Opinion
C090397
10-27-2021
DIANE BRENNAN, Plaintiff and Appellant, v. POLLY WELSH McGILVARY, Defendant and Respondent.
NOT TO BE PUBLISHED
Super. Ct. No. 34-2017-00215594-CU-PN-GDS
RAYE, P. J.Before Joseph Brennan died, he asked his lawyer, defendant Polly Welsh McGilvary, to make changes to a trust concerning his real property. Under the restated trust, Brennan's wife received 80 acres of land that-under the original trust-was to go to Brennan's offspring, including his daughter, plaintiff Diane Brennan. Plaintiff sued defendant, alleging professional negligence and breach of fiduciary duties. The trial court granted defendant's motion for summary judgment.
On appeal, plaintiff argues the trial court erred in ruling defendant owed no duty to plaintiff. We affirm, because plaintiff's claims did not implicate any duty defendant had to plaintiff in connection with the drafting of the original and restated trusts.
BACKGROUND
In March 2012, Brennan asked defendant to prepare a trust for him so that over 300 acres of real property in Sutter County that he received previously from his mother and aunt ("Sutter property") would be distributed 50 percent to plaintiff and 50 percent to plaintiff as trustee for the benefit of Brennan's sons.
In an April 2012 meeting in defendant's office, Brennan, his wife Liliane (who had been married to Brennan for over 30 years, and was not the mother of Brennan's children), plaintiff, and defendant all discussed Brennan's estate plans. During that meeting, Liliane expressed her disappointment that she would not receive any portion of the Sutter property or cattle associated with the property, and plaintiff expressed her understanding the Sutter property was supposed to remain in Brennan's family. Brennan signed the trust instrument at the end of the meeting, the terms of which were consistent with Brennan's March 2012 directions to defendant.
In July 2012, someone claiming to be Liliane's attorney called defendant's office and asked for a copy of Brennan's estate planning documents. Defendant denied the request, as Brennan had not authorized her to share the documents.
In August 2012, a man Brennan identified as Liliane's son drove Brennan to defendant's office, where-in a two-hour meeting, during which defendant "observed [Brennan] to have his mental faculties, and to understand what was being discussed"- Brennan told defendant (i) he was "on hospice"; (ii) Liliane "had a Notary Public come to their house . . . so he could sign a financial power of attorney appointing his wife as his agent, in place of his daughter, so [Liliane] could pay the bills"; and (iii) he wanted to make changes to the trust by giving an 80-acre portion of the Sutter property to Liliane in a restated trust.
After defendant drafted and Brennan signed the restated trust-which provided that, if she survived Brennan, Liliane was to receive an 80-acre portion of the Sutter property and "half the livestock," but otherwise was materially the same as the original trust document-Brennan called Liliane's son into the office and asked him to look at the document so that he "could tell his mother that [Brennan] had made the changes" Liliane "wanted." Brennan told defendant not to tell plaintiff about the restated trust.
Brennan died in June 2014.
In July 2017, plaintiff sued defendant, alleging professional negligence and breach of fiduciary duties.
Regarding the professional negligence claim, plaintiff alleged defendant "owed a duty to [Brennan] to be loyal to him as her client . . . and to not fall below the standard of care," and that "[t]hese duties also attach[ed] to the Brennan trust, and its beneficiaries" and "[Brennan's] children." Plaintiff further alleged that by "changing the Brennan Trust, when any reasonably prudent estate planning attorney would have deduced that there was some form of elder abuse or undue influence at the heart of the new changes, [defendant] fell below the standard of care she owed her client," and "injured the Brennan Trust, the beneficiaries of the trust, and [Brennan's] children, who, by the Brennan Restatement lost a testamentary gift."
Regarding the claim of breach of fiduciary duties, plaintiff alleged defendant "had a duty . . . to act in [Brennan's] and [p]laintiff's highest and best interests at all times, and to not expose [Brennan] or [p]laintiff to unnecessary risk or peril," and breached "her fiduciary duties . . . to [Brennan] and [p]laintiff by doing all of the acts and omissions" alleged in the complaint.
Defendant moved for summary judgment, arguing she owed no duty to plaintiff.
Plaintiff opposed, maintaining defendant "breached her fiduciary duty to plaintiff" and her "duty of loyalty by failing to notify [p]laintiff of her claims of undue influence" by "draft[ing] the Restated Trust" "without any investigation or due diligence into the apparent undue influence."
Relying principally on Chang v. Lederman (2009) 172 Cal.App.4th 67 (Chang), the trial court granted defendant's motion for summary judgment, concluding defendant owed no duty to plaintiff as a beneficiary of the trust. In light of that determination, the trial court did not address defendant's argument that plaintiff's claims were time-barred.
Plaintiff timely appealed.
DISCUSSION
Plaintiff argues the trial court erred by granting the motion for summary judgment, as the case law "support[s] imposing a duty" on defendant to plaintiff, "because [plaintiff] was an express beneficiary under a prior express bequest." "The trial court incorrectly applied Chang," plaintiff contends, because "imposing a duty in this case would not" implicate the decision's concerns with the imposition of" 'impossible duties and limitless liability'" on estate attorneys. Defendant argues the trial court did not err.
We conclude summary judgment was proper, because viewing the evidence in the light most favorable to plaintiff and in light of the case law, plaintiff's claims do not implicate any duty defendant had to plaintiff in connection with the drafting of the original and restated trusts.
Standard of review
" 'Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party. [Citations.]' [Citation.] [¶] 'Whether the trial court erred by granting [the] motion for summary judgment is a question of law we review de novo. [Citation.]' [Citation.]" (Planet Bingo, LLC v. Burlington Ins. Co. (2021) 62 Cal.App.5th 44, 53.)
"Because we review 'the ruling, not the rationale,' we may affirm summary judgment on a different basis than the trial court." (Skillin v. Rady Children's Hospital & Health Center (2017) 18 Cal.App.5th 35, 43.)
Relevant legal principles
"In California . . . the traditional rule was that an attorney could be held liable for professional negligence only to his or her own client. [Citation.] But this strict privity test was rejected in a trio of cases involving testamentary instruments. In the first, Biakanja v. Irving (1958) 49 Cal.2d 647, the plaintiff's brother died after signing a will, prepared by a notary public, which purported to leave the decedent's entire estate to the plaintiff. The notary negligently failed to have the will properly attested, and it was denied probate. The plaintiff thus received only his one-eighth intestate succession share of the estate. Plaintiff sued the notary and recovered a judgment. The Supreme Court held the plaintiff should be allowed to recover, despite the absence of privity." (Hall v. Kalfayan (2010) 190 Cal.App.4th 927, 933 (Hall).)
" 'The determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various 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.' (49 Cal.2d at p. 650.)" (Hall, supra, 190 Cal.App.4th at p. 933.)
"The second case is Lucas v. Hamm (1961) 56 Cal.2d 583. In that case, an attorney was asked to draft a will under which the plaintiffs were to receive 15 percent of the residue of the estate. The attorney negligently drafted a will containing a residuary trust which violated the rule against perpetuities and statutory restraints on alienation. After the death of the testator, the attorney advised the plaintiffs that the residual trust provision was invalid and the plaintiffs would be deprived of the entire amount to which they would have been entitled if the provision had been valid. . . . The Supreme Court extended the Biakanja principles to a negligent attorney . . . . [Citation.] But the court added an additional factor for consideration: 'whether the recognition of liability to beneficiaries of wills negligently drawn by attorneys would impose an undue burden on the profession.'" (Hall, supra, 190 Cal.App.4th at p. 934.)
"In the third case, Heyer v. Flaig (1969) 70 Cal.2d 223, disapproved on other grounds in Laird v. Blacker (1992) 2 Cal.4th 606, it was alleged that the testatrix told her attorney she wanted to leave her entire estate to her two daughters, and also told him of her intended marriage. The attorney drafted a will which the testatrix signed shortly before she married. The will did not provide for her husband nor indicate the testatrix's intention not to provide for him. Upon her death, her husband claimed a portion of the estate as a posttestamentary spouse. The daughters sued the attorney, claiming he negligently failed to advise the testatrix of the consequences of a posttestamentary marriage and negligently failed to include any provision in the will as to the intended marriage. The court reaffirmed the principles set out in Biakanja and Lucas, explaining that the basis for extending tort liability to an intended beneficiary in the absence of privity was a breach of duty owed directly to the beneficiary: 'When an attorney undertakes to fulfill the testamentary instructions of his client, he realistically and in fact assumes a relationship not only with the client but also with the client's intended beneficiaries. The attorney's actions and omissions will affect the success of the client's testamentary scheme; and thus the possibility of thwarting the testator's wishes immediately becomes foreseeable. Equally foreseeable is the possibility of injury to an intended beneficiary. In some ways, the beneficiary's interests loom greater than those of the client. After the latter's death, a failure in his testamentary scheme works no practical effect except to deprive his intended beneficiaries of the intended bequests.' [Citation.]
"In these cases, the testamentary instrument had been executed; the question was whether the will or trust had been negligently prepared so as to frustrate the testator's intent." (Hall, supra, 190 Cal.App.4th at pp. 934-935.)
In Chang, by contrast, the issue was failure to prepare a testamentary instrument; not negligence in the preparation of the testamentary instrument.
"In Chang, the decedent and Ms. Chang lived together for several years before marrying. The decedent, who had been diagnosed with terminal cancer, retained an attorney to prepare a revocable trust approximately six months before he married Ms. Chang. The executed trust provided for distributions of $30,000 and some personal property to Ms. Chang and $10,000 to another individual; Ms. Chang was to vacate the residence within 30 days of the decedent's death; and the property was to be sold or leased for fair market rent. The residue of the trust estate was left to the decedent's only child. A first amendment to the trust, executed a month later, reduced the sum to be distributed to Ms. Chang, eliminated the distribution to the other individual, and expressly left all other provisions of the trust unchanged. During that same period, the decedent executed a will to dispose of property he owned in Israel. After his marriage to Ms. Chang, the decedent executed a second will in Israel which apparently did not provide for her in any way and did not expressly revoke the trust, as amended. Then, five or six months after the marriage, when the decedent was seriously ill, he instructed the attorney to revise his trust to leave the entire trust estate to Ms. Chang, with the understanding that she would give the decedent's son $ 250, 000 when he turned 25. The attorney refused and told the decedent that if he modified the trust, the decedent would be sued by the successor trustee. The attorney also advised that the decedent should have a psychiatric evaluation before making changes to his estate plan. The decedent died a few weeks later without making any further amendments to his trust. After the will and trust were held valid, Ms. Chang sued the attorney for professional negligence, breach of fiduciary duty, and intentional infliction of emotional distress." (Hall, supra, 190 Cal.App.4th at pp. 936-937.)
The Chang court ruled that-while our Supreme Court has recognized that lawyers have "a limited duty, enforceable by the intended beneficiary, to exercise ordinary care and skill to properly effectuate a bequest expressly set forth in [a] testamentary document"-lawyers do not have a "general duty of care to intended beneficiaries, once named in a testamentary document," because of the potential for "impossible conflicting duties" lawyers would have to" 'different sets of beneficiaries.'" (Chang, supra, 172 Cal.App.4th at pp. 84-85, italics added.) For example," '[a]n attorney preparing a will for a testator owes no duty to the beneficiary of the will or to the beneficiary under a previous will to ascertain and document the testamentary capacity of the client.'" (Id. at p. 85, quoting Moore v. Anderson Zeigler Disharoon Gallagher & Gray (2003) 109 Cal.App.4th 1287, 1298.)
Thus, "[b]ecause Chang's allegation she was the intended beneficiary of the entirety of [the decedent's] estate [was] not based on an express bequest in an executed will or trust, [the attorney defendant] owed her no duty of care," and "[h]er claims for both legal malpractice and breach of fiduciary duty fail[ed] as a matter of law." (Chang, supra, 172 Cal.App.4th at p. 86; see Hall, supra, 190 Cal.App.4th at pp. 937-938 ["agree[ing]" with "Chang . . . that there is a need for a clear delineation of an attorney's duty to nonclients," and observing that, in the case at bench, "extending [the defendant lawyer's] duty to potential beneficiaries of [a decedent's] estate would expose him to liability to [decedent's] niece, whose share of the estate would have been reduced" if the lawyer had drafted the testamentary instruments as plaintiff desired].)
Analysis
Though Chang was about non-preparation of a testamentary instrument, and the issue here surrounds preparation of a restated trust, Chang's insights and analysis-in particular, the distinction between a lawyer's limited duty to intended beneficiaries to properly draft estate documents and the nonexistent general duty of care to those same beneficiaries-apply with equal force here. That plaintiff was named in the original trust (and in the restated trust), did not impose on defendant a general duty of care to plaintiff. Rather, defendant's duty to plaintiff was limited to exercising ordinary care and skill to properly effectuate Brennan's bequest expressly set forth in the restated trust.
In the complaint, plaintiff did not allege defendant negligently prepared the restated trust so as to frustrate Brennan's intent. Rather, her claims rested on defendant's alleged failure to investigate or consider the possibility that elder abuse and/or undue influence played a role in Brennan's directions to defendant to make changes to the original trust by giving a portion of the Sutter property to Liliane in the restated trust. But defendant had no such duty to plaintiff, as such a duty "would impose an undue burden" (Lucas v. Hamm, supra, 56 Cal.2d at p. 589) on estate attorneys like defendant, who-confronted with multiple competing potential beneficiaries-would face "impossible conflicting duties" (Chang, supra, 172 Cal.App.4th at pp. 84-85), as Liliane's gain of 80 acres was plaintiff's (and her brothers') loss.
Relying on Osornio v. Weingarten (2004) 124 Cal.App.4th 304 (Osornio), plaintiff contends defendant exhibited "negligence . . . akin to a drafting error such that the [trial] court should have imposed a duty on [defendant] to [plaintiff]." We are not persuaded. Osornio's concern with an attorney's negligent preparation of an express bequest is quite different from a claim of an attorney's failure to investigate possible undue influence on a testator in making a bequest.
Osornio "recognized the right of an intended beneficiary, who was the care custodian of the testator, a dependent adult, to pursue a legal malpractice action against the attorney who drafted the testator's will naming her as executor and sole beneficiary. The plaintiff had alleged the lawyer was negligent in failing to advise the testator that his intended beneficiary was a presumptively disqualified donee under Probate Code section 21350, subdivision (a)(6), and in failing to take appropriate measures to ensure the testator's wishes were carried out by referring her to counsel to obtain a certificate of independent review under Probate Code section 21351, subdivision (b). [Citation.] . . . [Citation.] With respect to the potential burden on the profession, the court explained, 'Imposing liability in this instance would not compromise the attorney's duty of undivided loyalty to the testator. The attorney's duty here was to take appropriate action to carry out the testator's wishes-that were expressed and formalized in her signed will-that her intended beneficiary, Osornio, inherit her entire estate.' [Citation.]" (Chang, supra, 172 Cal.App.4th at pp. 79-80, citing Osornio, supra, 124 Cal.App.4th at pp. 304, 312-313, 329, 336.)
Plaintiff explains in her reply brief that she "seeks to impose a duty of competence," "a limited duty to exercise ordinary care and skill" that is consistent with Chang, "not a duty of loyalty" or the" 'general duty of care' . . . which Chang rejected." She contends that "[h]olding an attorney to the standard of care when the facts suggest undue influence" "simply requires the attorney to adhere to the standard of care by protecting the process."
Accepting plaintiff's clarification on appeal of her claims, we are not persuaded by this attempt to shoehorn a broader duty to investigate possible undue influence on a testator into the limited duty that Chang recognized-to effectuate a bequest expressly set forth in a testamentary document.
Further, plaintiff's clarification on appeal of her claims actually muddies the waters, as it appears to conflate independent claims for breach of fiduciary duty and professional negligence. (Cf. Buehler v. Sbardellati (1995) 34 Cal.App.4th 1527, 1544, fn. 9 [the tort of breach of fiduciary duty" 'is distinct and independent from professional negligence' "].) Plaintiff's characterization on appeal of her claims is in tension with the complaint and the opposition to the motion for summary judgment. As previously noted, plaintiff's complaint asserted defendant owed to plaintiff duties: (a) of loyalty, because her "duty to [Brennan] to be loyal to him as her client" "also attach[ed] to the Brennan trust, and its beneficiaries"; and (b) "to act at all times in good faith and in . . . [p]laintiff's best interests." And plaintiff's opposition to the motion for summary judgment argued defendant (a) "breached her fiduciary duty to plaintiff," and (b) breached her "duty of loyalty by failing to notify [p]laintiff of . . . claims of undue influence."
Accordingly, summary judgment was proper, because plaintiff's claims against defendant do not implicate a duty that defendant had to plaintiff in connection with the drafting of the original and restated trusts.
In light of this conclusion, we need not address the parties' remaining arguments.
DISPOSITION
The judgment is affirmed. Defendant shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
We concur: HULL, J., RENNER, J.