4. Subsequent, unrestricted gifts to Claire’s
progeny
In 2012, Claire made a gift of $2 million placed in a trust to
her sons Kenneth and Jeffrey—with $1 million allocated to each.
Those trust funds were to be distributed outright, and had no
restrictions on how Kenneth or Jeffrey could use them.
Claire also took out a life insurance policy, paid the
premiums out of her own funds, and designated that the proceeds
would be split between her sons (90 percent) and her
grandchildren (10 percent), without any prohibition on Kenneth’s
children receiving their share of the proceeds.
5. Claire’s death
Claire died on March 9, 2017, at the age of 100. By this
time, the value of the Gordon family assets exceeded $40 million.
II. Procedural Background
A. The pleadings
Bruce and his sons Steven and Brian (collectively,
plaintiffs) sued Chudd and the law firm (collectively, the lawyers)
for legal malpractice on the theory that the lawyers in drafting
the LLC operating agreements did not adhere to Claire’s intent
because they did not prohibit Kenneth’s three children from
inheriting any interests in the LLCs.3 Had the operating
agreements done so, plaintiffs alleged, Kenneth’s interests in the
LLCs would have passed to Jeffrey and Bruce upon Kenneth’s
death, such that Bruce would have a greater membership
3 Plaintiffs also sued for breach of fiduciary duty, but the
trial court granted the lawyers’ motion for judgment on the
pleadings as to that claim and plaintiffs did not avail themselves
of the leave to amend granted by the trial court. The claim is
therefore dead.
8
interest in the LLCs and Bruce’s sons might inherit those shares
if Bruce elected to devise his interests to them.
B. Motion for summary judgment
The lawyers moved for summary judgment on three
grounds—namely, (1) they owed plaintiffs no duty of care, (2)
plaintiffs’ claim was time barred, and (3) Steven and Brian had
too contingent of an interest to have standing to sue. After full
briefing and a hearing, the trial court granted summary
judgment. Specifically, the court ruled that plaintiffs had
presented “no evidence of Claire’s” intent to disinherit Kenneth’s
children from obtaining membership interests in the LLCs, such
that the lawyers owed plaintiffs no duty to effectuate that intent;
the court rejected plaintiffs’ argument that Claire’s intent to
disinherit Kenneth’s children in the “separate testamentary”
trust translated to an intent to preclude their ownership of LLC
interests.
C. Appeal
After judgment was entered, plaintiffs filed this timely
appeal.
DISCUSSION
Plaintiffs argue that there is a triable issue of material fact
as to whether the lawyers owed them a duty to draft the LLC
operating agreements in a way that precluded Kenneth’s children
from obtaining any interest in the LLCs; as a result, plaintiffs
urge, the trial court erred in granting summary judgment for the
lawyers. Summary judgment is appropriate when the moving
party shows that “[it] is entitled to a judgment as a matter of
law.” (Code Civ. Proc., § 437c, subd. (c).) A party is entitled to
judgment as a matter of law when, among other things, the
nonmoving party (here, plaintiffs) cannot establish “[o]ne or more
9
elements of [their] cause of action” (id., subd. (o)(1); see id., subd.
(p)(2)). A “‘“key element”’” of plaintiffs’ sole cause of action for
malpractice is “‘“the establishment of a duty by the [lawyer] to
the claimant.”’” (Moore v. Anderson Zeigler Disharoon Gallagher
& Gray (2003) 109 Cal.App.4th 1287, 1294 (Moore); accord,
Bucquet v. Livingston (1976) 57 Cal.App.3d 914, 921 (Bucquet)
[duty is the “all important element”].) Absent a duty, plaintiffs
cannot establish an element of their malpractice cause of action
and defendants are entitled to summary judgment. Whether a
duty exists is a question of law that we independently assess.
(Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th
26, 57.) We also independently determine whether a trial court’s
grant of summary judgment was appropriate. (Jacks v. City of
Santa Barbara (2017) 3 Cal.5th 248, 273.)
I. The Law of Malpractice
A. A lawyer’s duties, generally
A lawyer has a “duty . . . to use such skill, prudence, and
diligence as members of [the legal] profession commonly possess
and exercise” when representing a client. (Coscia, supra, 25
Cal.4th at p. 1199.) A client may accordingly sue the lawyer for
legal malpractice if the lawyer breaches that duty, that breach
proximately injures the client, and the client suffers actual loss or
damage. (Ibid.; Budd v. Nixen (1971) 6 Cal.3d 195, 200.)
Although the lawyer’s duty typically runs only to the client
because that duty arises from the privity of contract that forms
the lawyer-client relationship (Borissoff v. Taylor & Faust (2004)
33 Cal.4th 523, 529; Berg & Berg Enterprises, LLC v. Sherwood
Partners, Inc. (2004) 131 Cal.App.4th 802, 826), a lawyer can
sometimes owe a duty to third parties who are the intended
beneficiaries of the lawyer’s legal work for the client, such as
10
when the lawyer is retained by the client to draft a will, a
testamentary trust, or an inter vivos trust or gift. (Heyer, supra,70 Cal.2d at p. 228; Lucas v. Hamm (1961) 56 Cal.2d 583, 590-
591 (Lucas); Bucquet, supra, 57 Cal.App.3d at pp. 920-921;
Borissoff, at p. 530.)
The fact that a lawyer creates a will, trust, or gift for the
client that benefits a third party does “not automatic[ally]” give
rise to a duty running from the lawyer to the third party that is
actionable in a malpractice claim. (Bucquet, supra, 57
Cal.App.3d at p. 921; Ventura County Humane Society v.
Holloway (1974) 40 Cal.App.3d 897, 903 (Ventura County
Humane Society); Boranian v. Clark (2004) 123 Cal.App.4th
1012, 1017 (Boranian); Moore, supra, 109 Cal.App.4th at p. 1295.)
Because malpractice is a common law tort, and because “duty” in
the context of such torts reflects a conclusion made by the
courts—based on considerations of public policy—that one person
should be liable to another (Dillon v. Legg (1968) 68 Cal.2d 728,
734; Brown v. USA Taekwondo (2021) 11 Cal.5th 204, 221;
Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 946, 954-955
(Radovich)), the question of whether a lawyer has a duty to a
nonclient third party is similarly based on an amalgam of
competing public policy considerations.
Fortunately, our Supreme Court has already articulated
eight factors bearing on whether a lawyer should owe a duty to a
nonclient, and those factors fall into three groups. The first
group of factors looks to “the extent to which the transaction
[between the lawyer and the client] was intended to affect the
[nonclient] plaintiff” (the first factor). (Lucas, supra, 56 Cal.2d at
p. 588.) The clearer it is that the client intended to affect (that is,
to benefit) the nonclient plaintiff, the more “foreseeabl[e]” the
11
harm due to any malpractice is to the nonclient plaintiff (the
second factor), the greater the “degree of certainty that the
[nonclient plaintiff] suffered injury” (the third factor), the greater
the “closeness of the connection between [the lawyer’s] conduct
and the [nonclient] plaintiff’s injury” (the fourth factor), and the
more that recognizing a duty furthers “the policy of preventing
future harm” (the sixth factor).4 (Ibid.; see also Ventura County
Humane Society, supra, 40 Cal.App.3d at pp. 906-907 [noting how
the second through fourth as well as sixth factors largely turn on
the first factor]; Radovich, supra, 35 Cal.App.4th at p. 964
[same]; Paul, supra, 235 Cal.App.4th at p. 1098 [same].) As
vividly illustrated by the number of factors related to the client’s
intent to benefit the nonclient plaintiff, the clarity of the client’s
intent is accordingly “central to the duty analysis.” (Paul, at p.
1097.) The second group of factors examines the “likelihood that
impos[ing] liability [on the lawyer to the nonclient plaintiff]
might interfere with the [lawyer’s] ethical duties to the client”
(the seventh factor). (Boranian, supra, 123 Cal.App.4th at p.
1017; accord, Goodman v. Kennedy (1976) 18 Cal.3d 335, 344
(Goodman).) A lawyer’s “paramount” and “primary” duty is to
the client and, more immediately, to carrying out the client’s
intent (Ventura County Human Society, at pp. 904-905; Boranian,
at pp. 1014, 1019), so courts are less willing to impose a duty
running from the client to a nonclient plaintiff if recognizing that
4 Another factor courts consider in determining whether a
duty exists is the “moral blame attached to the [lawyer’s]
conduct” (the fifth factor). (Biakanja v. Irving (1958) 49 Cal.2d
647, 650.) However, this factor is “rarely appl[ied] as part of
the[]” analysis of duty when it comes to claims of legal
malpractice. (Osornio v. Weingarten (2004) 124 Cal.App.4th 304,
321, fn. 15 (Osornio).)
12
additional duty might interfere with the lawyer’s chief duty to
the client (Boranian, at p. 1018; Moore, supra, 109 Cal.App.4th at
p. 1299). The third group of factors assesses whether the
recognition of a duty running to the nonclient plaintiff—and the
resultant “recognition of liability” against the lawyer—“would
impose an undue burden on the profession” (the eighth factor)
(Lucas, at p. 589), either by (a) making the lawyer “subject to
conflicting duties to different sets of [nonclient] beneficiaries”
(Moore, at p. 1299; Boranian, at p. 1020), or (b) saddling the
lawyer with open-ended liability that could act as a disincentive
for lawyers to practice in that area of law and hence dry up
access to the legal services in that area (Ventura County Humane
Society, at p. 905).
B. A lawyer’s duty to a nonclient, specifically
After balancing the factors articulated above, the California
courts have uniformly settled upon the following rule: A lawyer
has a duty to a nonclient third party only if the client’s intent to
benefit that third party (in the way the third party asserts in
their malpractice claim) is “clear,” “certain” and “undisputed.”
(Heyer, supra, 70 Cal.2d at p. 229 [“certain”]; Paul, supra, 235
Cal.App.4th at pp. 1097, 1098 [“clear”; “undisputed”]; Radovich,
supra, 35 Cal.App.4th at pp. 958-959 [“certain”]; Moore, supra,
109 Cal.App.4th at p. 1299 [“certain”].) In other words, courts
will recognize a duty to a nonclient plaintiff—and thereby allow
that plaintiff to sue the lawyer for legal malpractice—only when
the plaintiff, as a threshold matter, establishes that the client, in
a clear, certain and undisputed manner, told the lawyer, “Do X”
(where X benefits the plaintiff).
13
There are a few reasons why the courts have consistently
insisted upon this heightened showing when it comes to the
clarity of the client’s intent.
First, it is only when the client’s intent to benefit the
nonclient third party is abundantly clear that the courts can be
sure that the third party’s malpractice claim is enforcing the
client’s wishes, which is the ‘“main purpose”’ of a malpractice
lawsuit—no matter who is prosecuting it. (Paul, supra, 235
Cal.App.4th at p. 1098; accord, Garcia v. Borelli (1982) 129
Cal.App.3d 24, 32 (Garcia); Ventura County Humane Society,
supra, 40 Cal.App.3d at p. 903.)
Second, the pertinent factors support the recognition of a
duty running to the nonclient plaintiff only when the client’s
intent to benefit that nonclient is clear, certain and undisputed.
When the client’s intent meets this heightened standard, there is
no doubt that the transaction between the lawyer and the client
was intended to affect the nonclient plaintiff, which means that
the injury to the plaintiff from the lawyer’s negligence in carrying
out that intent is foreseeable, the injury to the plaintiff is more
certain, the connection between the lawyer’s conduct and the
plaintiff’s injury is closer, and it is more likely that allowing the
malpractice claim to move forward would prevent future harm.
When the client’s intent meets this heightened standard, it is
more likely that the nonclient plaintiff’s interests in prosecuting
a malpractice claim perfectly represent the client’s interests,
thereby reducing the likelihood that a duty running from the
lawyer to the nonclient plaintiff would put the lawyer in an
ethical quandary. (Paul, supra, 235 Cal.App.4th at p. 1100 [if
“there is no dispute regarding the decedent’s intent, the
imposition of liability will not compromise the [lawyer’s] duty of
14
undivided loyalty to the testator”].) And when the client’s intent
meets this heightened standard, there is less danger that the
lawyer will be subject to conflicting duties to different nonclient
beneficiaries because only those beneficiaries as to whom the
client’s intent is crystal clear may sue for malpractice. This
heightened standard also reduces the danger of open-ended
liability for lawyers because it can be decided as a matter of law,
either on demurrer or summary judgment (because a nonclient
plaintiff would be unable to raise a factual dispute about the
client’s intent absent evidence that the client had a clear, certain
and undisputed intent to benefit the plaintiff). (Chang v.
Lederman (2009) 172 Cal.App.4th 67, 83 (Chang) [so noting].)
California courts have routinely insisted that nonclient
plaintiffs bringing malpractice claims adduce clear, certain and
undisputed evidence of the client’s intent to benefit them in the
way they are seeking to vindicate. In Heyer, supra, 70 Cal.2d
223, the client tasked her lawyer with drafting a will that left her
estate only to the client’s two daughters and told the lawyer she
was about to get married. Heyer held that the daughters could
sue the lawyer for malpractice when the lawyer failed to account
for how the client’s marriage would disrupt her clearly
articulated intent to pass her estate to only her daughters. (Id.
at pp. 225-229.) In Bucquet, supra, 57 Cal.App.3d 914, the client
tasked the lawyer with drafting an inter vivos trust in a manner
that would reduce estate taxes. Bucquet held that the trust’s
beneficiaries could sue when the lawyer’s use of a general power
of appointment (rather than a more tax-savvy mechanism)
disrupted the client’s clearly articulated intent to reduce those
taxes. (Id. at pp. 918-919.) In Garcia, supra, 129 Cal.App.3d 24,
the client tasked the lawyer with ensuring that some of the
15
property that was delineated in his will remained his separate
property and would be passed to his son. Garcia held that the
son could sue the lawyer when the lawyer’s careless drafting
disrupted the client’s clearly articulated intent to ensure that the
property was designated as separate property. (Id. at pp. 29, 32.)
In Osornio, supra, 124 Cal.App.4th 304, the client tasked her
lawyer with drafting a will that would leave all of her property to
the woman who served as the client’s care custodian. Osornio
held that the care custodian could sue the lawyer when the
lawyer’s failure to obtain a “certificate of independent review”
necessary to permit an otherwise disqualified care custodian to
inherit disrupted the client’s clearly articulated intent to benefit
the care custodian. (Id. at pp. 329, 334.) And in Paul, supra, 235
Cal.App.4th 1088, the client tasked his lawyer with drafting an
amendment to his testamentary trust that gave several items of
property to his children and not his wife. Paul held that the
children could sue the lawyer when the lawyer’s amendment
allowing the wife also to inherit that property disrupted the
client’s undisputed intent that his children (and children alone)
inherit. (Id. at pp. 1091, 1093, 1097.)
C. The limits of a lawyer’s duty to a nonclient
The carefully delineated rule that a nonclient plaintiff may
sue a lawyer for malpractice only when the client’s intent to “Do
X” (that is, to do something to benefit that plaintiff) is clear,
certain and undisputed means that there are several scenarios in
which the lawyer owes no duty to that nonclient plaintiff. Two of
those scenarios are relevant here.
First and most obviously, a lawyer owes no duty to a
nonclient plaintiff to effectuate the client’s directive to “Do X”
when the nonclient’s claim raises a question about what “X” is—
16
that is, where there is a question about whether the client
intended to benefit the plaintiff or how the client intended to do
so. (Chang, supra, 179 Cal.App.4th at p. 82 [no liability to a third
party “where there is a question about whether the third party
beneficiary was, in fact, the decedent’s intended beneficiary”];
Boranian, supra, 123 Cal.App.4th at p. 1018 [no liability to a
third party “where there is a substantial question about whether
the third party was in fact the decedent’s intended beneficiary”].)
Because uncertainty regarding the client’s intent
necessarily means that the client’s intent is not clear, certain or
undisputed, the absence of a duty in this scenario is
unsurprisingly dictated by the analysis of the factors bearing on
whether to recognize a duty. When the client’s intent behind the
directive to “Do X” is anything less than abundantly clear, there
is by definition greater doubt about whether the transaction
between the lawyer and the client was intended to benefit the
nonclient plaintiff. As a consequence, the plaintiff’s injury is a
less foreseeable result of the lawyer’s conduct, the plaintiff’s
injury is less certain, the connection between the lawyer’s
conduct and the plaintiff’s injury is less close, and it is less likely
that allowing the malpractice claim to move forward would
prevent future harm. (Paul, supra, 235 Cal.App.4th at p. 1098
[so noting].) When the client’s intent is anything less than
abundantly clear, it is more likely that the client’s interests will
end up conflicting with the nonclient plaintiff’s interests, thereby
placing the lawyer in an “untenable position of divided loyalty.”
(Boranian, supra, 123 Cal.App.4th at p. 1014.) What is more,
courts will inevitably encounter “difficulties of proof” in resolving
this conflict because the one person who can most authoritatively
speak to the client’s intent—namely, the client—will in all cases
17
involving testamentary interests be dead. (Moore, supra, 109
Cal.App.4th at p. 1297; Radovich, supra, 35 Cal.App.4th at p.
964.) And when the client’s intent is anything less than
abundantly clear, there is a greater danger of conflicting duties
between competing beneficiaries as well as a greater likelihood
that the lawyer will be hit with a flood of malpractice claims
brought by nonclient plaintiffs asserting that the client “once
promised them X” and the like; this potential liability would
place an “intolerable” “burden” on the legal profession. (Chang,
supra, 172 Cal.App.4th at p. 84.)
California courts have unfailingly rejected the existence of
a duty where there is a question about “X.” In Ventura County
Humane Society, supra, 40 Cal.App.3d 897, the client directed the
lawyer to designate that a charity with a specific name inherit
part of her estate. When it later came to light that no charity
bore that specific name provided by the client, a charity with a
similar name sued the lawyer for malpractice. The court
dismissed the claim, reasoning that the client’s intent to benefit
the plaintiff was “ambiguous,” such that the plaintiff could not
bring suit. (Id. at 902-905.) And in Chang, supra, 172
Cal.App.4th 67, the client executed a trust that named the
nonclient plaintiff, but the plaintiff sued the lawyer for
malpractice claiming that the client had intended to revise that
trust to increase the plaintiff’s share of the estate. The court
dismissed the claim, reasoning that the client’s intent to revise
the bequest did not appear anywhere in the trust, that the
plaintiff’s assertion about the client’s intent at best presented a
“question” about the client’s intent, and that simply raising a
“question” about the client’s intent did not meet the standard
that the client’s intent was abundantly clear. (Id. at pp. 82-84.)
18
Second, a lawyer has no duty to a nonclient plaintiff beyond
implementing the client’s clear directive to “Do X” (when, as
noted above, X benefits that nonclient plaintiff). The lawyer has
no duty to remind the client to follow through with implementing
the client’s directive once the lawyer has prepared the requested
documents (Radovich, supra, 35 Cal.App.4th at pp. 954, 965 [no
duty for failing to remind the client to execute a new will that the
client had asked the lawyer to draft]), no duty to “urge the [client]
to consider . . . alternative plan[s]” to forestall will contests by
persons who would lose out once the client’s intent was
effectuated (Boranian, supra, 123 Cal.App.4th at pp. 1019-1020),
no duty to effectuate an expression of intent from the client that
falls short of a directive (Hall v. Kalfayan (2010) 190 Cal.App.4th
927, 929, 935-938 [no duty for failing to follow up with a client to
see if the client wanted the lawyer to draft a new will when the
client never asked the lawyer to do so, but had casually expressed
a desire to change the then-existing disposition of her estate], and
no duty to evaluate whether the client has the mental capacity to
make a directive that disinherits the nonclient plaintiff (Moore,
supra, 109 Cal.App.4th at p. 1290). In other words, a lawyer’s
duty to a nonclient does not extend to being a babysitter, a risk
mitigation strategist, a sounding board, or a mental health
specialist for the client. Making a lawyer liable in malpractice to
a nonclient for failing to act in any role beyond the role of
implementing the client’s undisputed intent to benefit that
nonclient is bad public policy because it places an “incentive [on
the lawyer] to exert pressure on the client to complete and
execute estate planning documents summarily” (Radovich, at p.
965), a result that contravenes the lawyer’s overarching duty of
loyalty to the client.
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II. Analysis
Applying the principles articulated above, we conclude that
the lawyers did not owe plaintiffs a duty to draft the LLC
operating agreements in a way that disinherited Kenneth’s
children because Claire’s intent to disinherit Kenneth’s children
from being assigned any interest in the LLCs was not, as a
matter of law, clear, certain or undisputed. We reach this
conclusion for two reasons.
First, this is the conclusion mandated by the governing
legal rule because the undisputed facts in this case present the
scenario where there is uncertainty about the intent of Claire
that plaintiffs are trying to effectuate in their malpractice claim.
Claire’s intent to disinherit Kenneth’s children from holding any
interests in the LLCs appears nowhere in the LLC operating
agreements themselves (Chang, supra, 172 Cal.App.4th at p. 82
[intent is clear where nonclient plaintiff “was an expressly named
beneficiary of an express bequest”]) and was never conceded by
the lawyers (Paul, supra, 235 Cal.App.4th at p. 1100 [intent is
clear where lawyer admits to what client’s intent was]). To the
contrary, it is undisputed that Claire never told Chudd of a desire
to prevent Kenneth from passing his interest in the LLCs to his
children, as well as undisputed that Claire—in the 10-plus years
between executing the LLC operating agreements and her
death—never expressed any discontent with the terms of the LLC
operating agreements.
Plaintiffs’ chief response is that Claire does have a clearly
articulated intent to prohibit Kenneth’s children from receiving
any interest in the LLCs. Plaintiffs’ position boils down to the
following syllogism: The LLCs and the testamentary trust are
part of Claire’s “integrated estate plan”; Claire expressed a clear
20
intent to disinherit Kenneth’s children from her testamentary
trust when she amended it in 2006; therefore, Claire had the
same clear intent to disinherit Kenneth’s children from taking
any interest in the LLCs.
We reject plaintiffs’ argument for several reasons.
To begin, the net effect of the syllogism is to require a court
to infer that the intent that a person has when fixing the
distribution of their property at the time of their death is the
intent they have when distributing any of that property through
inter vivos transfers prior to their death. But this inference is
not a reasonable one. Under plaintiff’s syllogism, all it takes for
an inter vivos transfer of property to be part of an “integrated
estate plan” is that the property be subject to distribution under
a will or testamentary trust and that the inter vivos transfer
made after the will or trust is created be capable of reducing the
amount of estate taxes due. Yet these attributes are true of every
inter vivos transfer: Property not transferred away through an
inter vivos transfer necessarily remains part of a person’s estate
and hence is always subject to distribution under the person’s
will or testamentary trust, and an inter vivos transfer of property
will necessarily remove the property from the estate and hence
always reduce estate taxes. Given the sheer breadth of inter
vivos transfers that would be considered part of a person’s
“integrated estate plan,” plaintiffs’ proffered inference of intent is
not reasonable because people regularly transfer their property to
different recipients at different points in their lives. That is
precisely what Claire did here. She clearly did not want
Kenneth’s children to inherit any of the property left in her estate
at the time of her death, but evinced no qualms whatsoever about
those children getting some of the $1 million she gave to Kenneth
21
in 2012 or sharing in the life insurance proceeds that would be
paid out when she died. Put differently, Claire quite reasonably
had multiple different intents regarding Kenneth’s children;
consequently, her failure to tell Chudd that “her intention”
“about inheritance” had changed between the final amendment to
the trust and creating the LLCs was fully consistent with
allowing Kenneth’s children to receive interests in the LLCs.
More to the point, and contrary to what plaintiffs repeatedly
insist in their briefs, plaintiff’s proffered inference is nowhere
near compelling enough, by itself, to meet the high threshold
necessary to create a duty that can support a malpractice claim
by a nonclient plaintiff. That is because a person’s intent
regarding how to distribute their property when they die—even if
it might allow a court to infer some evidence of their intent
behind inter vivos transfers of their property—does not constitute
evidence of a clear, certain and undisputed intent with regard to
those inter vivos transfers.
Further, an analysis of the various factors bearing on
whether to recognize a duty supports our rejection of plaintiffs’
“integrated estate plan” argument. Because a person’s intent
regarding the disposition of their property at the time of their
death is fairly weak evidence of their intent with regard to inter
vivos transfers, there is greater doubt that the client intended to
benefit a nonclient plaintiff with a particular inter vivos transfer
merely because the client intended to benefit that plaintiff in
their testamentary disposition. This greater doubt means that
the plaintiff’s injury is a less foreseeable result of the lawyer’s
conduct in effectuating the inter vivos transfer, that the
plaintiff’s injury is less certain, that the connection between the
lawyer’s conduct and the plaintiff’s injury is less close, and that it
22
is less likely that allowing the malpractice claim to move forward
would prevent future harm. This greater doubt also means that
it is more likely that the client’s interests will end up conflicting
with the nonclient plaintiff’s interests. And because the client’s
intent regarding the inter vivos transfer is murky when drawn
solely from the client’s testamentary intent, allowing a
malpractice claim to exist whenever a client’s inter vivos transfer
deviates from the client’s testamentary disposition of property
would place an intolerable burden upon the legal profession by
subjecting lawyers to malpractice claims by beneficiaries named
in the will whenever a client takes the commonplace action of
choosing to benefit different people with their inter vivos
transfers than the people who will inherit from them at the time
of death. Even if we confine our analysis of burden to the burden
in a given case, and even though the universe of possible third-
party malpractice plaintiffs would be limited to persons named in
the will, such beneficiaries will be able to sue whenever any inter
vivos transfer is made after a testamentary instrument is
created; this would add up to quite a burden.
Second, we conclude that the lawyers did not owe plaintiffs
a duty to draft the LLC operating agreements in a way that
disinherited Kenneth’s children from obtaining any interest in
the LLCs because such a duty would obligate the lawyers to act
as a sounding board and babysitter, effectively requiring them to
“second guess” Claire’s otherwise clear directive. If, as plaintiffs
urge, a client’s intent regarding who should inherit their property
at the time of death creates an inference of the same intent for
any and all inter vivos transfers, then the client’s previously
expressed testamentary intent would forever after operate as a
sort of “super-intent” that would seemingly be controlling unless
23
and until the client affirmatively expressed a contrary intent. So
in a case, such as this one, where the client says “Do Y” in
effectuating an inter vivos transfer, a lawyer who knows that the
client’s will or testamentary trust says, “Do X” would be obligated
to ask the client: “I know you said you wanted to ‘Do Y’ for this
inter vivos transfer, but you previously said in your will or
testamentary trust that you wanted to ‘Do X,’ so which is it—X or
Y?” This calls upon the lawyer to second guess the client. What
is more, it puts the lawyer in the middle of a potential conflict
between the people who are the beneficiaries of X and the people
who are the beneficiaries of Y.
Plaintiffs resist our analysis with what can be grouped into
four further arguments.
First, plaintiffs urge that their syllogism is valid because a
person’s “integrated estate plan” always includes both their will
and testamentary trusts and inter vivos transfers of property
covered by that will or trust, such that a client is rightly
presumed to have the same intent as to all aspects of their estate
plan. For support, plaintiffs cite Genger v. Delsol (1997) 56
Cal.App.4th 1410 and Burch v. George (1994) 7 Cal.4th 246.
Genger and Burch held that a beneficiary’s assertion of an
interest in property that is in the decedent’s estate at the time of
the decedent’s death triggered the “no contest” clauses contained
in each decedent’s will or testamentary trust. (Genger, at pp.
1420-1422; Burch, at pp. 251-263.) These cases do not aid
plaintiffs. To start, Genger and Burch are inapt. They deal with
the scope of express “no contest” clauses in wills and
testamentary trusts, and do no more than give effect to the
“uncontroverted” intent of the testator as reflected in those
express clauses. (Burch, at pp. 254-255, 258.) Here, by contrast,
24
plaintiffs are asking us to import a testator’s intent from a
testamentary trust into an inter vivos transfer document that, on
its face, contradicts that testamentary intent. What is more, the
challenges that triggered the no contest clauses in Genger and
Burch concerned properties that were still part of the estates at
the time of the testators’ deaths (and thus subject to the “no
contest” clauses in the wills or testamentary trusts); indeed, the
property challenged in Genger was the very “cornerstone” of the
decedent’s “integrated estate plan”—a plan that would have
“unravel[ed]” if left open to challenge. (Genger, at pp. 1421-1422.)
Here, by contrast, the property at issue has been removed from
the Gordon family’s estate by the inter vivos transfers at issue in
this case. Thus, neither Genger nor Burch supports plaintiffs’
broad assertion that everything a person does with the property
they own after they make a will or testamentary trust is part of
their “integrated estate plan.”
Second, plaintiffs attempt to qualify their syllogism—and
thereby narrow the reach of the inference of intent that it
mandates—by arguing that an inter vivos transfer is part of a
person’s “integrated estate plan” (and hence subject to their
proffered inference of intent) only where, as here, the inter vivos
transfer has a “temporal proximity” to the person’s earlier
execution of their will or testamentary trust and where the inter
vivos transfer is not “random.” But how proximate in time must
an inter vivos transfer be to be “temporally proximate”? And
when is an inter vivos transfer “random” versus not random
given that all transfers are necessarily intentional? These
proffered “limits” on the scope of plaintiffs’ inference of intent are
malleable, flimsy and manipulable. They would make a lawyer’s
malpractice liability to nonclient plaintiffs turn on questions that
25
would inevitably be subject to factual dispute and thus could not
be resolved prior to trial; it would therefore place the same
intolerable burden on lawyers as plaintiffs’ unlimited syllogism.
Third, plaintiffs express their disagreement with several
aspects of the trial court’s reasoning in granting summary
judgment—namely, that the trial court erred in (1) insisting that
Claire’s intent be derived from the LLC operating agreements,
because that insistence somehow wrongly conflates the element
of duty with the element of breach of duty, and (2) focusing on the
intent “element.” These disagreements are both irrelevant and
incorrect. They are irrelevant because our task in independently
evaluating the summary judgment ruling means that we are
reviewing the court’s ruling and not its reasoning. (Minish v.
Hanuman Fellowship (2013) 214 Cal.App.4th 437, 455.)
Plaintiffs’ disagreements are also incorrect. The trial court’s
insistence upon clear, certain and undisputed evidence of Claire’s
intent properly focuses on the very question of duty; the court
was not examining the breach of duty element. Plaintiffs
disagree, insisting that the clarity of the testator’s intent is
relevant to the breach element rather than the duty element.
Plaintiffs are wrong: The cases we cite above all deal with the
duty element, which is why they discuss the public policy factors
that define duty (rather than the case-specific inquiry attendant
to whether a lawyer’s conduct in any given case breaches that
duty). To the extent plaintiffs are arguing that the court erred in
looking at the LLC operating agreements in a vacuum because
Claire’s intent to disinherit Kenneth’s children would have been
expressed in those operating agreements but for the lawyers’
malpractice, it is plaintiffs who are conflating duty and breach.
And plaintiffs’ argument that only the intent “element” was at
26
issue rests on a misapprehension of the law: The only “element”
at issue is duty; intent is but one of many factors bearing on
whether to recognize such a duty.
Lastly, plaintiffs insist that any deficiencies in their case
are cured by the declaration submitted by their expert witness,
which they point out was never contradicted by a competing
expert declaration from the lawyers. Plaintiffs are wrong.
Plaintiffs’ expert opined that (1) the LLCs “were a part of Claire’s
. . . integrated estate plan” and that her intent regarding the
LLCs “must” therefore “be viewed in concert with the trust
agreement,” and (2) the lawyers “breached the applicable
standard[] of care.” The first opinion effectively opines that the
lawyers owe plaintiffs a duty. We have concluded otherwise, and
“it is well settled that ‘expert testimony is incompetent on the . . .
question whether [a legal] duty [of care] exists because this is
question of law for the court alone’ to decide.” (QDOS, Inc. v.
Signature Financial, LLC (2017) 17 Cal.App.5th 990, 1004.) The
second opinion that the lawyers breached the standard of care
similarly suggests that they owed plaintiffs a duty in the first
place. But that suggestion is wrong because it assumes its
conclusion. (Issakhani v. Shadow Glen Homeowners Assn., Inc.
(2021) 63 Cal.App.5th 917, 935 [“The standard of care is relevant
only if there is a duty of care for it to impose. The standard of
care presupposes a duty; it cannot create one.”].)
* * *
Because summary judgment was properly granted due to
the absence of any duty running from the lawyers to plaintiffs,
we have no occasion to reach the alternative grounds for
affirmance (namely, that plaintiffs’ claims are time barred or that
Brian and Steven lack standing).
27
DISPOSITION
The judgment is affirmed. The lawyers are entitled to their
costs on appeal.
CERTIFIED FOR PUBLICATION.
______________________, J.
HOFFSTADT
We concur:
_________________________, P. J.
LUI
_________________________, J.
ASHMANN-GERST
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