Powell v. MacDonald & Cody, LLP, et al

The motion must stand self- sufficient and cannot succeed because the opposition is weak. [Citations.] A party cannot succeed without disproving even those claims on which the opponent would have the burden of proof at trial. [Citations.] [¶] When a summary judgment motion prima facie justifies a judgment, the third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue.” (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064- 65.)

When the moving party is a plaintiff, the initial burden is met by a showing that there is no defense to the action or rather by proving each element of the cause or causes of action. (See Code Civ. Proc., § 437c, subd. (p)(1).) Likewise, defendants can meet their initial burden by showing that a cause or causes of action have no merit because one or more elements of the claims “cannot be established.” (See Code Civ. Proc., § 437c subd. (p)(2).) Once the movant has met the initial burden, the burden then shifts to the opposing party to produce admissible evidence showing that there is a triable issue of material fact. (Aguilar, supra, 25 Cal.4th at pp. 849-851.)

However, if the movant does not satisfy the initial burden, the motion must be denied and it is unnecessary for the court to consider the opposition. (Swanson v. Morongo Unif. Sch. Dist. (2014) 232 Cal.App.4th 954, 963.) The party opposing an MSJ must provide proof showing a triable issue of fact; equivocal evidence will not suffice. (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial § 10:203 (“Weil & Brown”), citing Ahrens v. Sup. Ct. (Pac. Gas & Elec. Co. (1988) 197 Cal.App.3d 1134, 1152.)

Declarations and evidence offered in opposition to a motion for summary judgment must be liberally construed, while the moving party’s evidence must be construed strictly. The opposing party cannot controvert the moving party’s declarations by evidence “based on speculation, imagination, guess work, or mere possibilities.” (Weil & Brown, supra, § 10:203.1, citing Doe v.

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Salesian Soc. (2008) 159 Cal.App.4th 474, 481.) Opposing declarations, while liberally construed, cannot contain inadmissible evidence, either hearsay or conclusions. (Overland Plumbing, Inc. v. Transamerica Ins. Co. (1981) 119 Cal.App.3d 476, 483.) Any evidentiary objections not made are deemed waived. The Court, additionally, must consider reasonable inferences drawn from the presented evidence. (Code Civ. Proc., § 437c, subd. (c); Aguilar, supra, 25 Cal.4th at p. 843.) The opposing party may not rely upon the allegations or denials in its pleadings, but must “set forth the specific facts showing that a triable issue of material fact exists.” (Code Civ.

Proc., § 437c, subd. (p)(2).) The opposing party’s failure to file counter-declarations or opposition does not relieve the moving party of the above burden, i.e., it is still the moving party’s burden to prove he is entitled to judgment. (Villa v. McFerren (1995) 35 Cal.App.4th 733, 743-45; FSR Brokerage, Inc. v. Sup. Ct. (1995) 35 Cal.App.4th 69, 73-75, fn. 4.) The court’s sole function on a motion for summary judgment is issue finding, not issue determination. (See Zavala v. Arce (1997) 58 Cal.App.4th 915, 926.)

The judge must determine from the evidence submitted whether there is a triable issue as to any material fact. (Id. at p. 926.) If there is a single such issue, the motion must be denied. (Joseph Schlitz Brewing Co. v. Downey Distributor (1980) 109 Cal.App.3d 908, 914.) Motion for Summary Adjudication The same rules of summary judgment must apply to the summary adjudication of issues. If the pleadings are not defective, the court may then determine from the evidence in support of and in opposition to the motion “whether the triable issues apparently raised by them are real or merely the product of adept pleading.” (Hejmadi v.

AMFAC, Inc. (1988) 202 Cal.App.3d 525, 536.) A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims of damages, or one or more issues of duty. (Code Civ. Proc., § 437c, subd. (f); Paramount Petroleum Corporation v. Superior Court (2014) 227 Cal.App.4th 226.) A summary adjudication motion is subject to the same rules and procedures as a summary judgment motion. (Lomes v. Hartford Financial Service Group, Inc. (2001) 88 Cal.App.4th 127, 131.)

Furthermore, the motion for summary adjudication must specifically identify each specific cause of action, affirmative defense, claim of damages or issue of duty to be adjudicated, and repeat each such identification verbatim in the separate statement, even if each item to be

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adjudicated relies on the same evidence offered to support summary judgment. (Rules of Court, Rule 3.1350(b).) Summary adjudication is granted when the moving party establishes that there are no triable issues of material fact, and the moving party is entitled to entry of judgement as a matter of law. (RC Royal Development and Realty Corp. v. Standard Pacific Corp. (2009) 177 Cal.App.4th 1410.) Economic Loss Rule Defendants first argue that they are deserving of summary judgment because Plaintiffs cannot establish damages, as a matter of law, based on the economic loss rule.

The economic loss rule “is deceptively easy to state: In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922.) Otherwise stated, “‘[t]he economic loss rule requires a [contractual party] to recover in contract for purely economic loss due to disappointed expectations, unless [the party] can demonstrate harm above and beyond a broken contractual promise.” (Rattagan v.

Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20 (“Rattagen”), quoting Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) “Quite simply, the economic loss rule ‘prevent[s] the law of contract and the law of tort from dissolving one into the other.’” (Robinson, supra, 34 Cal.4th at 988, quoting Rich Products Corp. v. Kemutec, Inc. (E.D. Wis. 1999) 66 F. Supp. 2d 937, 969.) In view of this rule, a party alleging fraud or deceit in connection with a contract must establish tortious conduct independent of a breach of the contract itself, that is, violation of some independent duty arising from tort law. (Robinson, supra, 34 Cal.4th at 990.)

Defendants argue that because Defendants and Plaintiffs relationship is based on contract, all of Plaintiffs claims fail because they are based in tort and Plaintiffs cannot show that the Defendants violated an independent duty arising from tort law, aside from the contract-based duties. This argument would carry some weight, and potentially dispose of all of Plaintiffs claim, but for the fact Defendants fail to include as their evidence, or even as part of the Undisputed Material Facts (UMF) any evidence of a contract between the parties.

Defendants have not met their burden to show that all the claims arise out of duty based in contract because they provide no underlying contract. ///

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Availability of Damages Resulting from Emotional Distress Defendants argue that under the claims alleged, Plaintiffs are not eligible for damages based on emotional distress. Indeed, “[e]motional distress damages ordinarily are not recoverable in a legal malpractice action if the representation concerned primarily the client’s economic interests and the emotional injury derived from an economic loss.” (Ovando v. County of Los Angeles (2008) 159 Cal.App.4th 42, 73.) However, “where a plaintiff sufficiently alleges intentional or affirmative misconduct by an attorney or noneconomic injury resulting from an attorney’s professional negligence, recovery of emotional distress damages is permitted.” (Smith v.

Superior Court (1992) 10 Cal.App.4th 1033, 1040.) In Kaushansky v. Stonecroft Attorneys, APC, the Court of Appeal, Second District held that emotional damages could be awarded where there was evidence of “intentional misconduct,” on the part of the attorney. (Kaushansky v. Stonecroft Attorneys, APC (2025) 109 Cal.App.5th 788, 806.) Specifically, the Court of Appeal found Ovando v. County of Los Angeles, supra, which is cited by Defendants, as distinguishable because it did not “consider whether emotional distress damages are recoverable in a breach of fiduciary duty cause of action.” (Kaushansky v.

Stonecroft Attorneys, APC, supra, 109 Cal.App.5th at 807.) Plaintiffs’ second cause of action is for breach of fiduciary duty, and Defendants do not put forward any specific argument defeating this cause of action in particular. As such, Defendants have failed to uphold their burden that, as a matter of law, Plaintiffs cannot claim emotional distress damages. Legal Malpractice Cause of Action Defendants next appear to challenge Plaintiffs’ first cause of action, arguing that Plaintiffs, as a matter of law, cannot establish that Defendants’ negligence caused the damages sought. (Mem. at 12-14.)

In a legal malpractice claim, “[t]he plaintiff must prove, by a preponderance of the evidence, that but for the attorney’s negligent acts or omissions, he would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred.” (Namikas v. Miller (2014) 225 Cal.App.4th 1574, 1582.) Defendants argue that the damages claimed is not based on any alleged malpractice. Defendants are focusing on a specific measurement of damages, instead of the underlying claim.

If Plaintiffs can establish the essential elements, the jury will determine the appropriate damages. In its causation argument, Defendants do not carry their burden to establish that Plaintiffs cannot establish the elements of legal malpractice.

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Defendants also argue that Plaintiffs are required to show that Roberts would have accepted a lesser settlement amount to have a successful legal malpractice claim. (Mem. at 15-17.) “The law in California is well established that when legal malpractice involves negligence in the prosecution or defense of a legal claim, the case-within-a-case methodology must be used. More specifically, for purposes of this case, which involved settlement of litigation, the plaintiff must prove his opponent in the underlying litigation would have settled for less, or that following a trial, plaintiff would have obtained a judgment more favorable than the settlement.” (Orrick Herrington & Sutcliffe v.

Superior Court (2003) 107 Cal.App.4th 1052, 1054.) Plaintiffs argue that in the Roberts Action, Defendants could have argued application of Civil Code, section 47, which would have protected Plaintiffs’ reporting of the allegations to law enforcement, and would have resulted in a complete dismissal of the Roberts Action, without the need for a settlement. (Am. Opp. at 16-17.) Plaintiffs’ argument, however, does not carry much weight because the underlying allegations in the Roberts Action involve more than Plaintiffs’ alleged reporting to police, including the Plaintiffs alleged extortion of Roberts. (Def.

RJN Ex. 2 at 7-8.) As such, this argument turns on whether Defendants have shown, as a matter of law, that Plaintiffs cannot show they would have obtained a more favorable judgment or settlement, or if Plaintiffs have created an issue of fact as to this issue. This argument could have had merit, but for the fact that Defendants do not put forth credible evidence as to what the Roberts Action actually settled for. Defendants’ UMF 5 states that the Roberts Action settled for a payment of $500,000 to Roberts and $300,000 to Roberts’ attorneys, fully funded by Plaintiffs’ insurance carrier.

As evidence for this premise, Defendants point to Sonya’s responses to RFP 6 and Special Interrogatory 7. (A. Mitchell Decl. Ex. 3-4.) These responses, however, do not establish the amount the Roberts Action settled for. Defendants further argue that Plaintiffs’ legal malpractice claim fails based on the applicable statute of limitations. Under Code of Civil Procedure section 340.6, subdivision (a), “[a]n action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission,

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whichever occurs first.” The same section also states that the statute of limitations “shall be tolled” where “[t]he attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.” (Code Civ. Proc., § 340.6, subd. (a)(3).) In the case at hand, Defendants do put forth evidence that Plaintiffs were aware or should have been aware of any malpractice claims against them on August 11, 2022, when Defendants forwarded Plaintiffs an email, written by opposing counsel in the Roberts Action, outlining all of the mistakes Defendants had made. (B.

Thomas Decl. Ex. 6.) Indeed, this document puts Plaintiffs on notice of legal malpractice claims, such that, absent any tolling, the current claim of legal malpractice should have been filed on or before August 11, 2023. Plaintiffs produce evidence of Thomas, partner of M&C, sending them an email related to the Roberts action on September 13, 2023. However, Neither party, however, provides any evidence as to when Defendants were actually removed as counsel for Roberts Action. On its own motion this Court takes Judicial Notice of two Substitutions of Attorney filed September 30, 2022, in CIVDS2008730.

In both forms, Thomas consented to substitution on September 21, 2022, and new counsel accepted substitution on September 21, 2022. As such, under the clear language of section 340.6, which states that the statute of limitations “period shall be tolled during the time...the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.” (Code Civ. Proc., § 340.6, subd. (a)(2).) As such, Defendants statute of limitations argument fails.

Claims Brought by Jason Defendants argues that Jason’s claims against them should be dismissed because he did not answer discovery. (Mem. at 18-19.) Jason is deceased and, under Code of Civil Procedure section 377.30, “[a] cause of action that survives the death of the person entitled to commence an action or proceeding passes to the decedent’s successor in interest.” Sonya is Jason’s successor in interest. Defendants have motions to compel pending, seeking discovery related to Jason, needed to be answered by Sonya.

These motions are set to be heard May 20, 2026. Regardless of the outcome, however, Sonya is pursuing Jason’s claims, and will either be forced to produce the required discovery, or the claims will move forward without it. /// ///

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Fraudulent Concealment Cause of Action “[T]he elements of a cause of action for fraud based on concealment are: ‘(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.’” (Kaldenbach v.

Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850, quoting Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665–666.) Defendants challenge Plaintiffs’ fraudulent concealment claim, arguing there was no affirmative act of concealment, no intent to defraud, there is no link between any concealment and any damages, and that Plaintiffs sustained no such damages. Defendants argue that a fraudulent concealment claim requires more than a failure to disclose, and that is not shown here.

Defendants, however, rely only on Torres v. Adventist Health System/West (2022) 77 Cal.App.5th 500, a case that specifically involved a claim under the Consumer Legal Remedies Act, and which has been severely limited by the California Supreme Court. (See Capito v. San Jose Healthcare System, LP (2024) 17 Cal.5th 273.) Indeed, a fraudulent concealment case can also be called a “fraudulent omission case,” implying no affirmative act of concealment is necessary. (See, e.g., Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1193.)

The majority of Defendants’ argument in this section is that Plaintiffs never asked the questions that then would have prompted Defendants to disclose the omitted facts. Plaintiffs have no requirement to ask questions under a fraudulent concealment claim. Indeed, “[f]raudulent concealment includes nondisclosure where there is a duty to disclose.” (Lovejoy v. AT&T Corp. (2004) 119 Cal.App.4th 151, 153.) As such, this argument fails. Defendants next argue that Plaintiffs have no evidence of intent required for a claim for fraudulent intent.

However, courts have “rejected the contention that in a fraud cause of action it is necessary the defendant intend to cause the plaintiff to suffer particular damage.” (Lovejoy v. AT&T Corp., supra, 119 Cal.App.4th at 161.) In Lovejoy, the Court of Appeal, Third District found a triable issue of fact as to intent to defraud where defendant “AT&T offered no evidence, such as an attempt to comply with the statute, to refute this element.” (Ibid.)

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In the case at hand, the same is true. Defendants present no actual evidence to show they did not intend to defraud when they failed to inform Plaintiffs of case strategy and consequences of actions within the litigation, as detailed in the FAC, they simply try to put the onus on Plaintiffs even though they bear the burden as the moving party. Indeed, “[a]s to each claim as framed by the complaint, the defendant must present facts to negate an essential element or to establish a defense. Only then will the burden shift to the plaintiff to demonstrate the existence of a triable, material issue of fact.” (Crown Imports, LLC v.

Superior Court (2014) 223 Cal.App.4th 1395, 1403.) Defendants argue that Plaintiffs 1) did not suffer any damages, and 2) that any damages incurred are unrelated to any concealment by Defendants. Defendants again focus on damages related to Plaintiffs missed business opportunities. But Plaintiffs allege different types of damages, including non-economic damages related to their reputation and emotional state. Defendants again fail to “present facts to negate an essential element or to establish a defense.”

Undisputed Material Facts: Nos. 1-19 Disputed Material Facts: Nos. 1-19 Materials considered: Notice of Motion and Motion for Summary Judgment/Adjudication; Defendant’s Compendium of Exhibits; Notice of Lodging of Exhibit 3; Notice of Lodging of Exhibit 5; Declaration of April M. Mitchell; Notice of Lodging Motion for Summary Judgment; Notice of Lodging Separate Statement; Declaration of Bryan M. Thomas; Declaration of Michael J. Cody; Defendant’s Request for Judicial Notice; Notice of ERRATA regarding Declaration of April M.

Mitchell; Notice of Lodging Exhibit 6; Plaintiff’s Opposition to Motion; Plaintiff’s Responses to Separate Statement of Undisputed Facts;

RULING 1. Defendant’s Request for Judicial Notice is GRANTED.

2. Defendant’s Evidentiary Objections are all DENIED.

3. Defendant’s Motion for Summary Judgment/Adjudication is DENIED.

4. Movant to give Notice.

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