Demurrer in THAU BICH LY VS. MATTHEW MCDONALD OLIVERI ET AL| Trellis.Law

On November 24, 2020 a Exhibit,Appendix was filed involving a dispute between Ly, Thau Bich, and Does 1 To 20 Inclusive, Oliveri Law, Llp, Oliveri, Matthew, Oliveri, Matthew Mcdonald, Oliveri, Meghan E., for PROFESSIONAL NEGLIGENCE in the District Court of San Francisco County.

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1 MATTHEW M. OLIVERI, ESQ., SBN 230486
OLIVERI LAW, LLP
2 1655 N. Main Street, Suite 240
ELECTRONICALLY
Walnut Creek, CA 94596
3 Phone: (925) 553-3371; Fax: (925) 406-0773 F I L E D
Oliverilawllp@outlook.com Superior Court of California,
4 County of San Francisco

Attorneys for DEFENDANTS MATTHEW OLIVERI AND OLIVERI LAW 12/14/2021
5 Clerk of the Court
BY: EDNALEEN ALEGRE

6 Deputy Clerk

7
8 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 SAN FRANCISCO COUNTY
10 THAU BICH LY, individually and as Trustee ) Case No. CGC-20-587957
of the TIEU-LY FAMILY TRUST DATED )
11 )
SEPTEMBER 5, 2017, ) DEFENDANTS’ EXHIBITS IN SUPPORT
12 ) OF DEMURRERS TO FIRST AMENDED
Plaintiff, ) COMPLAINT
13 )
v. ) Hearing Date: JANUARY 19, 2022
14 )
) Time: 9:30am
15 MATTHEW MCDONALD OLIVERI, an ) Department: 302
individual; MEGHAN E. OLIVERI, an ) Honorable Judge Ethan P. Schulman
16 individual; OLIVERI LAW, LLP, a California )
Limited Liability Partnership, and DOES 1 to )
17 )
20 inclusive, )
18 )
Defendants. )
19
20 DEFENDANTS submit the following Exhibits in support of their Demurrer to Plaintiff’s
21 unverified First Amended Complaint:
22 A. September 1, 2021 Order Sustaining Demurrer with Leave to Amend.
23 B. First Amended Complaint in this case.
24 C. Complaint in this case.

25 D. The Summons and Complaint (pleading only) in Case #CGC-19-580268, Ly v. Felix Chu
et. al.
26
Dated: DECEMBER 14, 2021, Respectfully by:
27
28

–1–
DEFENDANTS’ EXHIBITS IN SUPPORT
EXHIBIT A

EXHIBIT A
FILED
San Francisco County Superior Gou

1 MAITHEW M. OLIVERI, ESQ., SBN 230486
OLIVERI LAW, LLP
SEP O1 2021
2 1655 N. Main Street, Suite 240
Walnut Creek, CA 94596
3 Phone: (925) 553-3371; Fax: (925) 406-0773
Oliverilawllp@outlook.com
4
In Pro Per DEFENDANTS MAITHEW OLIVERI AND OLIVERI LAW
5
6
7
8 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 SAN FRANCISCO COUNTY

10 THAU BICH LY, individually and as Trustee ) Case No. CGC-20-587957
6
u S7A/A1JP&7 i+J...
11
oftheTIEU-LYFAMILYTRUSTDATED ~ 1,.ea,/e...
.fa Am.t ti
SEPTEMBER 5, 2017, ) ORDER AFTER BEARING NgaeE ON
12 ) THE DEMURRERS OF DEFENDANTS
Plaintiff, ) MATTHEW MCDONALD OLIVERI AND
13 ) OLIVERILAW,LLP
. )
v.
14
~ Hearing Date: SEPTEMBER 1, 2021
15 MAITHEW MCDONALD OLIVERI, an ) Time: 9:30am
individual; MEGHAN E. OLIVERI, an ) Department: 302
16 individual; OLIVERI LAW, LLP, a California~ Honorable Judge Ethan P. Schulman
Limited Liability Partnership, and DOES 1 to )
17
20 inclusive, )

~
18
Defendants.
19

20 This matter came before the Court pursuant to the Demurrers of Defendants Attorneys
21 Matthew McDonald Oliveri and Oliveri Law, LLP. On August 31, 2021, the Court issued its
22 tentative ruling, which no Party opposed. The tentative ruling is attached as "EXIDBIT A" and

Ord:ri~
t~~
23
ls the Court. .
24 Dated: ~- /
I
, 'J1t(
25
ETHAN P. SCHULMAN
26
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28

-1-
FOAH AFTER DEMURRERS OF DEFENDANTS
1
EXHIBIT A
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28 EXHIBIT A

-2-
FOAH AFTER DEMURRERS OF DEFENDANTS
.1 Defend,ru1ts Matthew Oliveri and Oliveri Law, LLP's demurrer to the complaint is
2 sustained with leave to amend.
3 Plaintiff Thau Bich Ly, who sues individually and as trustee of the Tieu-Ly Family Trust,
4
seeks to state claims against defendants for professional negligence (legal malpractice),
5
breach of fiduciary duty, conversion, elder financial abuse, fraudulent misrepresentation,
6
willful misconduct, breach of the implied covenant of good faith and fair dealing, and
7
unjust enrichment. She alleges that on December 18, 2018, she disbursed $500,000,
8
representing proceeds from the sale of her real estate property in San Francisco, to
9
defendants' trust account for her benefit, and that despite her requests beginning in
10

11 November 2019, defendants have refused to return the funds in question. (Compl. ,r,r 1,

12 11-18.) However, nowhere in the complaint does Plaintiff allege that she entered into an

13 attorney-client relationship with defendants, which is a necessary element of a claim for
14 professional negligence, as well as of related claims arising out of an attorney's
15 performance of professional services. (See Code Civ. Proc.§ 340.6(a) [statute of
16 limitations applies to "[a]n action against an attorney for a wrongful act or omission ...
17
arising in the performance of professional services"]; Lee v. Hanley (2015) 61 Cal.4th
18
1225, 1233, 1236-1237 [holding that section 340.6(a) applies not only to legal
19
malpractice claims, but also to "a broader range of wrongful acts or omissions that might
20
arise during the attorney-client relationship"]; Nichols v. Keller (1993) 15 Cal.App.4th
21
1672, 1684 ["An attorney's duty to his or her client depends on the existence of an
22
23 attorney-client relationship. If that reslationship does not exist, the fiduciary duty to a

24 client does not arise. Except for those situations where an attorney is appointed by the

25 court, the attorney-client relationship is created by some form of contract, express or

26 implied, formal or informal."].) Instead, plaintiff asserts that as her "alleged counsel,"
27 defendants owed her a duty of care. (Compl. ,r 21; see also, e.g., id. ,r 30 ["Plaintiffs
28 alleged attorney"].)

-3-
FOAH AFTER DEMURRERS OF DEFENDANTS
1 However, Exhibit G to the complaint consists of a State Bar complaint in which Plaintiff,
2 who certified its accuracy, stated that she did not hire Defendant Matthew Oliveri, that it
3 was "never true" that Mr. Oliveri "did some work for" her, and that she "never signed a
4
retainer agreement." "[T]o the extent the factual allegations conflict with the content of
5
the exhibits to the complaint, we rely on and accept as true the contents of the exhibits ..
6
.. " (Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.) The court must
7
accept that allegation as true.
8
It is insufficient for Plaintiff to allege claims based on what "Defendants claimed."
9
(Compl. ,r 20.) Rather, "[a] complaint must contain a statement of the facts constituting
10
11 the cause of action in ordinary and concise language. This requirement obligates the

12 plaintiff to allege ultimate facts that, taken as a whole, apprise the defendant of the

13 factual basis of the claim." (Scholes v. Lambirth Trucking Co. (2017) 10 Cal.App.5th
14 590, 598.) The complaint as currently pled fails to satisfy these elementary requirements.
15 While a plaintiff may allege alternative legal conclusions, a plaintiff may not allege
16 inconsistent facts. "While inconsistent [t]heories of recovery are permitted, a pleader
17
cannot blow hot and cold as to the [:f]acts positively stated.... The code requirement is t
18
state the [:f]acts, not theories." (Manti v. Gunari (1970) 5 Cal.App.3d 442, 449.)
19
The Court declines to consider the Chow declaration, which attempts to bring before the
20
Court facts not alleged in the complaint for the apparent purpose of showing that the
21
complaint is not time-barred. A demurrer challenges defects appearing on the face of a
22
pleading, including exhibits attached or to the complaint or incorporated by reference.
23
24 (See Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) It is improper for a moving

25 party to offer extrinsic evidence in support of a demurrer.

26
27 Plaintiff has twenty days leave to amend. The Court notes that if the amended complaint
28 asserts allegations inconsistent with those in the current complaint, "the policy against

-4-
FOAH AFTER DEMURRERS OF DEFENDANTS
1 sham pleading ... requires that the pleader explain the inconsistency." (Owens v. Kings
2 Supermarket (1988) 198 Cal.App.3d 379, 384.)
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-5-
FOAH AFTER DEMURRERS OF DEFENDANTS
EXHIBIT B

EXHIBIT B
1 John Chow, Esq. (SBN 225670)
CCD LAW GROUP, P.C.
2 500 Sutter Street, Suite 300
San Francisco, California 94102
3 Telephone: (415) 398-8308

4 Jaynry W. Mak, Esq. (SBN 221004)
1534 Plaza Lane, #116
5
Burlingame, CA 94010
6 Telephone: (415) 307-9783

7 Attorneys for Plaintiff
THAU BICH LY, Individually and
8 as Trustee of the Tieu-Ly Family
Trust dated September 5, 2017
9
10
SUPERIOR COURT OF THE STATE OF CALIFORNIA
11
FOR THE COUNTY OF SAN FRANCISCO
12
13 CIVIL UNLIMITED JURISDICTION

14 THAU BICH LY, Individually and as Trustee of Case No.: CGC-20-587957
the TIEU-LY FAMILY TRUST DATED
15 SEPTEMBER 5, 2017, FIRST AMENDED COMPLAINT FOR:
16
Plaintiff, 1. PROFESSIONAL NEGLIGENCE
17 (LEGAL MALPRACTICE);
vs. 2. BREACH OF FIDUCIARY DUTY;
18 3. CONVERSION;
MATTHEW MCDONALD OLIVERI, an 4. ELDER FINANCIAL ABUSE;
19
individual; MEGHAN E. OLIVERI, an individual; 5. FRADULENT
20 OLIVERI LAW, LLP, a California limited MISREPRESENTATION;
liability partnership, and DOES 1 to 20 inclusive, 6. WILLFUL MISCONDUCT;
21 7. BREACH OF IMPLIED COVENANT
Defendants. OF GOOD FAITH AND FAIR
22
DEALING;
23 8. UNJUST ENRICHMENT

24
25
I. INTRODUCTION
26
1. This is an action for Professional Negligence (Legal Malpractice), Breach of Fiduciary Duty,
27
Conversion, Elder Financial Abuse, Fraudulent Misrepresentation, Willful Misconduct, Breach
28

First Amended Complaint for Damages
Page 1
1 of Implied Covenant of Good Faith and Fair Dealing, Unjust Enrichment, and other related
2 wrongful acts committed by Defendants MATTHEW MCDONALD OLIVERI, MEGHAN E.
3
OLIVERI and OLIVERI LAW, LLP (hereinafter collectively, jointly and severally, as
4
“Defendants”).
5
6 2. As set forth below, Defendant MATTHEW MCDONALD OLIVERI, an attorney licensed to

7 practice law in the State of California, has failed to disburse $500,000.00 (five hundred thousand

8 dollars) held in the Oliveri Law Trust Account to which Plaintiff THAU BICH LY (hereinafter
9
“Plaintiff”) is legally entitled pursuant to California Rule of Professional Conduct 1.15(d)(7),
10
despite Plaintiff’s repeated written requests.
11
II. THE PARTIES
12
13 A. PLAINTIFF

14 3. Plaintiff THAU BICH LY is an individual whose principal residence is located in the City and
15
County of San Francisco, California. Plaintiff THAU BICH LY was and is Trustee of the Tieu-
16
Ly Family Trust dated September 5, 2017, a California trust.
17
B. DEFENDANTS
18
19 4. Defendant MATTHEW MCDONALD OLIVERI, an individual, is an attorney admitted to

20 practice law in the State of California and is a managing partner of OLIVERI LAW, LLP.
21 5. Defendant MEGHAN E. OLIVERI, an individual, is an attorney admitted to practice law in the
22
State of California and is a managing partner of OLIVERI LAW, LLP.
23
6. Defendant OLIVERI LAW, LLP is vicariously liable for Defendant MATTHEW MCDONALD
24
25 OLIVERI’s legal malpractice and professional misconduct. Defendant OLIVERI LAW, LLP

26 was and is a California Limited Liability Partnership, with its principal place of business at 1655
27 N. Main Street, Suite 240, in Walnut Creek, Contra Costa County, California.
28

First Amended Complaint for Damages
Page 2
1 C. DOE DEFENDANTS
2 7. Plaintiff THAU BICH LY alleges at all times mentioned here, the true names or capacities,
3
whether individual, corporate, associate, or otherwise, of Defendants DOES 1 through 20,
4
inclusive (“DOE Defendants”), are unknown to Plaintiff and therefore Plaintiff sues these DOE
5
6 defendants by such fictitious names. Plaintiff will amend this Complaint to allege their true

7 names and capacities when ascertained.

8 III. JURISDICTION AND VENUE
9
8. Jurisdiction is proper in the Superior Court of the State of California, County of San Francisco
10
pursuant to section 410.10 of the California Code of Civil Procedure because it has general
11
subject matter jurisdiction and no statutory exceptions to jurisdiction exist. The amount in
12
13 controversy exceeds the jurisdictional minimum of this Court.

14 9. This Court has personal jurisdiction over Defendants on the grounds that all Defendants live
15
and/or conduct or transact business in the State of California.
16
10. Venue is proper laid in this Court because the facts and circumstances giving rise to this lawsuit
17
occurred in substantial part in this County.
18
19 IV. STATEMENT OF FACTS

20 11. On or around October 18, 2018, Defendant MATTHEW MCDONALD OLIVERI performed
21 legal services for Plaintiff by drafting a buy-out agreement related to her commercial tenants for
22
the property located at 3370 18th Street, San Francisco, California 94110.
23
12. On December 18, 2018, Plaintiff disbursed $500,000.00 (five hundred thousand dollars),
24
25 representing proceeds from the sale of her real estate property in San Francisco, to Defendants’

26 Oliveri Law Trust Account for the benefit of Plaintiff. The money was transferred from Fidelity
27 National Title Company by wire transfer to Defendant through the Oliveri Law Trust Account
28

First Amended Complaint for Damages
Page 3
1 (Comerica Bank Account Number ending in 2384). Attached hereto as Exhibit A is a true and
2 correct copy of the Disbursement of Proceeds from Fidelity National Title Company.
3
13. On November 16, 2019, Plaintiff sent Defendant MATTHEW MCDONALD OLIVERI a written
4
letter by U.S. Mail and email to request the return of her $500,000.00 held in the trust account by
5
6 November 22, 2019, pursuant to California Rule of Professional Conduct 1.15(d)(7). Attached

7 hereto as Exhibit B is a true and correct copy of this letter.

8 14. On November 18, 2019, Plaintiff received an email from Defendant MATTHEW MCDONALD
9
OLIVERI stating that he is currently in trial, and that he will provide a written response by
10
November 22, 2019. In addition, Defendant MATTHEW MCDONALD OLIVERI stated that
11
Plaintiff was a client of his in 2018, and that he “… did some work for Ms. Ly as part of the sale
12
13 of her building in San Francisco.” Attached hereto as Exhibit C is a true and correct copy of this

14 email.
15
15. On December 10, 2019, after receiving no response from Defendants, Plaintiff sent Defendant
16
MATTHEW MCDONALD OLIVERI another written letter by U.S. Mail and email. Since
17
Defendant MATTHEW MCDONALD OLIVERI stated that Plaintiff was his client, Plaintiff
18
19 requested a copy of: (1) the executed retainer agreement between Plaintiff and Defendants, (2)

20 any and all payments that Plaintiff made to Defendants, (3) Defendants’ statement of legal
21 services rendered on behalf of Plaintiff, and (4) any and all information detailing the actual legal
22
services which were provided to Plaintiff. Additionally, Plaintiff again requested that her
23
$500,000.00 be promptly distributed to her. Attached hereto as Exhibit D is a true and correct
24
25 copy of this letter.

26 16. On December 18, 2019, Defendant MATTHEW MCDONALD OLIVERI sent an email to
27 Plaintiff stating that he put a written response to the December 10, 2019 letter in the mail. On
28
December 19, 2019, Plaintiff responded to Defendant’s email, requesting an email copy of the

First Amended Complaint for Damages
Page 4
1 written response. Plaintiff did not receive any response from Defendants by U.S. Mail or email,
2 until over one year later, on December 1, 2020. Defendants finally provided some of the
3
requested documents on February 10, 2021, after the Complaint in this matter was filed on
4
November 24, 2020. Attached hereto as Exhibit E is a true and correct copy of the above-
5
6 referenced e-mails dated December 18, 2019, and December 19, 2019.

7 17. On February 21, 2020, Plaintiff sent Defendants a written letter by U.S. Mail and email to follow

8 up on a voice message left at Defendants’ office. Plaintiff again requested Defendants return her
9
$500,000.00. This was Plaintiff’s fourth written request for the return of her money. Plaintiff did
10
not receive any response from Defendants by U.S. Mail or email, until over one year later, on
11
December 1, 2020. Defendants finally provided some of the requested documents on February
12
13 10, 2021, after the Complaint in this matter was filed on November 24, 2020. Attached hereto as

14 Exhibit F, is a true and correct copy of the letter from Plaintiff dated February 21, 2020.
15
18. On April 19, 2020, Plaintiff filed an Attorney Misconduct Complaint with the State Bar of
16
California for assistance. Attached hereto as Exhibit G is a true and correct copy of the Attorney
17
Misconduct Complaint with the State Bar of California.
18
19 19. On November 24, 2020, Plaintiff filed her Complaint in order to protect her legal and equitable

20 rights with respect to the sum of $500,000.00 held by Defendants in the Oliveri Law Trust
21 Account that had been deprived from Plaintiff.
22
20. After being served with the Complaint, Defendant MATTHEW MCDONALD OLIVERI finally
23
responded on December 1, 2020. In this letter, Defendant MATTHEW MCDONALD OLIVERI
24
25 claimed that his role was “to serve as the escrow agent for a loan Ms. Ly had agreed to make to

26 Felix Chu and Derek Chu for $500,000.” Attached hereto as Exhibit H is a true and correct copy
27 of this letter.
28

First Amended Complaint for Damages
Page 5
1 21. On February 10, 2021, Defendant MATTHEW MCDONALD OLIVERI provided an Attorney-
2 Client retainer agreement between Plaintiff and Defendants, but did not provide any information
3
related to any payments that Plaintiff made to Defendants, Defendants’ statement of legal
4
services rendered on behalf of Plaintiff, or any information detailing the actual legal services
5
6 which were provided to Plaintiff. To date, Plaintiff still has not received any of these documents.

7 Attached hereto as Exhibit I is a true and correct copy of the e-mail dated February 10, 2021,

8 from Defendant MATTHEW MCDONALD OLIVERI with attachments, including the executed
9
Attorney-Client agreement between Plaintiff and Defendants.
10
22. To date, Defendants have failed to return to Plaintiff the sum of $500,000.00 held by Defendants
11
in the Oliveri Law Trust Account for the benefit of Plaintiff. Plaintiff is informed and believes
12
13 that Defendants have kept the $500,000.00 for their own self gain.

14 V. CAUSES OF ACTION
15
A. FIRST CAUSE OF ACTION
16 Professional Negligence [Legal Malpractice] Against All Defendants

17 23. Plaintiff re-alleges and incorporates Paragraphs 1 through 22, above, as though fully set forth
18 herein.
19
24. Defendant MATTHEW MCDONALD OLIVERI is liable as an attorney for his negligent acts as
20
privity is not essential to determine professional liability against an attorney. The California
21
22 Supreme Court has determined that privity is not essential for a malpractice action and liability

23 would attach to an attorney for his negligent acts as they affected non-clients. Biakanja v. Irving,
24 49 Cal.2d 647, 320 P.2d 16 (1958)
25
25. In Lucas v. Hamm, 56 Cal.2d 583 (1961), cert. denied, 368 U.S. 987 (1962), the court
26
determined that the balancing test in Biakanja should be expanded to attorneys. The court
27
28

First Amended Complaint for Damages
Page 6
1 rejected the argument that expanding attorneys’ liability to non-clients would impose undue
2 burden on the profession and rejected the argument that there would be unlimited liability.
3
26. Here, the six factors that the California Supreme Court considered in Biakania all balance in
4
favor of holding Defendants liable as an attorney for Defendant MATTHEW MCDONALD
5
6 OLIVERI’s negligent acts: (1) the extent to which the transaction was intended to affect the

7 plaintiff; (2) the foreseeability of harm to the plaintiff; (3) the degree of certainty that the

8 plaintiff suffered injury; (4) the closeness of connection between defendant’s conduct and the
9
injury suffered; (5) the moral blame attached to the defendant’s conduct, and (6) the policy of
10
preventing harm.
11
27. Plaintiff is the innocent party who bears to lose $500,000.00 because Defendants are refusing to
12
13 return her money to her.

14 28. Furthermore, a lawyer acting in another capacity, such as an escrow agent is subject to liabilities
15
that applicable law assigns to the capacity. In Virtanen v. O’Connell, 140 Cal.App.4th 688
16
(2006), the court determined that a lawyer can have civil liability to a non-client based on
17
conduct as an escrow holder.
18
19 29. Any lawyer who considers serving as an escrow holder for a client should consider two things.
20
First, a lawyer can obtain effective consent only by providing the client all the information and
21
explanation needed by the client to make an informed decision. Second, a lawyer's duty of
22
23 competence requires advice to the client about the reasonably foreseeable adverse

24 consequences of the arrangement, and of reasonably available alternatives. See Considine Co. v.
25 Shadle, Hunt & Hagar, 187 Cal.App.3d 760, 765 (1986) and L.A. County Bar Formal Op. 520
26
(2007).
27
28

First Amended Complaint for Damages
Page 7
1 30. “An escrow holder is the agent of all the parties to the escrow at all times prior to performance
2 of the conditions of the escrow; bears a fiduciary relationship to each of them; and owes an
3
obligation to each measured by an application of the ordinary principles of agency.” Id. at 702-
4
03 (internal quotes and cites omitted). This is accepted as a well-settled doctrine. See, e.g., Gulf
5
6 Insurance Co. v. First Bank, 2008 U.S. Dist. LEXIS 53563, at *10 (E.D. Cal. June 4, 2008);

7 Guzzetta v. State Bar, 43 Cal.3d 962, 979 (1987); and Fla. Bar v. Toothaker, 477 So. 2d 551, 552

8 (Fla. 1985).
9
31. Defendant MATTHEW MCDONALD OLIVERI was acting both as counsel and as escrow agent
10
11 for one party (Derek Chu). Defendant MATTHEW MCDONALD OLIVERI must put any

12 fiduciary responsibilities he owes to both parties with regard to the escrow above any fiduciary
13 duty he may owe to his own client Derek Chu with regard to the underlying deal.
14
32. Here, Defendant MATTHEW MCDONALD OLIVERI owed Plaintiff a fiduciary duty to act in
15
her best interests, to advise her of the consequences of signing documents, and to notify Plaintiff
16
17 of Derek Chu’s fraudulent activities. Defendant MATTHEW MCDONALD OLIVERI was

18 negligent and did none of these. Instead, he assisted Derek Chu in defrauding Plaintiff out of her
19 San Francisco property. In addition, he has not returned Plaintiff’s $500,000.00 which was
20
deposited into Defendants’ trust account.
21
33. Defendant’s professional negligence was a substantial factor in plaintiff’s damages.
22
23 34. Defendant MATTHEW MCDONALD OLIVERI was aware of the duties of an escrow holder
24
before agreeing to act as one. When an attorney faces conflicting demands from his or her own
25
client and another party to the escrow, the attorney cannot favor his or her own client and
26
completely disregard the rights of the other party, to whom he or she owes a duty as an escrow
27
28 holder. Virtanen, 40 Cal. App 4th at 706. Here, Defendant Matthew Oliveri had a long-standing

First Amended Complaint for Damages
Page 8
1 relationship with Derek Chu and a new attorney-client relationship with Plaintiff. Defendant
2 Oliveri was negligent in violating his fiduciary duties to Plaintiff.
3
35. The court easily rejected this argument and made the following finding based on well-established
4
5 authority: “An escrow holder is the agent of all the parties to the escrow at all times prior to

6 performance of the conditions of the escrow; bears a fiduciary relationship to each of them; and
7
owes an obligation to each measured by an application of the ordinary principles of
8
agency.”Id. at 702-03 (internal quotes and cites omitted). This is accepted as a well-settled
9
doctrine. See, e.g., Gulf Insurance Co. v. First Bank, 2008 U.S. Dist. LEXIS 53563, at *10 (E.D.
10
11 Cal. June 4, 2008); Guzzetta v. State Bar, 43 Cal.3d 962, 979 (1987); and Fla. Bar v. Toothaker,

12 477 So. 2d 551, 552 (Fla. 1985).
13
36. On November 18, 2019, Defendants confirmed the fact that Plaintiff was their client in 2018 and
14
15 when Defendants stated that they “…did some work for Ms. Ly as part of the sale of her building

16 in San Francisco,” thereby confirming the attorney-client relationship between Plaintiff and
17 Defendants.
18
37. As Plaintiff’s alleged counsel, Defendants owed a duty of care to Plaintiff, requiring them to
19
exercise the knowledge, skill and ability ordinarily exercised by other similarly situated lawyers.
20
21 38. Contrary to that duty, Defendants were professionally negligent in that Defendants breached

22 their fiduciary duties to Plaintiff. Defendants’ failure to do so was professionally negligent.

23 39. Defendants’ negligent acts and omissions failed to meet their duty of care. Defendants’
24
professional negligence was a substantial factor in Plaintiff’s damages. The proper handling of
25
the money held in the trust account by Defendants would have resulted in the return of Plaintiff’s
26
money in a timely manner.
27
28

First Amended Complaint for Damages
Page 9
1 40. As a direct and proximate result of Defendants’ incompetence and professional negligence,
2 Plaintiff has suffered damages including, but not limited to, $500,000.00.
3
B. SECOND CAUSE OF ACTION
4 Breach of Fiduciary Duty Against All Defendants
5
6 41. Plaintiff re-alleges and incorporates Paragraphs 1 through 40, above, as though fully set forth

7 herein.

8 42. Since Defendants were acting as fiduciaries of Plaintiff, and they therefore owed her a duty of
9
care and loyalty. The scope of an attorney's fiduciary obligations is determined as a matter of law
10
based on the California Rules of Professional Conduct, together with other statutes and general
11
principles relating to other fiduciary relationships. These fiduciary duties include duties of care
12
13 and loyalty, an obligation to keep the client informed, and on termination, a duty to promptly

14 release to the client, at the client's request, all client papers, property, and any unearned fees.
15
43. In breach of their fiduciary duties and professional responsibilities to Plaintiff, Defendants
16
committed the following wrongful acts and omissions:
17
a. Failure to return Plaintiff’s telephone calls and respond to Plaintiff’s written
18
19 communications.

20 b. Failure to provide a copy of the retainer agreement between Plaintiff and Defendant, at
21 Plaintiff’s request;
22
c. Failure to provide a copy of any and all payments that Plaintiff made to Defendant, at
23
Plaintiff’s request;
24
25 d. Failure to provide a copy of the Defendant’s statement of legal services rendered on behalf of

26 Plaintiff, at Plaintiff’s request;
27 e. Failure to provide a copy of any and all information on the actual legal services which were
28
provided to Plaintiff, at Plaintiff’s request;

First Amended Complaint for Damages
Page 10
1 f. Failure to promptly refund any part of the fees paid in advance that has not been earned, at
2 Plaintiff’s request; and
3
g. Representing clients with conflicting interests.
4
44. Pursuant to California State Bar Rules of Professional Conduct 3-700(D) and 4-100(B)(4), an
5
6 attorney must keep the client informed, and must release the client file to the client or the client's

7 successor attorney even if the client already has a copy of all or part of the file. Virtually

8 everything in the client file is the client's property. The principle of what constitutes a client's
9
papers and property remains unaffected by the termination of the attorney-client relationship.
10
Defendants breached their fiduciary duties to Plaintiff by refusing to deliver Plaintiff’s client
11
files or any information regarding their alleged representation in order to conceal from Plaintiff
12
13 the full nature and extent of the deficiencies of Defendant’s incompetence.

14 45. Defendants’ actions were contrary to Plaintiff’s best interests and were done in the absence of
15
good faith and with a reckless disregard for Defendants’ fiduciary obligations to Plaintiff.
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46. Defendants also owed a duty to comply with California State Bar Rule of Professional Conduct
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3-700(D)(2) and refund any portion of an advance fee that the attorney has not earned.
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19 Defendants’ fiduciary duties to Plaintiff also included the obligation that Defendants would

20 promptly distribute the return of her $500,000.00 held in Defendants’ trust account for her
21 benefit, at Plaintiff’s request. Defendants breached their fiduciary duties to Plaintiff by
22
unreasonably withholding her money held in the trust account despite Plaintiff’s numerous
23
requests for its return.

Case Info

Judge

Samuel K. Feng Track Judge’s New Case

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Document Filed Date

December 14, 2021

Case Filing Date

November 24, 2020

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Exhibit,Appendix: THAU BICH LY VS. MATTHEW MCDONALD OLIVERI ET AL

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