Urick v. Greenspoon Marder LLP
| Docket Number | B313277 |
| Decision Date | 22 August 2022 |
| Parties | DANA URICK et al., Plaintiffs and Respondents, v. GREENSPOON MARDER LLP et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles No 20STCV49933, Maureen Duffy-Lewis, Judge. Affirmed.
Greenspoon Marder, John H. Pelzer and Germain D. Labat for Defendants and Appellants.
Ulwelling Law, James K. Ulwelling and Lauren E. Saint for Plaintiffs and Respondents.
Former trustee Dana Urick brought an action individually and as guardian ad litem for her son Trentyn M. Urick-Stasa against her former attorneys, James H. Turken and the law firm Greenspoon Marder LLP (collectively Greenspoon).[1] The complaint contained causes of action for professional negligence, breach of contract, and interference with prospective economic advantage based on allegations that the legal services provided by Greenspoon to Dana as trustee resulted in her removal as trustee and the potential disinheritance of Dana and Trentyn as beneficiaries. Greenspoon filed a special motion to strike under Code of Civil Procedure section 425.16 (the anti-SLAPP statute), which the trial court denied.[2]
On appeal from the order denying the anti-SLAPP motion, Greenspoon contends the claims are based on speech and litigation activities taken on behalf of the trustee, which are protected by the anti-SLAPP statute because the attorneys owed no duty to Dana as an individual or to the beneficiaries of the trust. We conclude the wrongful conduct alleged in the complaint is the breach of duties owed to Dana as a client, which resulted in damages to her personally, and the breach of duties owed to Dana and Trentyn as third-party beneficiaries, by providing legal advice and services below the standard of care. A breach of professional duties arising from an attorney-client relationship is not protected conduct under the anti-SLAPP statute, even when it is related to speech and petitioning activity. Because the alleged conduct is not protected, we do not reach the second step of the anti-SLAPP analysis to determine whether the claims have minimal merit, including whether Greenspoon owed duties to Dana or Trentyn under the circumstances of this case. Therefore, we affirm.
Summary of Background Facts[3]
Allyne L. Urick created the Allyne L. Urick Trust in 2013, which she fully restated in 2014. (Urick 1, supra, 15 Cal.App.5th at pp.1186-1187.) The trust provided upon Allyne's death for annuity payments over a specified period of time to her son Willis E. Urick III, her daughter Dana, and her grandson Trentyn. The remainder was to be distributed to Phillips Academy Andover. The trust's primary asset was an apartment building held in a joint venture with Lucien Seifert. When Allyne passed away in 2015 Dana was appointed as the successor trustee.
Dana engaged a law firm which filed a petition on February 16, 2016, to reform the trust. The attorney caption and the attorney signature block did not specify whether the attorneys represented Dana individually, in her capacity as trustee, or both. The body of the petition stated the petitioner was "Dana Urick, Trustee of The Allyne L. Urick Trust." Dana signed a verification of the petition which did not state whether she was signing the verification individually, as trustee, or both. The proposed reformation eliminated Willis's interest in the trust and substantially reduced the likelihood that Phillips Academy would receive any assets from the trust. Although the proposed reformation benefited Trentyn, he did not expressly file or join in the petition.
In May 2016, Willis filed a petition for instructions as to whether the reformation petition violated the no contest clause of the trust, as well as a petition to remove and surcharge Dana as trustee (collectively the trust proceedings). In response to the no contest petition, Dana, as trustee, filed an anti-SLAPP motion, which the trial court granted. Willis filed an appeal.
In October 2017, this appellate court reversed the order denying the anti-SLAPP motion in the trust proceedings. (Urick 1, supra, 15 Cal.App.5th p. 1186.) We concluded the no contest petition was based on protected litigation activity, but Willis had demonstrated the minimal merit necessary to proceed if the trier of fact credited his evidence. Although Dana provided conflicting evidence from which the trier of fact could find that she filed the reformation petition in her capacity as a trustee, that the petition was based on allegations of mistake, and that Dana had a reasonable basis to believe the petition would be reformed as proposed, Dana's evidence did not conclusively establish these facts as a matter of law, and therefore, the anti-SLAPP motion had to be denied. (Urick 1, supra, 15 Cal.App.5th at pp. 11961198.)
Dana, as trustee, initiated procedures to buy out Seifert's interest in the apartment building, but the purchase was not completed. In November 2017, attorney Mark Boykin, who had drafted Allyne's estate plan, filed a lawsuit on behalf of Seifert against Dana as trustee. Dana engaged a second law firm to file a cross-complaint on her behalf as trustee against Seifert (collectively the Seifert litigation).
In November or December 2017, Dana, as trustee, retained a third law firm, Elkins Kalt Weintraub Reuben Gartside, LLP, to provide guidance and legal representation in matters related to trust administration and litigation concerning the trust, including the trust proceedings and the Seifert litigation.
In May 2018, the second law firm filed an amended petition for reformation on behalf of Dana, and a second amended petition for reformation was filed in July 2018.
In October 2018, Dana retained Greenspoon to represent her in her capacity as trustee and provide guidance about fulfilling her fiduciary duties. She clarified in an email that Greenspoon was representing her as trustee only, because she had not been sued individually in the Seifert litigation. Although she had been sued individually in the trust proceedings, she had individual counsel for those matters already. She agreed that Greenspoon should be associated in on all matters. She did not anticipate significant work in the trust proceedings until the following year, however, and preferred to wait until Greenspoon had an estate attorney in house.
In February 2019, Elkins Kalt terminated its association as co-counsel for Dana, as trustee, in the Seifert litigation, leaving Greenspoon as counsel for the trustee. In May 2019, attorney Lawrence Lebowsky was appointed guardian ad litem for Trentyn in the trust proceedings only. That same month, Dana, as trustee, substituted Greenspoon for Elkins Kalt in the trust proceedings.
Dana withdrew her second amended petition for reformation in July 2019, on the first day of trial. On January 23, 2020, the probate court granted Willis's request in the trust proceedings to suspend Dana as trustee. The court appointed interim successor trustees from ConservaTrust Fiduciary Services, Inc. Dana was ordered, individually and as the former trustee, to provide all necessary information to the interim successor trustees. Greenspoon had appeared for Dana in her capacity as trustee, another set of attorneys appeared for Dana in her individual capacity, and Lebowsky appeared as guardian ad litem for Trentyn.
On December 31, 2020, Dana filed a complaint on behalf of herself individually and as guardian ad litem for Trentyn against Greenspoon for professional negligence, breach of contract, and interference with prospective economic advantage.
The preliminary facts of the complaint alleged that Dana, in her capacity as trustee, met with and retained Greenspoon in October 2018 to provide legal services. An attorney-client relationship was entered into that was partly oral, partly implied, and partly in writing. Greenspoon provided legal services to Dana as trustee, or negligently failed to do so with respect to the trust proceedings. Greenspoon knew Dana and Trentyn were beneficiaries of the trust. Greenspoon agreed to competently provide legal services to Dana as trustee with respect to her involvement in the trust proceedings. The parties intended that Greenspoon would competently advise Dana of her fiduciary obligations as trustee and that Greenspoon's representation would benefit the beneficiaries of the trust, including Dana and Trentyn.
In the first count for professional negligence, Dana alleged Greenspoon failed to exercise the degree of skill necessary and fell below the standard of care for attorneys in the community based on the following conduct: (1) Greenspoon failed to advise Dana of the risks of continuing to pursue a petition for reformation of the trust to her interests as trustee and to her and Trentyn's interests as beneficiaries; (2) Greenspoon failed to advise Dana that her communications with Greenspoon would be disclosed to a successor trustee if Dana were suspended or removed, causing disclosure of information that she would not have disclosed if she had been so advised; (3) Greenspoon failed to advise Dana of her fiduciary duties as trustee, and acted on her behalf, including pursuing a petition for reformation, in a manner that may be held to have violated her fiduciary duties and disinherit her; (4) Greenspoon's conduct with respect to the Seifert litigation resulted in a less lucrative settlement than if Greenspoon acted competently, leading other trust beneficiaries to seek a surcharge against Dana (5) Greenspoon charged fees for legal work that may not have benefitted the trust, leading to...
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