John B. Gunn Law Corp. v. Maynard

• Decision Date: 05 March 1987
• Citation: 189 Cal.App.3d 1565,235 Cal.Rptr. 180
• Court: California Court of Appeals Court of Appeals
• Parties: JOHN B. GUNN LAW CORP., Plaintiff and Respondent, v. Smilja MAYNARD, Defendant and Appellant. H000244.

Page 180

235 Cal.Rptr. 180

189 Cal.App.3d 1565

JOHN B. GUNN LAW CORP., Plaintiff and Respondent, v. Smilja MAYNARD, Defendant and Appellant.

H000244.

Court of Appeal, Sixth District, California.

March 5, 1987.

Certified for Partial Publication ^*

Review Denied May 20, 1987.

Vincent J. Kilduff, San Jose, for defendant and appellant.

Robert J. Glynn, Camille K. Fong, Glynn & Harvey, San Francisco, Gary E. Gamel, San Jose, for plaintiff and respondent.

AGLIANO, Presiding Justice.

I

An attorney's complaint, seeking compensation for services rendered based on a written contingent fee contract, encountered the client's cross-complaint alleging legal malpractice. After trial, the jury returned verdicts which awarded the attorney $208,000 in damages for the client's breach of the fee contract and rejected the cross-complaint. The client appeals from the ensuing judgment, which we will affirm on the complaint and reverse on the cross-complaint because of instructional error on the issue of proximate cause.

II Background Facts

Defendant and cross-complainant Smilja Maynard (Mrs. Maynard) met Merlin Maynard on June 7, 1975, when he employed her as a part-time live-in housekeeper. At the time he was 75 years old and affected by Parkinson's disease. She was then 55. In August, she assumed the position full-time, and they married on September 12, 1975.

In April 1976, they contacted John Hopkins, an attorney, to prepare a will for Dr. Maynard. Mr. Hopkins learned that some of Dr. Maynard's assets were in a living trust created when Dr. Maynard's first wife was alive. In investigating the facts Mr. Hopkins was incorrectly apprised the residence real property was not in the trust. Mr. Hopkins prepared a will which Dr. Maynard executed on May 21, 1976. The will disposed of property in the trust by an exercise of the testator's power of appointment, but purported to devise the residence to Mrs. Maynard separately--not under the power of appointment. This mistake played a part in subsequent litigation.

Mr. Hopkins prepared a second will at the Maynards' request, which Dr. Maynard executed on June 21, 1976, but immediately revoked.

Mrs. Maynard took her husband to a convalescent hospital in October 1977 because his health had deteriorated. He died there on February 5, 1978.

III The Fee Agreement and Underlying Litigation

Mrs. Maynard initially retained Rolf Bondelie, who filed a petition to probate Dr. Maynard's will. When relatives of the decedent objected to probate, Mr. Bondelie informed her he had a conflict of interest and she should consider hiring another attorney to defend her.

A mutual friend who was also an attorney introduced Mrs. Maynard to John Gunn, representing plaintiff and cross-defendant John B. Gunn Law Corp. ("Gunn"). At their first meeting they reviewed the two wills and the trust agreement. Afterwards, Gunn began to investigate the law and the facts, speaking to their mutual friend and once to Mr. Bondelie and researching the law. They met again about one or two weeks later on May 17, 1978 in Gunn's office for a couple of hours, discussing Mrs. Maynard's knowledge of the preparation of the wills and exploring the case in greater depth. Gunn agreed to accept the case, subject to a written fee agreement. He continued to analyze the case after that meeting. On May 22, 1978, Mrs. Maynard came to his office and read and signed a fee agreement which he presented to her.

The contingent fee agreement recited it was entered into in contemplation of litigation with both the heirs and Wells Fargo Bank who challenged whether the May 21, 1976 will effectively passed the house to Mrs. Maynard without exercising the testator's power of appointment.

The fee agreement obligated Gunn to seek for Mrs. Maynard all assets of her husband's inter vivos trust and his estate. If Gunn failed to recover any property, Mrs. Maynard was obligated to reimburse out-of-pocket costs and to pay a $2,000 retainer. If Gunn recovered any property for her, she owed him, at a minimum, $75 per hour of his services, or 25 percent of the property's value if the case was resolved within six months or 33 1/3 percent thereafter.

After the fee agreement was signed, Gunn contacted Gerald Hansen, the lawyer representing the will contestants, and otherwise undertook to represent Mrs. Maynard's interests, pursuing discovery and identifying issues. Mrs. Maynard visited or called his office on a weekly basis. None of the central issues regarding the effect and validity of the will had been resolved when Gunn presented an addendum to the fee agreement to Mrs. Maynard to sign. On March 21, 1979, he called her to a meeting at a restaurant where she read and signed the addendum, initialing a clause which he had typed over.

On April 23, 1979, Gunn argued for a partial summary adjudication on the power of appointment issue. The court accepted his arguments, and by order dated May 3, 1979, determined that, despite the technical error, the will effectively disposed of the residence to Mrs. Maynard.

On October 1, 1979, the will contest was settled. The heirs' allegations of Dr. Maynard's lack of testamentary capacity and Mrs. Maynard's undue influence were dropped and the May 21 will was accepted as valid. Mrs. Maynard received the residence and its contents, with a value of $465,000, on the conditions that she would be responsible for taxes, the contestants would receive $35,000 cash, and minor issues were deferred. Mrs. Maynard had not paid Gunn any fees before he commenced this litigation.

IV ^**

V The Cross-Complaint

Mrs. Maynard asserts error involving the professional negligence cause of action in her cross-complaint against Gunn. She claimed Gunn allowed the statute of limitations to run before filing a complaint for legal malpractice against John Hopkins for negligently drafting her husband's will.

In order to prevail against Gunn, she had to demonstrate his negligence caused her to lose a meritorious claim against Hopkins. (Lally v. Kuster (1918) 177 Cal. 783, 791, 171 P. 961; Smith v. Lewis (1975) 13 Cal.3d 349, 361, 118 Cal.Rptr. 621, 530 P.2d 589 (disapproved on another ground in In re Marriage of Brown (1976) 15 Cal.3d 838, 851, fn. 14), 126 Cal.Rptr. 633, 544 P.2d 561; Campbell v. Magana (1960) 184 Cal.App.2d 751, 754-757, 8 Cal.Rptr. 32, and cases there cited.) In other words, she had to show she would have prevailed on a legal malpractice claim against Mr. Hopkins had Gunn not allowed the statute of limitations to run, as indeed he had.

The jury's special verdicts found that Mr. Hopkins had been negligent, but that his negligence did not cause Mrs. Maynard damage. Therefore, as the special verdicts were structured, the jury was not required to reach the issue whether Gunn was negligent, since it determined any possible negligence of Gunn was not a proximate cause of injury to Mrs. Maynard.

Mrs. Maynard asserts the trial court gave the jury the wrong instructions on causation, refusing her own requested instructions. We review the evidence on this point in her favor. (Sills v. Los Angeles Transit Lines [1953] 40 Cal.2d 630, 633, 255 P.2d 795; Hasson v. Ford Motor Co. [1977] 19 Cal.3d 530, 548, 138 Cal.Rptr. 705, 564 P.2d 857.)

A. Damages Caused by Legal Malpractice

While Gunn was retained by Mrs. Maynard to obtain distribution of her husband's assets and defend her in the will contest, he also undertook to sue the will drafter on her behalf. The jury was instructed that Gunn had filed a legal malpractice complaint against Mr. Hopkins on May 7, 1979, alleging negligent preparation of the will, which action was dismissed because the statute of limitations had run.

Mrs. Maynard's legal expert testified Mr. Hopkins should have drafted her husband's will differently to avoid confusion about his intent that she, as his wife, inherit their home. Mr. Hopkins should have discovered the home was an asset of an existing trust. The will should have invoked the testator's power of appointment over the house to dispose of it to Mrs. Maynard but it did not.

In Mrs. Maynard's view, Hopkin's negligence caused her to incur the legal fees and expenses involved in resisting the challenge of her husband's relatives as to the power of appointment issue. Prior to trial, she had not paid any attorney's fees to Gunn or her prior probate attorney, but, of course, the trial on Gunn's complaint determined she was obligated under their contingent fee contract for 33 1/3 percent of the value of the property he recovered for her.

Mrs. Maynard's legal expert offered an opinion that the issues of testamentary capacity and undue influence would not have been raised in the will contest if the issue of exercise of the power of appointment had not been manifest. At the same time, he acknowledged, "if you are going to contest a will, you contest it on every possible ground." He also acknowledged that, on the facts, undue influence was an arguable issue.

B. The Requested Instructions

No one disputes that an attorney's negligence need not be the sole proximate cause of a client's loss to establish a case of malpractice. (Modica v. Crist (1954) 129 Cal.App.2d 144, 147-148, 276 P.2d 614; Ishmael v. Millington (1966) 241 Cal.App.2d 520, 529, 50 Cal.Rptr. 592; Cline v. Watkins (1977) 66 Cal.App.3d 174, 178, 135 Cal.Rptr. 838.) Mrs. Maynard complains that the trial court should have given BAJI No. 3.76 and/or BAJI No. 3.78 at her request, rather than BAJI No. 3.75 at Gunn's request.

Mrs. Maynard requested the following instruction based on BAJI No. 3.76: "A legal cause of injury is a cause which is a substantial factor in bringing about the injury." Mrs. Maynard also requested the following instruction based on BAJI No. 3.78: "Where two causes combine to bring about an injury and either one of them operating alone would have been sufficient to cause the injury, either cause is considered to be a [proximate] [legal] cause of the injury if it is a material...