Tsutsui Enterprises v. Anderson CA3

Filed 7/25/23 Tsutsui Enterprises v. Anderson CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ----

TSUTSUI ENTERPRISES, INC., C095693

Plaintiff and Appellant, (Super. Ct. No. 34-2018- 00229418-CU-PN-GDS) v.

MICHAEL J. ANDERSON,

Defendant and Respondent.

Plaintiff Tsutsui Enterprises, Inc. (TEI), sued its former corporate attorney, defendant Michael J. Anderson, for legal malpractice and breach of fiduciary duty. After TEI made its opening statement at trial, the trial court granted Anderson’s motion for nonsuit on the ground that TEI could not prove its claims without expert testimony on the applicable standard of care. TEI appeals, contending that it was error to grant the motion for nonsuit because the “common knowledge” exception to the general rule requiring expert testimony applies. We disagree with TEI and affirm the judgment.

1

FACTUAL AND PROCEDURAL BACKGROUND A. The facts1 TEI is a small farming business established by the Tsutsui family. The business remained in the family and, eventually, Thelma Tsutsui took over the principal role at TEI. Thelma was assisted by her two sons, Donald Tsutsui and Fred Tsutsui. Donald, the elder son, was the operations manager, while Fred, the younger son, managed the field work. Thelma, Donald, and Fred served as the three members of TEI’s board. In the late 1980’s, Thelma retired from TEI and stepped down from the board. Although TEI’s bylaws required the board to have three members, TEI’s attorney, Anderson, did not advise Donald or Fred of this requirement. After Thelma retired, Donald and Fred remained on the board as president and vice president, respectively, but they did not choose a third board member. At the time of Thelma’s retirement, TEI owned two pieces of property. The first parcel, “County Road 24,” included housing structures for workers, storage, a workshop, and an office for TEI business. The second parcel was a piece of farmland, which TEI leased to a larger entity for farming. In 1997, Donald asked Anderson, as TEI’s attorney, to prepare a stock purchase agreement (the agreement) meant to ensure that TEI would pass to subsequent generations, which he did. The agreement was binding on Donald, Fred, and their family members and heirs. It granted Donald 5,100 shares of TEI stock and granted Fred 4,900 shares. The agreement further addressed Donald and Fred’s life insurance policies, which were owned by TEI and purchased for the express purpose of fulfilling the agreement. As relevant here, the agreement provided that in the event of Donald or Fred’s death, TEI would use the insurance proceeds to purchase the decedent’s stock from his estate. The stock purchase price was to be determined by TEI’s accountant