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1 JOHN L. KORTUM (SBN 148573)
FREEMAN MATHIS & GARY
2 john.kortum@fmglaw.com
1850 Mt. Diablo Blvd., Suite 510
3
Walnut Creek, CA 94596
4 Telephone: (415) 214-0058
Facsimile: (833) 264-2083
5
FREEMAN MATHIS & GARY
6 WILLIAM A. MUNOZ (SBN 191649)
7 bill.munoz@fmglaw.com
1013 Galleria Blvd, Ste 250
8 Roseville, CA 95678-1365
Telephone: 916-272-1423
9
Attorneys for Defendants
10 LEACH & WALKER, APC and DONALD LEACH
11
12 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
13 IN AND FOR THE COUNTY OF MONTEREY
14 JOHN BENNETTS, CASE NO. 21CV000764
15 Plaintiff, [CASE ASSIGNED FOR PRE-TRIAL PURPOSES
TO THE HON. CARRIE M. PANETTA – DEPT.
16 14]
v.
17 DEFENDANTS’ MANDATORY
LEACH & WALKER, APC; and DONALD
18 SETTLEMENT CONFERENCE
LEACH,
STATEMENT
19 Defendants.
Date: March 26, 2024
20 Time: 1:30 pm
Dept: 15
21 Judge: Hon. Thomas W. Wills
22
Action Filed: March 10, 2021
23 Trial Date: April 29, 2024
24
25
26
27
28
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 Plaintiff Dr. John Bennetts (“Dr. Bennetts”) filed an unmeritorious legal malpractice action
2 against Defendants Donald Leach and his law firm Leach & Walker, APC (collectively “Mr.
3 Leach” or “Defendants”) believing that Defendants were required to prepare a discretionary
4 Certificate of Independent Review which would have somehow saved a $10 million donative
5 transfer from his former patient Sharon Damon from challenge by the trustee. The facts of this
6 case and those developed in the underlying probate matter clearly demonstrate otherwise.
7 Moreover, the evidence is clear that Mr. Leach did not breach any duty of care established by
8 statute or case law. Dr. Bennetts’ case is premised on a claim of a duty that is novel and unsettled
9 in law. As such, this claim is not a basis for a claim of legal malpractice under the “judgmental
10 immunity” doctrine, as more fully set forth below.
11 SUMMARY OF THE FACTS
12 Mr. Leach and his firm served as the estate planning attorney for Sharon May Damon (“Ms.
13 Damon”), whose trust contained a $10 million donative transfer to Dr. Bennetts. After Ms. Damon
14 died in 2019, the trustee for her trust, Wells Fargo, filed a court action seeking a determination of
15 the validity of the donative transfer to Dr. Bennetts. A motion for summary adjudication filed by
16 Dr. Bennetts was denied in that action after Wells Fargo introduced extensive evidence of details of
17 the medical care provided by Dr. Bennetts, evidence of a romantic relationship between Dr.
18 Bennetts and Ms. Damon, and evidence that Ms. Damon gave millions of dollars to Dr. Bennetts
19 during her lifetime. Shortly afterwards, Dr. Bennetts and Wells Fargo settled the probate matter
20 without payment of the donative transfer to Dr. Bennetts. In the present case, Dr. Bennetts seeks
21 the $10 million he did not receive from Ms. Damon’s trust from Mr. Leach and his firm. However,
22 Mr. Leach and his firm complied with the standard of care at all times relevant.
23 Under Probate Code § 21380, there is a presumption that a donative transfer in a trust
24 instrument is the product of fraud or undue influence if the transfer is to, among others, a “care
25 custodian” who is providing services, including medical treatment, to a transferor who is a
26 “dependent adult.” This appropriate code provision is to protect a “dependent adult” from being
27 taken advantage of by, among others, a person administering medicine to the “dependent adult.”
28 However, the code does not wholly prevent such a transfer. Rather, it allows the presumption to be
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 rebutted by clear and convincing evidence. Id. § 21380(b). Further, it provides a mechanism by
2 which the presumption is deemed without effect. Probate Code § 21384 excludes from the
3 presumption of fraud or undue influence those donative transfers for which a “Certificate of
4 Independent Review” is obtained from an “independent attorney” who conducts an investigation
5 and declares that “I conclude that the transfers” to the beneficiary “made by the instrument are not
6 the product of fraud or undue influence.”
7 As specifically instructed by Ms. Damon, Mr. Leach originally drafted a Seventh
8 Amendment to Ms. Damon’s trust to include, among many others, both Dr. Bennetts and himself as
9 beneficiaries. Because the code did not permit Mr. Leach to prepare a Certificate of Independent
10 Review due to his own beneficiary status, Mr. Leach counseled Ms. Damon to retain an
11 “independent attorney” to conduct an investigation and, if warranted, to issue a Certificate of
12 Independent Review. Ms. Damon did exactly as counseled. The retained attorney, Sidney Morris,
13 met with Ms. Damon and conducted his investigation. Based on information gleaned, he issued an
14 initial Certificate of Independent Review in March 2012.
15 However, within days of when Mr. Morris issued the Certificate of Independent Review,
16 further information came to his attention about Ms. Damon’s medical condition and drug
17 dependencies. Mr. Morris therefore continued his investigation, including bringing in a second
18 attorney, Chris Campbell, to assist and evaluate. They interviewed Ms. Damon further, Dr.
19 Bennetts, and another of Ms. Damon’s doctors. Ms. Damon signed the Seventh Amendment in
20 September 2013 (the signed version omitted Mr. Leach as a beneficiary at Mr. Leach’s behest).
21 Not long after her signing, and after a further interview with her, Mr. Morris and Ms. Campbell
22 concluded they could not declare that the transfers to Dr. Bennetts “made by the instrument are not
23 the product of fraud or undue influence,” but they did not declare that her choices were the result of
24 undue influence.
25 Without a Certificate Of Independent Review declaring that the gift was not the product of
26 undue influence, and if Ms. Damon was a “dependent adult” and Dr. Bennetts was a “care
27 custodian,” Dr. Bennetts would be subject to the rebuttable presumption that the donative transfer
28 to him in Ms. Damon’s trust document was the product of fraud or undue influence. Dr. Bennetts,
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 of course, had every opportunity to present evidence at trial in the Wells Fargo action that Ms.
2 Damon was not a “dependent adult,” that he was not a “care custodian,” and to rebut the
3 presumption of undue influence with clear and convincing evidence. He apparently chose not to
4 have his day in court and settled for nothing after his motion for summary adjudication was denied.
5 The issues in this case include (a) whether Ms. Damon was a “dependent adult”; (b)
6 whether Dr. Bennetts was a “care custodian” for Ms. Damon; (c) whether Mr. Leach had a duty to
7 counsel Ms. Damon to retain independent counsel for purposes of a Certificate of Independent
8 Review for the Seventh and Eighth Amendments to her trust; (d) whether Mr. Leach counseled Ms.
9 Damon to retain independent counsel to investigate whether her donative transfer to Dr. Bennetts
10 was the result of undue influence (which he did); (e) whether Mr. Leach had a duty to advise Ms.
11 Damon that due to a change in law he himself could provide a Certificate of Independent Review
12 for a donative transfer to a care custodian; (f) whether, assuming that Ms. Damon was a “dependent
13 adult” and Dr. Bennetts was a “care custodian,” whether Mr. Leach himself had a duty to provide a
14 Certificate of Independent Review respecting whether Ms. Damon’s donative transfer to Dr.
15 Bennetts was made without undue influence, even though Ms. Damon had retained other counsel
16 for that purpose; (g) whether Mr. Leach had a duty to counsel Ms. Damon to retain independent
17 counsel for purposes of a Certificate of Independent Review with respect to the Eighth
18 Amendment, which did not make a donative transfer to Dr. Bennetts; (h) whether Dr. Bennetts
19 would have obtained a better result in the underlying Wells Fargo matter, but for any alleged
20 negligence by Mr. Leach (he would not); (i) whether Mr. Leach’s actions are subject to the
21 judgmental immunity defense that relieves a legal practitioner from liability for failing to predict
22 how an unsettled issue of law will be decided in the future (which they are); (j) whether Dr.
23 Bennetts failed to mitigate his damages by failing to pursue his case in the Wells Fargo action after
24 the denial of his motion for summary adjudication.
25 Facts establish that Mr. Leach breached no established duty to Dr. Bennetts. First, he
26 himself could not have issued a Certificate of Independent Review because, at least in the first
27 version of the Seventh Amendment, he was a beneficiary of Ms. Damon’s trust (he deleted himself
28 in the later version). Second, at the time he was a beneficiary to the trust, Mr. Leach advised Ms.
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 Damon to retain an independent attorney to conduct an investigation and issue, if appropriate, a
2 Certificate of Independent Review. Ms. Damon followed Mr. Leach’s counseling and retained an
3 experienced trusts and estates attorney, Mr. Morris, to conduct the investigation (Mr. Morris later
4 brought in Ms. Campbell). Third, Mr. Morris completed his initial investigation and, in about
5 March 2012, issued a Certificate of Independent Review. However, additional information led to
6 further investigation over months and an ultimate conclusion by Mr. Morris and Ms. Campbell that
7 they could not certify that the donative transfer to Dr. Bennetts was “not the product of fraud or
8 undue influence.” Fourth, after Mr. Leach deleted himself from Ms. Damon’s trust, Mr. Leach
9 advised Ms. Damon as a precautionary measure to meet further with the previously retained
10 independent attorneys Mr. Morris and Ms. Campbell for purposes of a Certificate of Independent
11 Review. Fifth, there is no established duty for Mr. Leach to conduct an investigation and issue a
12 Certificate of Independent Review himself when another independent attorney was already on the
13 job; rather, the controlling statute permitted him, but did not require him, to issue a Certificate of
14 Independent Review. Sixth, the Eighth Amendment did not make a donative transfer to Dr.
15 Bennetts so no Certificate of Independent Review was needed for it.
16 Mr. Leach’s actions in this matter were completely upstanding and wholly within the
17 standard of care for a Certified Specialist in estates and trusts law. On the contrary, Dr. Bennetts’
18 theory of the case is apparently (a) that Mr. Leach should have done something prohibited by the
19 code (issue a Certificate of Independent Review when he was named as a beneficiary of the trust
20 instrument); (b) that Mr. Leach should have himself issued a Certificate of Independent Review
21 when his client had already retained an independent attorney for purposes of a Certificate of
22 Independent Review (no duty exists to conduct duplicative efforts nor “forum shop” for a different
23 conclusion); (c) that Mr. Leach should have issued a Certificate of Independent Review when
24 information became known about Ms. Damon’s drug dependency and Dr. Bennetts’ care giving (an
25 independent attorney is charged with making a judgment about whether a Certificate of Review
26 should issue based on facts learned; there is no duty for independent attorney to issue the certificate
27 if the facts do not support it). Dr. Bennetts’ claim is without merit.
28 / / /
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 DISCUSSION
2 A. Elements Of A Cause Of Action For Legal Malpractice
3 Dr. Bennetts’ first and only cause of action against Mr. Leach is for legal malpractice. The
4 elements of a claim for professional negligence are “‘(1) the duty of the professional to use such
5 skill, prudence, and diligence as other members of his profession commonly possess and exercise;
6 (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the
7 resulting injury; and (4) actual loss or damage resulting from the professional’s negligence.’”
8 Osornio v. Weingarten (2004) 124 Cal.App.4th 304. To prevail in this matter, Dr. Bennetts must
9 prove all of these elements.
10 B. Element Of Duty
11 The existence of a duty is a question of law. Osornio, 124 Cal.App.4th at 316. Dr.
12 Bennetts alleges that he was owed a duty by Mr. Leach as follows: “Defendants’ duty extended to
13 Plaintiff because Defendants knew that Plaintiff was Ms. Damon’s care custodian, that Ms. Damon
14 included Plaintiff in her estate plan, that Ms. Damon intended for Plaintiff to benefit from the
15 Defendants’ services, as Ms. Damon signed estate planning documents naming Plaintiff as a
16 beneficiary.” Complaint ¶ 21. It appears that the duties that will be attempted to be proven by Dr.
17 Bennetts are as follows: (a) that Mr. Leach had a duty to advise Ms. Damon that Mr. Leach
18 himself could draft a certificate of independent review for the Seventh Amendment; (b) that Mr.
19 Leach had a duty to prepare himself a certificate of independent review for the Seventh
20 Amendment; (c) that Mr. Leach had a duty to advise Ms. Damon that Mr. Leach himself could
21 draft a certificate of independent review for the Eighth Amendment, which required a certificate
22 because it “ratified” and “confirmed” provisions of the Seventh Amendment unchanged by the
23 Eighth Amendment; (d) that Mr. Leach had a duty to prepare himself a certificate of independent
24 review for the Eighth Amendment, which required a certificate because it “ratified” and
25 “confirmed” provisions of the Seventh Amendment unchanged by the Eighth Amendment.
26 As this matter concerns the issue of a Certificate of Independent Review of a donative
27 transfer contained in a trust instrument, the legal analysis of duty begins with statutory provisions.
28 Probate Code § 21380 creates a presumption that a donative transfer is the product of fraud or
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 undue influence if the transferor was receiving services from the care custodian:
2
(a) A provision of an instrument making a donative transfer to
3 any of the following persons is presumed to be the product of fraud
or undue influence:
4
...
5
(3) A care custodian of a transferor who is a dependent adult,
6
but only if the instrument was executed during the period in which
7 the care custodian provided services to the transferor, or within 90
days before or after that period.
8
...
9
(b) The presumption created by this section is a presumption
10
affecting the burden of proof. The presumption may be rebutted by
11 proving, by clear and convincing evidence, that the donative transfer
was not the product of fraud or undue influence.
12
13 Probate Code § 21362 defines the term “Care custodian” as including person who
14 administers medicine to the “dependent adult”: (a) “Care custodian” means a person who provides
15 health or social services to a dependent adult . . . .” Subsection (b) states: “‘health and social
16 services” means services provided to a dependent adult because of the person's dependent
17 condition, including, but not limited to, the administration of medicine, medical testing, wound
18 care, assistance with hygiene, companionship, housekeeping, shopping, cooking, and assistance
19 with finances.” Dr. Bennetts, as a treating physician, could fall into the category of a “Care
20 custodian” under this provision, but only if Ms. Damon was a “dependent adult.” Probate Code §
21 21366 defines “dependent adult” as a person “unable to provide properly for his or her personal
22 needs for physical health, food, clothing, or shelter” and who due to being of unsound mind as
23 defined in Probate Code § 811, “had difficulty managing his or her own financial resources or
24 resisting fraud or undue influence.” If there is no “dependent adult,” then there is no “care
25 custodian” and the statutory presumption of undue influence does not apply. Probate Code §
26 21380. Evidence will show that Ms. Damon was a functional person able to provide properly for
27 her personal needs, which is an issue Dr. Bennetts never took to trial in the Wells Fargo action.
28 Probate Code § 21384 excludes from the presumption of fraud or undue influence those
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 donative transfers for which a Certificate of Independent Review is obtained from an “independent
2 attorney”:
3 (a) A donative transfer is not subject to Section 21380 if the
instrument is reviewed by an independent attorney who counsels the
4
transferor, out of the presence of any heir or proposed beneficiary,
5 about the nature and consequences of the intended transfer, including
the effect of the intended transfer on the transferor's heirs and on any
6
beneficiary of a prior donative instrument, attempts to determine if
7 the intended transfer is the result of fraud or undue influence, and
signs and delivers to the transferor an original certificate in
8
substantially the following form: . . .
9
10 Section 21384 provides a form for the text content of a Certificate of Independent Review.
11 The form includes a statement that the independent attorney counseled the transferor on the nature
12 and consequences of the transfer, and that “I conclude that the transfers” to the beneficiary “made
13 by the instrument are not the product of fraud or undue influence.”
14 Section 21384, by a 2010 amendment, also provides that an attorney who is also the drafter
15 of the transfer instrument can prepare a Certificate of Independent Review as to transfers to a care
16 custodian, but cannot for any other category of beneficiary: “(c) An attorney who drafts an
17 instrument can review and certify the same instrument pursuant to this section, but only as to a
18 donative transfer to a care custodian. In all other circumstances, an attorney who drafts an
19 instrument may not review and certify the instrument.” By use of the word “can,” this provision is
20 expressly permissive, not mandatory. This provision would have permitted Mr. Leach to prepare a
21 certificate of independent review for the Seventh Amendment’s donative transfer to Dr. Bennetts if
22 one were necessary because Ms. Damon was a “dependent adult,” but does not require that Mr.
23 Leach prepare such certificate.
24 The statutory provisions discussed above create a presumption of fraud or undue influence
25 and provide that a Certificate of Independent Review is a means to avoid such a presumption. The
26 provisions, by their express language, do not state that there is a duty of care on the part of an
27 attorney drafting an instrument to ensure that a Certificate of Independent Review is actually
28 obtained or that the certificate states there was no undue influence. Case law, however, suggests
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 that an attorney performing estate planning services can be expected to counsel his or her client to
2 obtain a Certificate of Independent Review. In Osornio, the court of appeal, considering a matter
3 of first impression, opined that an estate planning attorney has a duty to recommend that a client
4 obtain a Certificate of Independent Review if a transfer is subject to the presumption of fraud or
5 undue influence:
6 An attorney drafting instruments on behalf of the transferor-
client—the dispositive provisions of which include a proposed
7
transfer to a presumptively disqualified person under section
8 21350(a)—must “assist the client in making the transfer in a manner
that does not unduly expose the transfer to attack.” (1 Cal. Estate
9
Planning, supra, § 3.8, p. 106.) We therefore hold that the attorney
10 owes a duty of care: (1) to advise the client that, absent steps taken
under section 21351(b), the subject transfer to the proposed
11
transferee, if challenged, will have a significant likelihood of failing
12 because of the proposed transferee’s presumptive disqualification
under section 21350(a); and (2) to recommend that the client seek
13
independent counsel in an effort to obtain a certificate of independent
14 review provided under section 21351(b). Consistent with the
authorities discussed, ante—including Lucas, Heyer, Garcia, and
15
Bucquet, supra—this duty of care is owed to both the transferor-
16 client and to the prospective transferee.
17 Osornio, 124 Cal.App.4th at 334. The Osornio court was very careful to recognize limits on the
18 duty it created. The court stated that “our holding does not suggest that an attorney must ‘draft
19 litigation-proof legal documents’” and that “[w]e do not imply from our ruling here that that a
20 transferor’s attorney guarantees the success of the client’s intended transfer.” Id. at 335 (citations
21 omitted). The court anticipated that “the attorney might avoid liability if the intended beneficiary is
22 unable to establish that the attorney’s negligence was the cause of the failed transfer (e.g., because
23 it was unlikely that the client could have obtained a certificate of independent review).” Id.
24 In summary, the Osornio court opined that an estate planning attorney has a duty of
25 “making the transfer in a manner that does not unduly expose the transfer to attack” and to counsel
26 the client about the statutory presumption of fraud or undue influence and to “recommend that the
27 client seek independent counsel in an effort to obtain a certificate of independent review.” There is
28 no duty to ensure the client obtain a Certificate of Independent Review, especially when the facts
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 indicate that one should not be rendered, and no duty for the drafting attorney to execute a
2 Certificate of Independent Review himself.
3 Dr. Bennetts argues that the Orsonio decision pre-dates the 2010 amendment that enabled a
4 drafting attorney to prepare a certificate of independent review for a donative transfer to a care
5 custodian and, in light of this amendment, a drafting attorney has the duty to advise his client that
6 he or she could prepare a certificate of independent review and that he or she has a duty to prepare
7 one. This argument has no specific support in law except for the general duty that a drafting
8 attorney must “assist the client in making the transfer in a manner that does not unduly expose the
9 transfer to attack.”
10 B. Element of Breach of Duty
11 The evidence indicates that Mr. Leach did not breach any duty set forth in statute or case
12 law. First, Mr. Leach counseled Ms. Damon to retain independent counsel for purposes of a
13 certificate of independent review for the Seventh Amendment. Ms. Damon did retain independent
14 counsel, Sydney Morris and later also Chris Campbell, two highly regarded probate attorneys in the
15 Monterey area. Mr. Morris met with Ms. Damon in early 2012 and shortly thereafter Mr. Morris
16 issued a certificate of independent review that contained the conclusion that Ms. Damon’s
17 testamentary choices were not due to undue influence or fraud. However, at about the same time
18 he issued the certificate new information arose about Ms. Damon’s medical circumstances,
19 including drug use. She had a hospital stay about the same time and was transferred to a rehab
20 facility. Mr. Morris concluded more information was needed and he brought in a colleague, Ms.
21 Campbell. Together, they interviewed Ms. Damon two more times, reviewed her medical records,
22 and interviewed her doctors, including Dr. Bennetts. In December of 2013, about three months
23 after Ms. Damon executed the Seventh Amendment that made the donative transfer to Dr.
24 Bennetts, Mr. Morris and Ms. Campbell issued a certificate that stated that they were unable to
25 certify that Ms. Damon’s choices were not the product of undue influence or fraud.
26 With respect to any duty owed by Mr. Leach to Dr. Bennetts as to the Seventh Amendment,
27 it is clear that Mr. Leach fulfilled his duty expressly stated in Orsonio to advise his client to retain
28 independent counsel. That the independent counsel could not ultimately certify Ms. Damon’s
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 choices were not the product of undue influence, the Orsonio court fully anticipated such
2 occurrence: “the attorney might avoid liability if the intended beneficiary is unable to establish that
3 the attorney’s negligence was the cause of the failed transfer (e.g., because it was unlikely that the
4 client could have obtained a certificate of independent review).”
5 As Dr. Bennetts’ contention that Mr. Leach had a duty to advise Ms. Damon that he himself
6 was permitted by statute to draft a certificate of independent review himself, such duty is nowhere
7 expressed in statute or case law but is the figment of the imagination and a novel and unsettled
8 contention of law. Indeed, there was no need to advise Ms. Damon that the statute permitted him
9 to prepare a certificate because Mr. Morris and Ms. Campbell were already on that job. Further,
10 the statute permitting Mr. Leach to prepare a certificate of independent review is permissive, not
11 mandatory, and so does not create a duty for Mr. Leach to prepare a certificate himself. Without
12 duty, there is no breach.
13 Second, with respect to the Eighth Amendment, Mr. Leach did not breach any duty because
14 the Eighth Amendment does not make a donative transfer to Dr. Bennetts and does not modify the
15 transfer made in the Seventh Amendment. Rather, the Eighth Amendment “ratifies” and
16 “confirms” the unchanged provisions of the Seventh Amendment. The presumption of undue
17 influence arises from the instrument “making” the transfer: “A provision of an instrument making
18 a donative transfer to any of the following persons is presumed to be the product of fraud or undue
19 influence . . . .” The Eighth Amendment was not “making” any transfer to Dr. Bennetts.
20 Therefore, there was no Orsonio duty respecting a certificate of independent review. The notion
21 that “ratifying” and “confirming” unchanged provisions in a prior instrument triggers a duty to
22 obtain a certificate of independent review is again a novel and unsettled contention of law. Again,
23 without duty, there is no breach.
24 C. Element Of Causation
25 The element of causation in this case is complex. For the element of causality in a legal
26 malpractice case, the test is whether the plaintiff would have had a better result but for the
27 negligence of the defendant attorney. (See Viner v. Sweet (2003) 30 Cal.4th 1232, 1244.) Applied
28 in the present case, the question is: would Dr. Bennetts have obtained a better result if Mr. Leach
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 had counseled Ms. Damon that he could draft a Certificate of Independent Review for the Seventh
2 and Eighth Amendments or had prepared one or both himself? Stated another way, but for Mr.
3 Leach’s alleged negligence in not drafting the Certificate of Independent Review for the Seventh
4 and Eighth Amendments, would Dr. Bennetts have prevailed in the underlying matter filed by
5 trustee Wells Fargo? The clear answer is no.
6 In this case, Dr. Bennetts lost his motion for summary adjudication in the underlying case
7 brought by Wells Fargo that sought instructions from the Probate Court as to whether the donative
8 transfer to Dr. Bennetts should be paid. The Probate Court found that there were disputed issues of
9 material fact and so denied Dr. Bennetts’ motion. After the motion was denied, rather than
10 gathering the necessary evidence to overcome the presumption of undue influence, Dr. Bennetts
11 walked away from the underlying matter. Therefore, any suggestion he would be prevailed in the
12 underlying matter is nothing more than rank speculation, at best, under the facts of this case.
13 Plaintiff assumes that if one or more determinative Certificates of Independent Review had
14 been issued for the 7th and 8th Amendments that concluded that the donative transfer to Dr.
15 Bennetts was not the product of undue influence, Dr. Bennetts would have received $10 million
16 from Ms. Damon’s trust. He further assumes that Wells Fargo would have accepted the Certificate
17 of Independent Review at face value and would not have challenged it. In this hypothetical, the
18 determinative Certificate of Independent Review would have the effect of eliminating the statutory
19 presumption of undue influence. With that presumption eliminated, Wells Fargo would have had
20 the burden of proving its case that the donative transfer to Dr. Bennetts was the product of undue
21 influence. At trial, Wells Fargo would have introduced evidence including: (1) that Dr. Bennetts
22 was Ms. Damon’s primary physician for three decades; (2) that Dr. Bennetts prescribed her
23 medicines; (3) that Dr. Bennetts was having sexual relations with Ms. Damon, which is contrary to
24 medical ethics and law, even though he was married; (4) that Dr. Bennetts asked Ms. Damon for
25 money and received about $5 million during her lifetime; (5) that Dr. Bennetts took Ms. Damon on
26 walks and otherwise crossed the doctor/patient relationship borders; and (6) that Ms. Damon’s drug
27 dependency impacted her ability to function.
28 The critical point here is that Wells Fargo had ample evidence to prove that the donative
12
DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 transfer to Dr. Bennetts was the product of undue influence with or without the presumption under
2 Probate Code § 21380. At trial in the present case, Mr. Leach will put forth the same evidence that
3 was available to Wells Fargo to prove that Ms. Damon’s gift to Dr. Bennetts was the product of
4 undue influence.
5 In the present matter, Dr. Bennetts has the burden of proof by a preponderance of the
6 evidence that Dr. Bennetts would have prevailed over Wells Fargo if there were no presumption of
7 undue influence (due to a determinative Certificate of Independent Review). To prove that he
8 would have prevailed, Dr. Bennetts has to show by a preponderance of the evidence that Wells
9 Fargo would not have been able to prove in the underlying case that the gift to him was the product
10 of undue influence. If Dr. Bennetts introduces evidence that Ms. Damon was a “dependent adult”
11 to prove that a Certificate of Independent Review was necessary to overcome the presumption of
12 undue influence, he is effectively admitting that he was taking advantage of a vulnerable person
13 and undermines his case that there was no undue influence.
14 Either way, he loses. If Ms. Damon was not a dependent adult, then a Certificate of
15 Independent Review is not necessary at all and thus, there is no breach by Mr. Leach. However, if
16 he proves that she was a dependent adult, the overwhelming facts demonstrate the donative transfer
17 was the product of undue influence. Therefore, no malpractice on Mr. Leach’s part.
18 D. Other Affirmative Defenses
19 Mr. Leach has plead in his answer to the Second Amended Complaint various affirmative
20 defenses. First, Dr. Bennetts has “failed to exercise reasonable care to mitigate damages, if any.”
21 Dr. Bennetts abandoned his defense in the Wells Fargo case and did not attempt to obtain the
22 donative transfer from Ms. Damon’s trust. Second, Dr. Bennetts case is based on a novel notion of
23 duty that is unsubstantiated by law and certainly not settled in law. This notion of duty is therefore
24 subject to the doctrine of judgmental immunity as expressed in Davis v. Damrell (1981) 119
25 Cal.App.3d 883. That case states: “Under the venerable error-in-judgment rule, if an attorney
26 acting in good faith exercises an honest and informed discretion in providing professional advice,
27 the failure to anticipate correctly the resolution of an unsettled legal principle does not constitute
28 culpable conduct. To require the attorney to further advise a client of the uncertainty in the law
13
DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 would render the exercise of such professional judgment meaningless.” Id. at 889. See also Blanks
2 v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336.
3 E. Damages And Settlement Offers
4 Dr. Bennetts seeks as damages the amount he would have received from Ms. Damon’s trust
5 if the court in the Wells Fargo action had approved that donative transfer. The amount of the
6 specific donative transfer was $10 million. Dr. Bennetts was also to receive some percentage of the
7 residue. However, Dr. Bennetts donative transfer would have been reduced by a substantial
8 percentage by estate taxes, and so his damages are a far lesser amount.
9 Dr. Bennetts made a statutory offer for policy limits (the residue of a wasting $1 million
10 policy). Defendants responded with a statutory offer for $75,001. Dr. Bennetts has recently
11 counter-offered for $275,000. Defendants will be making another statutory offer for $100,000
12 prior to the mandatory settlement conference.
13 G. Conclusion
14 It is nearly impossible for Dr. Bennetts to win this case at trial and, if he does, the appellate
15 issues regarding duty will not likely by resolved in his favor. Mr. Leach has offered nuisance value
16 in effort to resolve this unmeritorious matter without trial.
17 Dated: March 20, 2024 FREEMAN MATHIS & GARY, LLP
18
By:
19
JOHN L. KORTUM
20 Attorneys for Defendants LEACH &
WALKER, APC and DONALD LEACH
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DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
1 PROOF OF SERVICE
2 I declare that I am employed in the City and County of San Francisco, State of California. I
am over the age of eighteen years at the time of service and not a party to the within cause. My
3 employment address is 550 South Hope Street, Suite 2200, Los Angeles, CA 90071.
1 4 On March 20, 2024, I served
PROOF OFcopies of the attached document(s) entitled:
SERVICE
2 DEFENDANTS’
5I am employed in the CountyMANDATORY SETTLEMENT
of Los Angeles, State of California. CONFERENCE
I am over the age ofSTATEMENT
18
and not a party to the within action. My business address is 550 South Hope Street, Suite 2200,
6 on the
3 Los Angeles, interested
California parties in this action, by placing a true and correct copy thereof enclosed in a sealed
90071-2627.
envelope, addressed as follows:
4 7On June 28, 2022, I served the within document(s) described as:
Marc A. Eisenhart Attorneys for Plaintiff
5 8NOTICE OF RULING
James ON DEFENDANT ABIGAIL PETRAJOHN
L. Dawson GUGLER’S EX PARTE
BENNETTS
APPLICATION TO CONTINUE
Steven D. McLellan TRIAL AND RELATED DATES
6 9
Claireparties
on the interested A. Melehani
in this action as stated on the attached mailing list.
7 10 GATES EISENHART DAWSON
Peter R. diDonato
490 Calle Principal
8 11diDonato Law Center CA 93940
Monterey,
28494 Westinghouse Place, Suite 305
Telephone: (831) 264-7802
9 12Valencia, CA 91355-0935
Facsimile: (831) 324-4119
Tel 661/255-7500; Fax 661/255-7557
10 Email: mae@gedlaw.com; jld@gedlaw.com;
Email; peter@didonatolegal.com
13
sdm@gedlaw.com; cam@gedlaw.com;
11 Attorney for Plaintiff,sharlene@gedlaw.com;
Shenikwa Anderson
14
12 cindy@gedlaw.com
X 15(BY MAIL) By placing a true copy of the foregoing document(s) in a sealed envelope
13
addressed as set forth on the attached mailing list. I placed each such envelope for
16collection andBY U.S.following
mailing MAIL: ordinary
I placedbusiness
such envelope,
practices.addressed as above
I am readily familiarbywith
first-class
this mail,
14 postage prepaid, for collection and mailing at my business address
Firm's practice for collection and processing of correspondence for mailing. Under that following our
ordinary business practices. I am readily familiar with our ordinary
17practice, the correspondence would be deposited with the United States Postal Service on business course
15 that same day,ofwith
collection and processing
postage thereon of correspondence
fully prepaid for mailingin with
at Los Angeles, California, the U.S. Postal
the ordinary
Service. In the ordinary course of business on the same day
18course of business. I am aware that on motion of the party served, service is presumedthat correspondence is
16 placed for collection and mailing, it is deposited with the U.S.
invalid if postal cancellation date or postage meter date is more than one day after date ofPostal Service for
delivery
19deposit for mailing to the addressee.
in affidavit.
17
X 20(BY E-MAIL)BY
By E-MAIL
transmittingOR ELECTRONIC
a true TRANSMISSION:
copy of the foregoing I caused a copy of the
document(s) from
18 slovos@fmglaw.com to the
documents toe-mail addresses
be sent set forth
from e-mail above.slovos@fmglaw.com to the persons at
address
21 the email addresses listed in the Service List.
19
20
22I declare underSTATE: I declare under penalty of perjury under the laws of the State of
penalty ofthat
perjury under the lawsand
of the State of California that the
California the above is true correct.
foregoing is true and correct.
21 23
Executed on Executed
June 28,on March
2022, 20,Angeles,
at Los 2024, atCalifornia.
Los Angeles, California.
22 24
23 25
Sophia Lovos-Castaneda
24 26 (Type or print name) (Signature)
Sophia Lovos-Castaneda
25 27
26 28
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Mathis
LLP
at Law 28 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT
Preview
1 JOHN L. KORTUM (SBN 148573) FREEMAN MATHIS & GARY 2 john.kortum@fmglaw.com 1850 Mt. Diablo Blvd., Suite 510 3 Walnut Creek, CA 94596 4 Telephone: (415) 214-0058 Facsimile: (833) 264-2083 5 FREEMAN MATHIS & GARY 6 WILLIAM A. MUNOZ (SBN 191649) 7 bill.munoz@fmglaw.com 1013 Galleria Blvd, Ste 250 8 Roseville, CA 95678-1365 Telephone: 916-272-1423 9 Attorneys for Defendants 10 LEACH & WALKER, APC and DONALD LEACH 11 12 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 13 IN AND FOR THE COUNTY OF MONTEREY 14 JOHN BENNETTS, CASE NO. 21CV000764 15 Plaintiff, [CASE ASSIGNED FOR PRE-TRIAL PURPOSES TO THE HON. CARRIE M. PANETTA – DEPT. 16 14] v. 17 DEFENDANTS’ MANDATORY LEACH & WALKER, APC; and DONALD 18 SETTLEMENT CONFERENCE LEACH, STATEMENT 19 Defendants. Date: March 26, 2024 20 Time: 1:30 pm Dept: 15 21 Judge: Hon. Thomas W. Wills 22 Action Filed: March 10, 2021 23 Trial Date: April 29, 2024 24 25 26 27 28 1 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 Plaintiff Dr. John Bennetts (“Dr. Bennetts”) filed an unmeritorious legal malpractice action 2 against Defendants Donald Leach and his law firm Leach & Walker, APC (collectively “Mr. 3 Leach” or “Defendants”) believing that Defendants were required to prepare a discretionary 4 Certificate of Independent Review which would have somehow saved a $10 million donative 5 transfer from his former patient Sharon Damon from challenge by the trustee. The facts of this 6 case and those developed in the underlying probate matter clearly demonstrate otherwise. 7 Moreover, the evidence is clear that Mr. Leach did not breach any duty of care established by 8 statute or case law. Dr. Bennetts’ case is premised on a claim of a duty that is novel and unsettled 9 in law. As such, this claim is not a basis for a claim of legal malpractice under the “judgmental 10 immunity” doctrine, as more fully set forth below. 11 SUMMARY OF THE FACTS 12 Mr. Leach and his firm served as the estate planning attorney for Sharon May Damon (“Ms. 13 Damon”), whose trust contained a $10 million donative transfer to Dr. Bennetts. After Ms. Damon 14 died in 2019, the trustee for her trust, Wells Fargo, filed a court action seeking a determination of 15 the validity of the donative transfer to Dr. Bennetts. A motion for summary adjudication filed by 16 Dr. Bennetts was denied in that action after Wells Fargo introduced extensive evidence of details of 17 the medical care provided by Dr. Bennetts, evidence of a romantic relationship between Dr. 18 Bennetts and Ms. Damon, and evidence that Ms. Damon gave millions of dollars to Dr. Bennetts 19 during her lifetime. Shortly afterwards, Dr. Bennetts and Wells Fargo settled the probate matter 20 without payment of the donative transfer to Dr. Bennetts. In the present case, Dr. Bennetts seeks 21 the $10 million he did not receive from Ms. Damon’s trust from Mr. Leach and his firm. However, 22 Mr. Leach and his firm complied with the standard of care at all times relevant. 23 Under Probate Code § 21380, there is a presumption that a donative transfer in a trust 24 instrument is the product of fraud or undue influence if the transfer is to, among others, a “care 25 custodian” who is providing services, including medical treatment, to a transferor who is a 26 “dependent adult.” This appropriate code provision is to protect a “dependent adult” from being 27 taken advantage of by, among others, a person administering medicine to the “dependent adult.” 28 However, the code does not wholly prevent such a transfer. Rather, it allows the presumption to be 2 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 rebutted by clear and convincing evidence. Id. § 21380(b). Further, it provides a mechanism by 2 which the presumption is deemed without effect. Probate Code § 21384 excludes from the 3 presumption of fraud or undue influence those donative transfers for which a “Certificate of 4 Independent Review” is obtained from an “independent attorney” who conducts an investigation 5 and declares that “I conclude that the transfers” to the beneficiary “made by the instrument are not 6 the product of fraud or undue influence.” 7 As specifically instructed by Ms. Damon, Mr. Leach originally drafted a Seventh 8 Amendment to Ms. Damon’s trust to include, among many others, both Dr. Bennetts and himself as 9 beneficiaries. Because the code did not permit Mr. Leach to prepare a Certificate of Independent 10 Review due to his own beneficiary status, Mr. Leach counseled Ms. Damon to retain an 11 “independent attorney” to conduct an investigation and, if warranted, to issue a Certificate of 12 Independent Review. Ms. Damon did exactly as counseled. The retained attorney, Sidney Morris, 13 met with Ms. Damon and conducted his investigation. Based on information gleaned, he issued an 14 initial Certificate of Independent Review in March 2012. 15 However, within days of when Mr. Morris issued the Certificate of Independent Review, 16 further information came to his attention about Ms. Damon’s medical condition and drug 17 dependencies. Mr. Morris therefore continued his investigation, including bringing in a second 18 attorney, Chris Campbell, to assist and evaluate. They interviewed Ms. Damon further, Dr. 19 Bennetts, and another of Ms. Damon’s doctors. Ms. Damon signed the Seventh Amendment in 20 September 2013 (the signed version omitted Mr. Leach as a beneficiary at Mr. Leach’s behest). 21 Not long after her signing, and after a further interview with her, Mr. Morris and Ms. Campbell 22 concluded they could not declare that the transfers to Dr. Bennetts “made by the instrument are not 23 the product of fraud or undue influence,” but they did not declare that her choices were the result of 24 undue influence. 25 Without a Certificate Of Independent Review declaring that the gift was not the product of 26 undue influence, and if Ms. Damon was a “dependent adult” and Dr. Bennetts was a “care 27 custodian,” Dr. Bennetts would be subject to the rebuttable presumption that the donative transfer 28 to him in Ms. Damon’s trust document was the product of fraud or undue influence. Dr. Bennetts, 3 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 of course, had every opportunity to present evidence at trial in the Wells Fargo action that Ms. 2 Damon was not a “dependent adult,” that he was not a “care custodian,” and to rebut the 3 presumption of undue influence with clear and convincing evidence. He apparently chose not to 4 have his day in court and settled for nothing after his motion for summary adjudication was denied. 5 The issues in this case include (a) whether Ms. Damon was a “dependent adult”; (b) 6 whether Dr. Bennetts was a “care custodian” for Ms. Damon; (c) whether Mr. Leach had a duty to 7 counsel Ms. Damon to retain independent counsel for purposes of a Certificate of Independent 8 Review for the Seventh and Eighth Amendments to her trust; (d) whether Mr. Leach counseled Ms. 9 Damon to retain independent counsel to investigate whether her donative transfer to Dr. Bennetts 10 was the result of undue influence (which he did); (e) whether Mr. Leach had a duty to advise Ms. 11 Damon that due to a change in law he himself could provide a Certificate of Independent Review 12 for a donative transfer to a care custodian; (f) whether, assuming that Ms. Damon was a “dependent 13 adult” and Dr. Bennetts was a “care custodian,” whether Mr. Leach himself had a duty to provide a 14 Certificate of Independent Review respecting whether Ms. Damon’s donative transfer to Dr. 15 Bennetts was made without undue influence, even though Ms. Damon had retained other counsel 16 for that purpose; (g) whether Mr. Leach had a duty to counsel Ms. Damon to retain independent 17 counsel for purposes of a Certificate of Independent Review with respect to the Eighth 18 Amendment, which did not make a donative transfer to Dr. Bennetts; (h) whether Dr. Bennetts 19 would have obtained a better result in the underlying Wells Fargo matter, but for any alleged 20 negligence by Mr. Leach (he would not); (i) whether Mr. Leach’s actions are subject to the 21 judgmental immunity defense that relieves a legal practitioner from liability for failing to predict 22 how an unsettled issue of law will be decided in the future (which they are); (j) whether Dr. 23 Bennetts failed to mitigate his damages by failing to pursue his case in the Wells Fargo action after 24 the denial of his motion for summary adjudication. 25 Facts establish that Mr. Leach breached no established duty to Dr. Bennetts. First, he 26 himself could not have issued a Certificate of Independent Review because, at least in the first 27 version of the Seventh Amendment, he was a beneficiary of Ms. Damon’s trust (he deleted himself 28 in the later version). Second, at the time he was a beneficiary to the trust, Mr. Leach advised Ms. 4 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 Damon to retain an independent attorney to conduct an investigation and issue, if appropriate, a 2 Certificate of Independent Review. Ms. Damon followed Mr. Leach’s counseling and retained an 3 experienced trusts and estates attorney, Mr. Morris, to conduct the investigation (Mr. Morris later 4 brought in Ms. Campbell). Third, Mr. Morris completed his initial investigation and, in about 5 March 2012, issued a Certificate of Independent Review. However, additional information led to 6 further investigation over months and an ultimate conclusion by Mr. Morris and Ms. Campbell that 7 they could not certify that the donative transfer to Dr. Bennetts was “not the product of fraud or 8 undue influence.” Fourth, after Mr. Leach deleted himself from Ms. Damon’s trust, Mr. Leach 9 advised Ms. Damon as a precautionary measure to meet further with the previously retained 10 independent attorneys Mr. Morris and Ms. Campbell for purposes of a Certificate of Independent 11 Review. Fifth, there is no established duty for Mr. Leach to conduct an investigation and issue a 12 Certificate of Independent Review himself when another independent attorney was already on the 13 job; rather, the controlling statute permitted him, but did not require him, to issue a Certificate of 14 Independent Review. Sixth, the Eighth Amendment did not make a donative transfer to Dr. 15 Bennetts so no Certificate of Independent Review was needed for it. 16 Mr. Leach’s actions in this matter were completely upstanding and wholly within the 17 standard of care for a Certified Specialist in estates and trusts law. On the contrary, Dr. Bennetts’ 18 theory of the case is apparently (a) that Mr. Leach should have done something prohibited by the 19 code (issue a Certificate of Independent Review when he was named as a beneficiary of the trust 20 instrument); (b) that Mr. Leach should have himself issued a Certificate of Independent Review 21 when his client had already retained an independent attorney for purposes of a Certificate of 22 Independent Review (no duty exists to conduct duplicative efforts nor “forum shop” for a different 23 conclusion); (c) that Mr. Leach should have issued a Certificate of Independent Review when 24 information became known about Ms. Damon’s drug dependency and Dr. Bennetts’ care giving (an 25 independent attorney is charged with making a judgment about whether a Certificate of Review 26 should issue based on facts learned; there is no duty for independent attorney to issue the certificate 27 if the facts do not support it). Dr. Bennetts’ claim is without merit. 28 / / / 5 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 DISCUSSION 2 A. Elements Of A Cause Of Action For Legal Malpractice 3 Dr. Bennetts’ first and only cause of action against Mr. Leach is for legal malpractice. The 4 elements of a claim for professional negligence are “‘(1) the duty of the professional to use such 5 skill, prudence, and diligence as other members of his profession commonly possess and exercise; 6 (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the 7 resulting injury; and (4) actual loss or damage resulting from the professional’s negligence.’” 8 Osornio v. Weingarten (2004) 124 Cal.App.4th 304. To prevail in this matter, Dr. Bennetts must 9 prove all of these elements. 10 B. Element Of Duty 11 The existence of a duty is a question of law. Osornio, 124 Cal.App.4th at 316. Dr. 12 Bennetts alleges that he was owed a duty by Mr. Leach as follows: “Defendants’ duty extended to 13 Plaintiff because Defendants knew that Plaintiff was Ms. Damon’s care custodian, that Ms. Damon 14 included Plaintiff in her estate plan, that Ms. Damon intended for Plaintiff to benefit from the 15 Defendants’ services, as Ms. Damon signed estate planning documents naming Plaintiff as a 16 beneficiary.” Complaint ¶ 21. It appears that the duties that will be attempted to be proven by Dr. 17 Bennetts are as follows: (a) that Mr. Leach had a duty to advise Ms. Damon that Mr. Leach 18 himself could draft a certificate of independent review for the Seventh Amendment; (b) that Mr. 19 Leach had a duty to prepare himself a certificate of independent review for the Seventh 20 Amendment; (c) that Mr. Leach had a duty to advise Ms. Damon that Mr. Leach himself could 21 draft a certificate of independent review for the Eighth Amendment, which required a certificate 22 because it “ratified” and “confirmed” provisions of the Seventh Amendment unchanged by the 23 Eighth Amendment; (d) that Mr. Leach had a duty to prepare himself a certificate of independent 24 review for the Eighth Amendment, which required a certificate because it “ratified” and 25 “confirmed” provisions of the Seventh Amendment unchanged by the Eighth Amendment. 26 As this matter concerns the issue of a Certificate of Independent Review of a donative 27 transfer contained in a trust instrument, the legal analysis of duty begins with statutory provisions. 28 Probate Code § 21380 creates a presumption that a donative transfer is the product of fraud or 6 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 undue influence if the transferor was receiving services from the care custodian: 2 (a) A provision of an instrument making a donative transfer to 3 any of the following persons is presumed to be the product of fraud or undue influence: 4 ... 5 (3) A care custodian of a transferor who is a dependent adult, 6 but only if the instrument was executed during the period in which 7 the care custodian provided services to the transferor, or within 90 days before or after that period. 8 ... 9 (b) The presumption created by this section is a presumption 10 affecting the burden of proof. The presumption may be rebutted by 11 proving, by clear and convincing evidence, that the donative transfer was not the product of fraud or undue influence. 12 13 Probate Code § 21362 defines the term “Care custodian” as including person who 14 administers medicine to the “dependent adult”: (a) “Care custodian” means a person who provides 15 health or social services to a dependent adult . . . .” Subsection (b) states: “‘health and social 16 services” means services provided to a dependent adult because of the person's dependent 17 condition, including, but not limited to, the administration of medicine, medical testing, wound 18 care, assistance with hygiene, companionship, housekeeping, shopping, cooking, and assistance 19 with finances.” Dr. Bennetts, as a treating physician, could fall into the category of a “Care 20 custodian” under this provision, but only if Ms. Damon was a “dependent adult.” Probate Code § 21 21366 defines “dependent adult” as a person “unable to provide properly for his or her personal 22 needs for physical health, food, clothing, or shelter” and who due to being of unsound mind as 23 defined in Probate Code § 811, “had difficulty managing his or her own financial resources or 24 resisting fraud or undue influence.” If there is no “dependent adult,” then there is no “care 25 custodian” and the statutory presumption of undue influence does not apply. Probate Code § 26 21380. Evidence will show that Ms. Damon was a functional person able to provide properly for 27 her personal needs, which is an issue Dr. Bennetts never took to trial in the Wells Fargo action. 28 Probate Code § 21384 excludes from the presumption of fraud or undue influence those 7 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 donative transfers for which a Certificate of Independent Review is obtained from an “independent 2 attorney”: 3 (a) A donative transfer is not subject to Section 21380 if the instrument is reviewed by an independent attorney who counsels the 4 transferor, out of the presence of any heir or proposed beneficiary, 5 about the nature and consequences of the intended transfer, including the effect of the intended transfer on the transferor's heirs and on any 6 beneficiary of a prior donative instrument, attempts to determine if 7 the intended transfer is the result of fraud or undue influence, and signs and delivers to the transferor an original certificate in 8 substantially the following form: . . . 9 10 Section 21384 provides a form for the text content of a Certificate of Independent Review. 11 The form includes a statement that the independent attorney counseled the transferor on the nature 12 and consequences of the transfer, and that “I conclude that the transfers” to the beneficiary “made 13 by the instrument are not the product of fraud or undue influence.” 14 Section 21384, by a 2010 amendment, also provides that an attorney who is also the drafter 15 of the transfer instrument can prepare a Certificate of Independent Review as to transfers to a care 16 custodian, but cannot for any other category of beneficiary: “(c) An attorney who drafts an 17 instrument can review and certify the same instrument pursuant to this section, but only as to a 18 donative transfer to a care custodian. In all other circumstances, an attorney who drafts an 19 instrument may not review and certify the instrument.” By use of the word “can,” this provision is 20 expressly permissive, not mandatory. This provision would have permitted Mr. Leach to prepare a 21 certificate of independent review for the Seventh Amendment’s donative transfer to Dr. Bennetts if 22 one were necessary because Ms. Damon was a “dependent adult,” but does not require that Mr. 23 Leach prepare such certificate. 24 The statutory provisions discussed above create a presumption of fraud or undue influence 25 and provide that a Certificate of Independent Review is a means to avoid such a presumption. The 26 provisions, by their express language, do not state that there is a duty of care on the part of an 27 attorney drafting an instrument to ensure that a Certificate of Independent Review is actually 28 obtained or that the certificate states there was no undue influence. Case law, however, suggests 8 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 that an attorney performing estate planning services can be expected to counsel his or her client to 2 obtain a Certificate of Independent Review. In Osornio, the court of appeal, considering a matter 3 of first impression, opined that an estate planning attorney has a duty to recommend that a client 4 obtain a Certificate of Independent Review if a transfer is subject to the presumption of fraud or 5 undue influence: 6 An attorney drafting instruments on behalf of the transferor- client—the dispositive provisions of which include a proposed 7 transfer to a presumptively disqualified person under section 8 21350(a)—must “assist the client in making the transfer in a manner that does not unduly expose the transfer to attack.” (1 Cal. Estate 9 Planning, supra, § 3.8, p. 106.) We therefore hold that the attorney 10 owes a duty of care: (1) to advise the client that, absent steps taken under section 21351(b), the subject transfer to the proposed 11 transferee, if challenged, will have a significant likelihood of failing 12 because of the proposed transferee’s presumptive disqualification under section 21350(a); and (2) to recommend that the client seek 13 independent counsel in an effort to obtain a certificate of independent 14 review provided under section 21351(b). Consistent with the authorities discussed, ante—including Lucas, Heyer, Garcia, and 15 Bucquet, supra—this duty of care is owed to both the transferor- 16 client and to the prospective transferee. 17 Osornio, 124 Cal.App.4th at 334. The Osornio court was very careful to recognize limits on the 18 duty it created. The court stated that “our holding does not suggest that an attorney must ‘draft 19 litigation-proof legal documents’” and that “[w]e do not imply from our ruling here that that a 20 transferor’s attorney guarantees the success of the client’s intended transfer.” Id. at 335 (citations 21 omitted). The court anticipated that “the attorney might avoid liability if the intended beneficiary is 22 unable to establish that the attorney’s negligence was the cause of the failed transfer (e.g., because 23 it was unlikely that the client could have obtained a certificate of independent review).” Id. 24 In summary, the Osornio court opined that an estate planning attorney has a duty of 25 “making the transfer in a manner that does not unduly expose the transfer to attack” and to counsel 26 the client about the statutory presumption of fraud or undue influence and to “recommend that the 27 client seek independent counsel in an effort to obtain a certificate of independent review.” There is 28 no duty to ensure the client obtain a Certificate of Independent Review, especially when the facts 9 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 indicate that one should not be rendered, and no duty for the drafting attorney to execute a 2 Certificate of Independent Review himself. 3 Dr. Bennetts argues that the Orsonio decision pre-dates the 2010 amendment that enabled a 4 drafting attorney to prepare a certificate of independent review for a donative transfer to a care 5 custodian and, in light of this amendment, a drafting attorney has the duty to advise his client that 6 he or she could prepare a certificate of independent review and that he or she has a duty to prepare 7 one. This argument has no specific support in law except for the general duty that a drafting 8 attorney must “assist the client in making the transfer in a manner that does not unduly expose the 9 transfer to attack.” 10 B. Element of Breach of Duty 11 The evidence indicates that Mr. Leach did not breach any duty set forth in statute or case 12 law. First, Mr. Leach counseled Ms. Damon to retain independent counsel for purposes of a 13 certificate of independent review for the Seventh Amendment. Ms. Damon did retain independent 14 counsel, Sydney Morris and later also Chris Campbell, two highly regarded probate attorneys in the 15 Monterey area. Mr. Morris met with Ms. Damon in early 2012 and shortly thereafter Mr. Morris 16 issued a certificate of independent review that contained the conclusion that Ms. Damon’s 17 testamentary choices were not due to undue influence or fraud. However, at about the same time 18 he issued the certificate new information arose about Ms. Damon’s medical circumstances, 19 including drug use. She had a hospital stay about the same time and was transferred to a rehab 20 facility. Mr. Morris concluded more information was needed and he brought in a colleague, Ms. 21 Campbell. Together, they interviewed Ms. Damon two more times, reviewed her medical records, 22 and interviewed her doctors, including Dr. Bennetts. In December of 2013, about three months 23 after Ms. Damon executed the Seventh Amendment that made the donative transfer to Dr. 24 Bennetts, Mr. Morris and Ms. Campbell issued a certificate that stated that they were unable to 25 certify that Ms. Damon’s choices were not the product of undue influence or fraud. 26 With respect to any duty owed by Mr. Leach to Dr. Bennetts as to the Seventh Amendment, 27 it is clear that Mr. Leach fulfilled his duty expressly stated in Orsonio to advise his client to retain 28 independent counsel. That the independent counsel could not ultimately certify Ms. Damon’s 10 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 choices were not the product of undue influence, the Orsonio court fully anticipated such 2 occurrence: “the attorney might avoid liability if the intended beneficiary is unable to establish that 3 the attorney’s negligence was the cause of the failed transfer (e.g., because it was unlikely that the 4 client could have obtained a certificate of independent review).” 5 As Dr. Bennetts’ contention that Mr. Leach had a duty to advise Ms. Damon that he himself 6 was permitted by statute to draft a certificate of independent review himself, such duty is nowhere 7 expressed in statute or case law but is the figment of the imagination and a novel and unsettled 8 contention of law. Indeed, there was no need to advise Ms. Damon that the statute permitted him 9 to prepare a certificate because Mr. Morris and Ms. Campbell were already on that job. Further, 10 the statute permitting Mr. Leach to prepare a certificate of independent review is permissive, not 11 mandatory, and so does not create a duty for Mr. Leach to prepare a certificate himself. Without 12 duty, there is no breach. 13 Second, with respect to the Eighth Amendment, Mr. Leach did not breach any duty because 14 the Eighth Amendment does not make a donative transfer to Dr. Bennetts and does not modify the 15 transfer made in the Seventh Amendment. Rather, the Eighth Amendment “ratifies” and 16 “confirms” the unchanged provisions of the Seventh Amendment. The presumption of undue 17 influence arises from the instrument “making” the transfer: “A provision of an instrument making 18 a donative transfer to any of the following persons is presumed to be the product of fraud or undue 19 influence . . . .” The Eighth Amendment was not “making” any transfer to Dr. Bennetts. 20 Therefore, there was no Orsonio duty respecting a certificate of independent review. The notion 21 that “ratifying” and “confirming” unchanged provisions in a prior instrument triggers a duty to 22 obtain a certificate of independent review is again a novel and unsettled contention of law. Again, 23 without duty, there is no breach. 24 C. Element Of Causation 25 The element of causation in this case is complex. For the element of causality in a legal 26 malpractice case, the test is whether the plaintiff would have had a better result but for the 27 negligence of the defendant attorney. (See Viner v. Sweet (2003) 30 Cal.4th 1232, 1244.) Applied 28 in the present case, the question is: would Dr. Bennetts have obtained a better result if Mr. Leach 11 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 had counseled Ms. Damon that he could draft a Certificate of Independent Review for the Seventh 2 and Eighth Amendments or had prepared one or both himself? Stated another way, but for Mr. 3 Leach’s alleged negligence in not drafting the Certificate of Independent Review for the Seventh 4 and Eighth Amendments, would Dr. Bennetts have prevailed in the underlying matter filed by 5 trustee Wells Fargo? The clear answer is no. 6 In this case, Dr. Bennetts lost his motion for summary adjudication in the underlying case 7 brought by Wells Fargo that sought instructions from the Probate Court as to whether the donative 8 transfer to Dr. Bennetts should be paid. The Probate Court found that there were disputed issues of 9 material fact and so denied Dr. Bennetts’ motion. After the motion was denied, rather than 10 gathering the necessary evidence to overcome the presumption of undue influence, Dr. Bennetts 11 walked away from the underlying matter. Therefore, any suggestion he would be prevailed in the 12 underlying matter is nothing more than rank speculation, at best, under the facts of this case. 13 Plaintiff assumes that if one or more determinative Certificates of Independent Review had 14 been issued for the 7th and 8th Amendments that concluded that the donative transfer to Dr. 15 Bennetts was not the product of undue influence, Dr. Bennetts would have received $10 million 16 from Ms. Damon’s trust. He further assumes that Wells Fargo would have accepted the Certificate 17 of Independent Review at face value and would not have challenged it. In this hypothetical, the 18 determinative Certificate of Independent Review would have the effect of eliminating the statutory 19 presumption of undue influence. With that presumption eliminated, Wells Fargo would have had 20 the burden of proving its case that the donative transfer to Dr. Bennetts was the product of undue 21 influence. At trial, Wells Fargo would have introduced evidence including: (1) that Dr. Bennetts 22 was Ms. Damon’s primary physician for three decades; (2) that Dr. Bennetts prescribed her 23 medicines; (3) that Dr. Bennetts was having sexual relations with Ms. Damon, which is contrary to 24 medical ethics and law, even though he was married; (4) that Dr. Bennetts asked Ms. Damon for 25 money and received about $5 million during her lifetime; (5) that Dr. Bennetts took Ms. Damon on 26 walks and otherwise crossed the doctor/patient relationship borders; and (6) that Ms. Damon’s drug 27 dependency impacted her ability to function. 28 The critical point here is that Wells Fargo had ample evidence to prove that the donative 12 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 transfer to Dr. Bennetts was the product of undue influence with or without the presumption under 2 Probate Code § 21380. At trial in the present case, Mr. Leach will put forth the same evidence that 3 was available to Wells Fargo to prove that Ms. Damon’s gift to Dr. Bennetts was the product of 4 undue influence. 5 In the present matter, Dr. Bennetts has the burden of proof by a preponderance of the 6 evidence that Dr. Bennetts would have prevailed over Wells Fargo if there were no presumption of 7 undue influence (due to a determinative Certificate of Independent Review). To prove that he 8 would have prevailed, Dr. Bennetts has to show by a preponderance of the evidence that Wells 9 Fargo would not have been able to prove in the underlying case that the gift to him was the product 10 of undue influence. If Dr. Bennetts introduces evidence that Ms. Damon was a “dependent adult” 11 to prove that a Certificate of Independent Review was necessary to overcome the presumption of 12 undue influence, he is effectively admitting that he was taking advantage of a vulnerable person 13 and undermines his case that there was no undue influence. 14 Either way, he loses. If Ms. Damon was not a dependent adult, then a Certificate of 15 Independent Review is not necessary at all and thus, there is no breach by Mr. Leach. However, if 16 he proves that she was a dependent adult, the overwhelming facts demonstrate the donative transfer 17 was the product of undue influence. Therefore, no malpractice on Mr. Leach’s part. 18 D. Other Affirmative Defenses 19 Mr. Leach has plead in his answer to the Second Amended Complaint various affirmative 20 defenses. First, Dr. Bennetts has “failed to exercise reasonable care to mitigate damages, if any.” 21 Dr. Bennetts abandoned his defense in the Wells Fargo case and did not attempt to obtain the 22 donative transfer from Ms. Damon’s trust. Second, Dr. Bennetts case is based on a novel notion of 23 duty that is unsubstantiated by law and certainly not settled in law. This notion of duty is therefore 24 subject to the doctrine of judgmental immunity as expressed in Davis v. Damrell (1981) 119 25 Cal.App.3d 883. That case states: “Under the venerable error-in-judgment rule, if an attorney 26 acting in good faith exercises an honest and informed discretion in providing professional advice, 27 the failure to anticipate correctly the resolution of an unsettled legal principle does not constitute 28 culpable conduct. To require the attorney to further advise a client of the uncertainty in the law 13 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 would render the exercise of such professional judgment meaningless.” Id. at 889. See also Blanks 2 v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336. 3 E. Damages And Settlement Offers 4 Dr. Bennetts seeks as damages the amount he would have received from Ms. Damon’s trust 5 if the court in the Wells Fargo action had approved that donative transfer. The amount of the 6 specific donative transfer was $10 million. Dr. Bennetts was also to receive some percentage of the 7 residue. However, Dr. Bennetts donative transfer would have been reduced by a substantial 8 percentage by estate taxes, and so his damages are a far lesser amount. 9 Dr. Bennetts made a statutory offer for policy limits (the residue of a wasting $1 million 10 policy). Defendants responded with a statutory offer for $75,001. Dr. Bennetts has recently 11 counter-offered for $275,000. Defendants will be making another statutory offer for $100,000 12 prior to the mandatory settlement conference. 13 G. Conclusion 14 It is nearly impossible for Dr. Bennetts to win this case at trial and, if he does, the appellate 15 issues regarding duty will not likely by resolved in his favor. Mr. Leach has offered nuisance value 16 in effort to resolve this unmeritorious matter without trial. 17 Dated: March 20, 2024 FREEMAN MATHIS & GARY, LLP 18 By: 19 JOHN L. KORTUM 20 Attorneys for Defendants LEACH & WALKER, APC and DONALD LEACH 21 22 23 24 25 26 27 28 14 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT 1 PROOF OF SERVICE 2 I declare that I am employed in the City and County of San Francisco, State of California. I am over the age of eighteen years at the time of service and not a party to the within cause. My 3 employment address is 550 South Hope Street, Suite 2200, Los Angeles, CA 90071. 1 4 On March 20, 2024, I served PROOF OFcopies of the attached document(s) entitled: SERVICE 2 DEFENDANTS’ 5I am employed in the CountyMANDATORY SETTLEMENT of Los Angeles, State of California. CONFERENCE I am over the age ofSTATEMENT 18 and not a party to the within action. My business address is 550 South Hope Street, Suite 2200, 6 on the 3 Los Angeles, interested California parties in this action, by placing a true and correct copy thereof enclosed in a sealed 90071-2627. envelope, addressed as follows: 4 7On June 28, 2022, I served the within document(s) described as: Marc A. Eisenhart Attorneys for Plaintiff 5 8NOTICE OF RULING James ON DEFENDANT ABIGAIL PETRAJOHN L. Dawson GUGLER’S EX PARTE BENNETTS APPLICATION TO CONTINUE Steven D. McLellan TRIAL AND RELATED DATES 6 9 Claireparties on the interested A. Melehani in this action as stated on the attached mailing list. 7 10 GATES EISENHART DAWSON Peter R. diDonato 490 Calle Principal 8 11diDonato Law Center CA 93940 Monterey, 28494 Westinghouse Place, Suite 305 Telephone: (831) 264-7802 9 12Valencia, CA 91355-0935 Facsimile: (831) 324-4119 Tel 661/255-7500; Fax 661/255-7557 10 Email: mae@gedlaw.com; jld@gedlaw.com; Email; peter@didonatolegal.com 13 sdm@gedlaw.com; cam@gedlaw.com; 11 Attorney for Plaintiff,sharlene@gedlaw.com; Shenikwa Anderson 14 12 cindy@gedlaw.com X 15(BY MAIL) By placing a true copy of the foregoing document(s) in a sealed envelope 13 addressed as set forth on the attached mailing list. I placed each such envelope for 16collection andBY U.S.following mailing MAIL: ordinary I placedbusiness such envelope, practices.addressed as above I am readily familiarbywith first-class this mail, 14 postage prepaid, for collection and mailing at my business address Firm's practice for collection and processing of correspondence for mailing. Under that following our ordinary business practices. I am readily familiar with our ordinary 17practice, the correspondence would be deposited with the United States Postal Service on business course 15 that same day,ofwith collection and processing postage thereon of correspondence fully prepaid for mailingin with at Los Angeles, California, the U.S. Postal the ordinary Service. In the ordinary course of business on the same day 18course of business. I am aware that on motion of the party served, service is presumedthat correspondence is 16 placed for collection and mailing, it is deposited with the U.S. invalid if postal cancellation date or postage meter date is more than one day after date ofPostal Service for delivery 19deposit for mailing to the addressee. in affidavit. 17 X 20(BY E-MAIL)BY By E-MAIL transmittingOR ELECTRONIC a true TRANSMISSION: copy of the foregoing I caused a copy of the document(s) from 18 slovos@fmglaw.com to the documents toe-mail addresses be sent set forth from e-mail above.slovos@fmglaw.com to the persons at address 21 the email addresses listed in the Service List. 19 20 22I declare underSTATE: I declare under penalty of perjury under the laws of the State of penalty ofthat perjury under the lawsand of the State of California that the California the above is true correct. foregoing is true and correct. 21 23 Executed on Executed June 28,on March 2022, 20,Angeles, at Los 2024, atCalifornia. Los Angeles, California. 22 24 23 25 Sophia Lovos-Castaneda 24 26 (Type or print name) (Signature) Sophia Lovos-Castaneda 25 27 26 28 27 Mathis LLP at Law 28 DEFENDANTS’ MANDATORY SETTLEMENT CONFERENCE STATEMENT