Abinante vs. Stradling Yocca Carlson & Rauth

Defendant argues these claims now fail because the attached Attorney-Client Fee Agreement does not, in fact, evidence any attorney-client relationship between Plaintiffs and Defendant, and the facts appearing in that exhibit must be accepted as true and are given precedence over contradicting allegations in the FAC. (See Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 994 [citing Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1627].)

“The elements of a legal malpractice action are: (1) a duty to use such skill, prudence, and diligence as are commonly exercised by other members of the legal profession; (2) breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney’s negligence.” (Sangha v. LaBarbera (2006) 146 Cal.App.4th 79, 84- 85.)

Under California law, “a duty may arise absent privity of contract, and not based upon an attorney-client relationship,” where the plaintiff is an intended beneficiary of the legal services. (See Goldberg v. Frye (1990) 217 Cal.App.3d 1258, 1267.) “The determination of duty rests upon the assessment of six considerations: ‘(1) the extent to which the transaction was intended to affect the plaintiff; (2) the foreseeability of harm to the plaintiff; (3) the degree of certainty that the plaintiff suffered injury; (4) the closeness of the connection between the defendant’s conduct and the injury; (5) the policy of preventing future harm; and (6) whether recognition of liability under the circumstances would impose an undue burden on the profession.’” (Id. at p. 1268, citing a secondary source.) “An essential predicate for establishing an attorney's duty of care under an ‘intended beneficiary’ theory is that both the attorney. . . and the client . . . must have intended [the third party] to be the beneficiary of legal services [the attorney] was to render. [Citation omitted.]

Even if the lawyer’s representation could incidentally benefit the claimant, that does not sufficiently satisfy this predicate. [Citations.] This rule governs the analysis, even if the attorney knows that third parties will be affected by his representation of his client.

Without more, such knowledge is not sufficient to create a duty of care. [Citation.]” (Zenith Ins. Co. v. O’Connor (2007) 148 Cal.App.4th 998, 1008.)

It is well established that an attorney owes fiduciary and ethical obligations to her or his client. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094; see also Mix v. Tumanjan Development Corp. (2002) 102 Cal.App.4th 1318, 1323, citing PLCM.)

Here, the attached written agreement specifically provides that Defendant Stradling “represent[s] only COVID Clinic, Inc. in this matter . . . [and does] not represent any other entity or person, including any other company, partnership, organization, director, officer, employee, member, shareholder, partner, agent or family member, in this matter. Any representation by [Stradling] of such other entity or person will be established only in a separate written agreement.” (FAC, Ex. A at p. 1.)

To the extent Plaintiffs allege and contend Defendant owed a duty pursuant to written contract, that claim fails as a matter of law. The written contract attached to the FAC (FAC, Ex. A) does not evidence the existence of any attorney-client relationship between Plaintiffs and Defendant Stradling.

While that contract language does not foreclose the existence of a duty, the FAC alleges no facts to support the existence of a duty to Plaintiffs Abinante and/or Rume Health based on an oral contract or a contract implied by conduct. (See generally FAC.) Plaintiffs argue the attorney-client agreement was implied by conduct but rely on purported facts outside the four corners of the operative complaint.

Second Cause of Action (Breach of Contract)

The court sustained the demurrer to the second cause of action because it could not be ascertained whether the alleged contract is written, oral, or implied by conduct.

Plaintiffs addressed the issue by amending the complaint to allege the attorney-client relationship is “evidenced by the written Attorney- Client Fee Agreement attached” to the FAC. (FAC ¶ 7.)

The FAC alleges Defendant Stradling breached the parties’ contract to provide competent legal services, by failing to properly advise Plaintiffs on the purchase of a medical laboratory, failing to disclose conflicts of interest, failing to provide proper guidance, failing to

properly draft an agreement, and placing Plaintiff Abinante’s intellectual property rights at risk. (FAC ¶ 18.)

The elements of a cause of action for breach of contract are: (i) existence of the contract; (ii) Plaintiff’s performance or excuse for nonperformance; (iii) Defendant’s breach; and (iv) damage to plaintiff resulting therefrom. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811.)

As discussed above, neither the attached contract nor the allegations in FAC show the existence of a contractual relationship between Plaintiffs and Defendant Stradling.

Fourth Cause of Action (Equitable Indemnity)

The FAC alleges Plaintiffs are entitled to equitable indemnification from Defendant to the extent Plaintiffs are subject to fines and penalties following the California Department of Justice’s investigation of actions Plaintiffs took following Defendant’s legal advice. (FAC ¶ 26.)

The elements of a cause of action for indemnity are: (1) a showing of fault on the part of the indemnitor; and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible. (Expressions at Rancho Niguel Ass’n v. Ahmanson Developments, Inc. (2001) 86 Cal.App.4th 1135.)

Here, as discussed above, the Complaint alleges no wrongdoing by Defendant.

Should Plaintiffs desire to file an amended complaint that addresses the issues in this ruling, Plaintiffs shall file and serve the amended complaint within 30 days of service of the notice of ruling.

Defendant is ordered to give notice.

2 Apple Dream, LLC vs. Chae TENTATIVE RULING:

Demurrer to Cross-Complaint

Cross-Defendant Yebin Kim demurs to the Cross-Complaint of Cross-Complainant/Defendant Bongroung Chae. For the following reasons, the demurrer is OVERRULED in part and SUSTAINED in part with leave to amend.