Trusts and Estates

Cortese v. Sherwood

Cite as A152351
Filed July 31, 2018 (modified and published August 21, 2018), First District, Div. Five

By Matthew R. Owens
Withers Bergman LLP
www.withersworldwide.com

When Francesca died in 1997, her husband, Robert, became sole successor trustee of her trust. Robert was the lifetime beneficiary and Francesca’s two daughters from a prior marriage were the remainder beneficiaries. Christina, one of the remainder beneficiaries, filed a petition alleging Robert breached his fiduciary duties as trustee of Francesca’s trust. She also alleged Robert’s attorney, John, was liable under a cause of action framed as third-party liability for breach of trust. Although the petition did not expressly plead conspiracy, John demurred based on a conspiracy statute requiring a plaintiff to obtain a prefiling order where a cause of action alleges an attorney conspired with the attorney’s client. In overruling the demurrer, the trial court found Christina did not facially bring a conspiracy claim. John appealed.

The appellate court reversed. Based on the allegations in the petition, it must be construed as alleging conspiracy between Robert and John, regardless of the label Christina chose for her cause of action. Christina alleged John participated in Robert’s breaches of fiduciary duty by, among other things, mismanaging Francesca’s trust and terminating it in a manner that benefited Robert. She also alleged John induced her not to challenge Robert’s misconduct as trustee much earlier by representing to her that she would receive a large inheritance from Robert’s estate, which she learned was not the case after Robert’s death in 2016. Christina was therefore required to obtain a prefiling order, and neither of her proffered exceptions to that requirement applied. First, John did not owe Christina an independent legal duty as his only duty was to his client, Robert. Second, Christina failed to adequately allege that John was acting in furtherance of personal financial gain beyond merely providing ordinary legal services to his client for a fee.

http://www.courts.ca.gov/opinions/documents/A152351.PDF

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