Opinion
H043213
01-24-2020
BAYVIEW HEIGHT, INC., Plaintiff and Appellant, v. RICHARD K. ABDALAH, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. CV268114)
Appellant Bayview Height, Inc. (Bayview) filed an action for legal malpractice, breach of fiduciary duty, and unjust enrichment against respondents Richard A. Abdalah and Abdalah Law Offices (collectively Abdalah). The superior court granted Abdalah's summary judgment motion and dismissed Bayview's action on the ground that Abdalah owed Bayview no duty because Abdalah had never consented to represent Bayview in the underlying lawsuit. Bayview contends on appeal that the superior court erred because it raised triable issues of fact as to whether there was an implied-in-fact attorney-client relationship between it and Abdalah or, alternatively, as to whether Bayview was the third party beneficiary of Abdalah's attorney-client relationship with Bayview's representative. We conclude that Bayview raised a triable issue of fact as to whether there was an implied-in-fact attorney-client relationship between it and Abdalah. Consequently, the superior court erred in granting Abdalah's motion, and the judgment must be reversed.
I. Standard of Review
"Appellate review of a ruling on a summary judgment or summary adjudication motion is de novo." (Brassinga v. City of Mountain View (1998) 66 Cal.App.4th 195, 210.) "[T]he party moving for summary judgment bears the burden of persuasion that there are no triable issues of material fact and that the moving party is entitled to judgment as a matter of law." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) The moving party also "bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact." (Ibid.) "A prima facie showing is one that is sufficient to support the position of the party in question." (Aguilar, at p. 851.)
II. Duty Element of Professional Negligence
"A key element of any action for professional malpractice is the establishment of a duty by the professional to the claimant." (Goldberg v. Frye (1990) 217 Cal.App.3d 1258, 1267.) "No formal contract or arrangement or attorney fee is necessary to create the relationship of attorney and client. It is the fact of the relationship which is important." (Farnham v. State Bar (1976) 17 Cal.3d 605, 612.) An attorney-client relationship may be implied rather than express. "Although the relationship usually arises from an express contract between the attorney and the client, it may also arise by implication. [Citations.] ' "Neither contractual formality nor compensation nor expectation of compensation is required." ' [Citations.] [¶] The relationship may arise without any direct dealings between the client and the attorney." (Streit v. Covington & Crowe (2000) 82 Cal.App.4th 441, 444-445, italics added.) "It is the intent and conduct of the parties which is critical to the formation of the attorney-client relationship." (Hecht v. Superior Court (1987) 192 Cal.App.3d 560, 565.)
"The question of whether an attorney-client relationship exists is one of law. [Citations.] However, when the evidence is conflicting, the factual basis for the determination must be determined before the legal question is addressed." (Responsible Citizens v. Superior Court (1993) 16 Cal.App.4th 1717, 1733.) "Where a triable issue of fact exists, it is the function of the jury to determine the facts." (Alcaraz v. Vece (1997) 14 Cal.4th 1149, 1162, fn. 4.) Where there are triable issues of fact on the question of whether an attorney-client relationship existed, summary adjudication is precluded. (Johnson v. Superior Court (1995) 38 Cal.App.4th 463, 477-479.)
An attorney also may be held liable under certain circumstances to a third party with whom the attorney did not have an attorney-client relationship. "[W]hether in a specific case the attorney should be held responsible to a third person not in privity constitutes a policy matter and involves balancing factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct, and the policy of preventing future harm [citations]." (Ventura County Humane Society v. Holloway (1974) 40 Cal.App.3d 897, 903.)
III. Abdalah's Evidence in Support of His Motion
Abdalah produced evidence that he was engaged by Y.T. Wong in 2006 to prepare an easement for the benefit of property in the County of Alameda (the County) that Bayview was purchasing. Wong had some interest in Bayview. During Abdalah's representation of Wong in 2006, Abdalah's written communications were with "Y.T. Wong [¶] Bayview Height." There was no written fee agreement. Abdalah prepared the easement.
Abdalah did not hear from Wong again until 2008, when Wong contacted Abdalah concerning a July 2008 petition for writ of mandate filed by the Tomlinsons (the Tomlinson action), which named Wong, SMI Construction, Inc. (SMI), and "Does 21 through 30" as real parties in interest. The Tomlinson action challenged the County's approval of "the Bayview Heights project" on the property for which Abdalah had prepared the easement. Bayview was the owner and developer of the project. Wong and SMI were listed as the applicants on a development application filed with the County for the project that Bayview planned to develop on its property. Can H. Ly, who has an ownership interest in Bayview, owns SMI, which is a construction services company.
In August 2008, an "Attorney-Client Fee Contract" was prepared at Abdalah's direction. This fee agreement identified the " 'Clients' " as "Y.T. Wong and SMI Construction, Inc." This agreement stated that Abdalah agreed to represent Wong and SMI in the Tomlinson action. Abdalah represented Wong and SMI in the Tomlinson action until 2013.
Abdalah declared that he had never "consented to represent Bayview" in connection with either the 2006 easement matter or the Tomlinson action. He declared that he had represented only Wong in the 2006 matter and only Wong and SMI in the Tomlinson action.
IV. Bayview's Evidence Opposing Abdalah's Motion
Wong declared that he was "the principal contact person for all matters related to interactions between [Bayview] and [Abdalah]." In 2006, Wong contacted Abdalah to seek his services in preparing an easement agreement pertaining to Bayview's project. Wong declared that he "was very clear" with Abdalah that "I was consulting" him "on behalf of Bayview." In a 2006 e-mail to Abdalah, Wong referred to "us ('Bayview Height')" as the entity that required the easement that Abdalah was being hired to prepare. Wong told Abdalah that the easement agreement needed to be signed by Ly on behalf of Bayview. The easement agreement prepared by Abdalah was between Bayview and a third party. It referred exclusively to Bayview and contained no references to Wong. The easement agreement prepared by Abdalah was drafted to be signed by "CAN H. LY" as "President [¶] BAYVIEW HEIGHT, a California corporation."
In 2008, Wong contacted Abdalah on Bayview's behalf to see if Abdalah could handle the Tomlinson case. When the 2008 fee agreement was sent to Wong, Wong responded by sending Abdalah an e-mail asking him to "[p]lease revise contract." His e-mail to Abdalah explained: "In fact, the paperwork for filings that the [Tomlinsons' attorneys] prepared shows SMI Construction, Inc. however, the entity that is actually handling the development project is Bayview Height. [¶] I read something [in] the petition about 'fictitious names . . . [will be amended] with true names and capacities when such information has been ascertained.' [¶] . . . [¶] Please advise on questions corrections above." Abdalah responded: "The 'fictitious names : . .' section is 'boilerplate' language that appears in virtually every complaint. It allows the Plaintiff to add parties later on if it turns out that the wrong entity is named in the complaint or there are other defendants who are identified after the action is filed." Wong took this to mean that the Doe respondents could be replaced with Bayview later. Abdalah did not replace SMI and Wong with Bayview in the revised fee agreement. Wong signed the fee agreement both as an individual and on behalf of SMI.
All of Abdalah's files regarding his defense of the Tomlinson action were labelled "Bayview/Tomlinson." All of Abdalah's legal fees in the Tomlinson action were paid by checks from "Bayview Height." All of Abdalah's time records identified the "Client" in the Tomlinson action as "Bayview." In January 2014, Bayview and Abdalah entered into a tolling agreement. The tolling agreement, signed by Abdalah, stated: "Abdalah performed legal services as attorney of record for Bayview in that action entitled Tomlinson . . . ."
Abdalah objected below to the admission of evidence of how the files were labelled. He claimed that this evidence, Abdalah's own testimony, was irrelevant and lacked personal knowledge. The superior court did not rule on the evidentiary objections, and Abdalah does not renew those objections on appeal.
V. Procedural Background
In July 2014, Bayview filed an action for legal malpractice, breach of fiduciary duty, and unjust enrichment against Abdalah arising from his defense of the Tomlinson action. Bayview alleged that Abdalah had performed incompetently in defending against the Tomlinson action. The Tomlinson action led to the County's approval of the project being overturned, and Bayview was forced to settle the action by paying the Tomlinsons $200,000 and giving up its plans to develop the property.
Bayview subsequently obtained leave to file an amended complaint adding Ly as a plaintiff. Ly subsequently voluntarily dismissed his action against Abdalah. Ly is not a party to this appeal.
In July 2015, Abdalah moved for summary judgment on the ground that he did not owe a duty to Bayview. Abdalah's position was that he had represented only Wong and SMI and had never consented to represent Bayview.
At the hearing on the motion, Bayview argued "two separate issues." One was "whether or not the evidence shows facts which support an implied attorney-client relationship . . . ." The other was whether "the evidence show[s] that Bayview was an intended beneficiary of the attorney services?" Abdalah, on the other hand, insisted at the hearing that the duty issue was simply "a matter of contract interpretation" and that he could not have had an attorney-client relationship with Bayview because he "never consented to represent Bayview . . . ." Abdalah did not assert that Bayview had forfeited its "implied attorney-client relationship" argument by failing to expressly identify it earlier.
The court took the matter under submission and subsequently granted Abdalah's motion. It found that Abdalah had met his burden by showing, based on the pleadings in the Tomlinson action, the fee agreement, and Abdalah's declaration that "he never consented to represent Bayview" in the Tomlinson action, that "Plaintiffs cannot establish the existence of an attorney-client relationship or fiduciary duty . . . ." The court concluded that Bayview had failed to raise a triable issue because it did not establish that Abdalah "ever consented to represent" Bayview in the Tomlinson action. The court entered a judgment of dismissal, and Bayview timely filed a notice of appeal from the judgment.
VI. Discussion
Abdalah claims that Bayview is precluded from asserting on appeal that there was an "implied-in-fact attorney-client relationship" because, according to Abdalah, Bayview raises this issue "for the first time on appeal." Abdalah is not correct.
Bayview's points and authorities in opposition to Abdalah's motion argued that "Bayview . . . [was Abdalah's] true client[] in the underlying matter" and that "[Abdalah] knew BAYVIEW was [its] real client (not Mr. Wong or SMI) . . . ." At the hearing on Abdalah's motion, Bayview explicitly argued that "the evidence shows facts which support an implied attorney-client relationship . . . ." (Italics added.) Since Bayview did argue in the superior court that there was an implied-in-fact attorney-client relationship, it is not raising this issue for the first time on appeal.
Although Abdalah acknowledges that it is a question of fact whether an implied-in-fact attorney-client relationship existed, he argues that the "totality of the circumstances test reveals there was undisputedly no implied-in-fact attorney-client relationship between Bayview and [Abdalah]." He asserts that we make this determination by applying a nine-factor test. Abdalah's only citations in support of this supposed nine-factor test are a formal ethics opinion of the California State Bar, State Bar Formal Opinion No. 2003-161 (State Bar opinion), and Lister v. State Bar (1990) 51 Cal.3d 1117 (Lister). Neither one supports his argument.
We granted Bayview's request for judicial notice of this State Bar opinion. (<http://www.calbar.ca.gov/Portals/0/documents/ethics/Opinions/2003-161_95-0019-wpd-PAW.pdf> [as of Jan. 24, 2020], archived at https://perma.cc/VM8S-MVMK>.)
The State Bar opinion he cites concerned "[u]nder what circumstances may a communication in a non-office setting by a person seeking legal services or advice from an attorney be entitled to protection as confidential client information when the attorney accepts no engagement, expresses no agreement as to confidentiality, and assumes no responsibility over any matter?" The State Bar opinion addressed whether an attorney received confidential communications where there was no formal engagement and the communications were in "a non-office setting." (State Bar opinion, at p. 1.) That issue has no relevance here because the issue before us is not whether Abdalah was engaged as an attorney to defend against the Tomlinson action but whether Bayview was his client in that engagement. The nine-factor test that Abdalah derives from this State Bar opinion was not utilized to determine the identity of a client but to decide whether there was an engagement at all. Abdalah's reliance on Lister is also misplaced. In Lister, the California Supreme Court noted that it was a question of fact whether an attorney-client relationship existed and found that one did exist. (Lister, supra, 51 Cal.3d at p. 1126.) No nine-factor test was mentioned. (Ibid.)
We proceed to a consideration of whether Abdalah met his initial burden and, if so, whether Bayview met its burden of demonstrating that there was a triable issue of fact. Abdalah's burden was to produce evidence that he did not have an attorney-client relationship with Bayview. Abdalah sought to satisfy his burden by relying on his own declaration and deposition testimony that he had never consented to represent Bayview, his fee agreement identifying his clients as Wong and SMI, and the pleadings in the Tomlinson action identifying the defendants as Wong and SMI. Abdalah's evidence satisfied his burden, which meant that the burden shifted to Bayview to produce evidence sufficient to support a finding that an attorney-client relationship had arisen between Abdalah and Bayview.
Bayview sought to meet its burden by relying on, among other things, Wong's declaration that he had been "very clear" with Abdalah that he was seeking Abdalah's services on behalf of Bayview, evidence that Abdalah's files and time records for the Tomlinson action were all identified as "Bayview," the undisputed fact that all of Abdalah's legal fees had been paid by checks from Bayview, and Abdalah's admission in the tolling agreement that "Abdalah performed legal services as attorney of record for Bayview in that action entitled Tomlinson . . . ."
Bayview's showing was sufficient to demonstrate that there was a triable issue of fact whether an attorney-client relationship existed between Abdalah and Bayview. As a corporation, Bayview could only contact Abdalah through an individual. Wong's declaration that he acted as Bayview's representative and told Abdalah that he was acting on behalf of Bayview supports a finding that Abdalah knew that his true client was Bayview, not Wong or SMI. The mere fact that the fee agreement identified Wong and SMI as Abdalah's clients was not definitive since, in response to Wong's inquiry in that regard, Abdalah downplayed any significance in the identity of the defendants named in the Tomlinson action. Indeed, Abdalah's pleadings in the Tomlinson action sought to defend Bayview's project, not any individual interest of Wong or SMI, neither of whom had any identifiable interest in Bayview's project.
"It is the intent and conduct of the parties which is critical to the formation of the attorney-client relationship." (Hecht v. Superior Court, supra, 192 Cal.App.3d at p. 565.) Here, Bayview's evidence was sufficient to support a finding by a preponderance that, despite Abdalah's claim to the contrary, both he and Bayview understood that he was acting on Bayview's behalf in the Tomlinson action. Such a finding supports the existence of an implied-in-fact attorney-client relationship. Since Bayview met its burden, the superior court erred in granting Abdalah's motion.
VII. Disposition
The judgment is reversed. On remand, the superior court shall vacate its order granting summary judgment and enter a new order denying Abdalah's summary judgment motion. Bayview shall recover its appellate costs.
/s/_________
Mihara, J. WE CONCUR: /s/_________
Elia, Acting P. J. /s/_________
Bamattre-Manoukian, J.