MOTION FOR SUMMARY JUDGMENT OR,
IN THE ALTERNATIVE, SUMMARY ADJUDICATION
MP: Defendant Yousef Monadjemi
RP: Plaintiff Alona Sudorzhenko
Defendant’s motion for summary judgment or adjudication is DENIED. A triable issue of material fact exists as to whether Defendant’s alleged breach of contract, breach of fiduciary duty, and professional negligence caused Plaintiff damages.
-Defendant’s request for judicial notice is GRANTED as to exhibits 1, 4, and 5.
-Defendant’s request is DENIED as to exhibits 2 and 3.
-Plaintiff’s request for judicial notice of exhibit A is GRANTED.
-Defendant’s evidentiary objections (1-3) are OVERRULED.
This is a legal malpractice action.
On May 15, 2017, Plaintiff Alona Sudorzhenko retained Defendant Yousef Monadjemi to represent her as her attorney to effectuate and accomplish a buyout of the tenants residing in a unit of property Plaintiff recently purchased (251 Columbia Place, Los Angeles, CA 90026). Plaintiff informed Defendant she purchased the property for rental income purposes and that, if successful, the buyout agreement would result in her achieving income 10 times the amount she was willing to pay Erika Guardado and Dulce Alonzo (“Tenants”) in the buyout. Both parties were aware that the said unit was subject to the Los Angeles Rent Stabilization Ordinance (RSO) and that, to effectuate and accomplish the buyout of said tenants, all the RSO requirements would have to be satisfied. Plaintiff alleges Defendant represented he was familiar and well-versed with the requirements.
On July 10, 2017, Plaintiff and the tenants executed a buyout agreement, which called for the tenants to vacate the unit by July 3, 2018, in exchange for a payment of $25,000. (See Ex. B.)
On September 25, 2017, the City of Los Angeles Housing and Community Investment Department (LAHCID) sent a notice to the tenants and to Plaintiff, stating that the buyout agreement was defective and void because it failed to comply with the RSO requirement for a specific paragraph in bold 12-point language to appear immediately above the tenant’s signature. (See Ex. C.) Defendant allegedly told Plaintiff not to be concerned, because the LAHCID letter was of no real meaning, effect, or significance. Defendant, however, allegedly took no further action.
On November 6, 2017, the tenants notified Plaintiff and LAHCID that they would not proceed with the buyout agreement and would not be vacating said unit. (See Ex. D.) Tenants have made it clear that they are no longer interested in any buyout.
In late 2017, Plaintiff began the process of recovering possession of the rental unit per the Ellis Act, and Tenants moved out of the unit in early 2019.
On August 16, 2018, Plaintiff filed this lawsuit against Defendant for an amount in excess of $250,000, for:
C/A 1: Breach of Contract
C/A 2: Negligence
C/A 3: Breach of Fiduciary Duty
On May 22, 2019, Defendant filed this motion and request for judicial notice.
On August 22, 2019, Plaintiff filed an opposition and request for judicial notice.
On August 30, 2019, Defendant filed a reply and evidentiary objections.
Defendant moves for summary judgment against Plaintiff or, alternatively, summary adjudication on the following issues:
Issue 1: Because Plaintiff cannot prove causation, her breach of contract claim fails.
Issue 2: Because Plaintiff cannot prove causation, her negligence claim fails.
Issue 3: Because Plaintiff cannot prove causation, her breach of fiduciary duty claim fails.
Issue 4: Because Plaintiff cannot prove any damage, her breach of contract claim fails.
Issue 5: Because Plaintiff cannot prove any damage, her negligence claim fails.
Issue 6: Because Plaintiff cannot prove any damage, her breach of fiduciary duty claim fails.
Issue 7: The breach of fiduciary duty claim fails as a matter of law and is duplicative.
Defendant’s evidentiary objections (Nos. 1-3): OVERRULED.
Defendant requests judicial notice of the following:
Ex. 1: July 10, 2017 Buy-Out Agreement signed by Tenants
Ex. 2: Oct. 22, 2017 Email sent by Plaintiff to Tenants
Ex. 3: Oct. 30, 2017 Letter from Dulce Alonso to LA Housing Authority
Ex. 4: Dec. 21, 2017 Docs Dulce Alonso filed with LAHCID
Ex. 5: Dec. 21, 2017 Docs Plaintiff filed with LAHCID
Defendant’s request for judicial notice of Exhibit 1 is GRANTED per Evidence Code section 452(d)(1), ). which allows judicial notice of records of any court of this state, because the exhibit is attached to Plaintiff’s complaint and is thus part of the court’s record. (See Compl., Ex. B.)
Defendant’s request for judicial notice of exhibits 2 and 3 is GRANTED because they are authenticated by the Tenants. (See Dulce Alonso Decl., ¶ 11, Ex. 3; Erika Guardado Decl., ¶ 11, Ex. 3.)
Defendant’s request for Exhibits 4 and 5 are GRANTED because they were purportedly obtained by a public records request and were produced by Plaintiff in discovery. (See Brittany M. Vojak Decl., ¶¶ 3-5,. Exs. 4-5.)
Plaintiff requests judicial notice of a Letter from Los Angeles Housing and Community Investment Department to Alona Sudorzhenko, dated September 25, 2017. (See Pl.’s RJN, Ex. A.) It appears the exhibit Plaintiff requests judicial notice of is identical to the one attached to her complaint. (See Compl., Ex. C.) As a result, the document is part of the court’s record. Plaintiff’s request for judicial notice of the September 25, 2017 letter is GRANTED per Evidence Code section 452(d)(1), which allows judicial notice of records of any court of this state.
A defendant moving for summary judgment must show “that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c(p)(2).) “Summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court, and all inferences reasonably deducible from the evidence, except summary judgment shall not be granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.” (Id., § 437c(c).)
“The defendant may, but need not, present evidence that conclusively negates an element of the plaintiff's cause of action. The defendant may also present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence--as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing. But… the defendant must indeed present evidence.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 855 [italics in original].) The court in Aguilar distilled summary judgment to “a single proposition: If a party moving for summary judgment in any action . . . would prevail at trial without submission of any issue of material fact to a trier of fact for determination, then he should prevail on summary judgment. In such a case . . . the ‘court should grant’ the motion ‘and “avoid a . . . trial’ rendered ‘useless’ by nonsuit or directed verdict or similar device. (Id. at 855.)
As noted in Aguilar, “the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, supra, 25 Cal.4th at 850.) Thus, courts usually follow a three-step analysis: “First, we identify the issues framed by the pleadings . . . . [¶] Secondly, we determine whether the moving party’s showing has established facts which negate the opponent’s claim and justify a judgment in movant’s favor. . . . [¶] When a . . . motion prima facie justifies a judgment, the third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue.” (Ojavan Investors, Inc. v. Cal. Coastal Comm. (1997) 54 Cal.App.4th 373, 385 [citation and footnote omitted].)
The Supreme Court has once again recently confirmed that the purpose of the 1992 and 1993 amendments to the summary judgment statute was “ ‘to liberalize the granting of [summary judgment] motions.’ ” (Perry v. Bakewell Hawthorne, LLC (2017) 2 Cal.5th 536, 542.) It is no longer called a “disfavored” remedy. “Summary judgment is now seen as a ‘particularly suitable means to test the sufficiency’ of the plaintiff’s or defendant’s case.” (Ibid.) However, in determining the existence of a triable issue of material fact, an opposing party’s declarations and other evidence are liberally construed, while those of the moving party strictly construed. (D’Amico v. Bd. of Medical Examiners (1974) 11 Cal.3d 1, 21.)
An attorney may be subject to liability to a former client based on other theories of negligence, breach of contract, and breach of fiduciary duty. Where the injury is suffered by reason of an attorney's professional negligence, the gravamen of the claim is legal malpractice, regardless of whether it is pled in tort or contract. (Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 181; Kracht v. Perrin, Gartland & Doyle (1990) 219 Cal.App.3d 1019, 1022-1023.) Legal malpractice consists of the failure of an attorney to use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake. (Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 180.)
Here, Plaintiff’s breach of contract, negligence, and breach of fiduciary causes of action sound in legal malpractice because the injury allegedly suffered because of Defendant’s professional negligence. (See Compl., pp. 3-5 [alleging Defendant did not provide competent services in the drafting of the buyout agreement and did not perform work as promised].)
To prevail on her claims, Plaintiff must prove the elements for legal malpractice: (1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney's negligence. (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199.)
Defendant moves for summary judgment of Plaintiff’s claims or, alternatively, summary adjudication of Plaintiff’s claims because Plaintiff cannot establish the requisite causation (issues 1-3) or damages (issues 4-6), and Plaintiff’s breach of fiduciary duty claim is negligence at best (issue 7).
Causation exists when it is established “that but for the alleged negligence of the defendant attorney, the plaintiff would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred.” (Viner v. Sweet (2003) 30 Cal.4th 1232, 1241, italics added.) “Because causation is a question of fact for the jury, it ordinarily cannot be resolved on summary judgment. In legal malpractice claims, the absence of causation may be decided on summary judgment ‘only if, under undisputed facts, there is no room for a reasonable difference of opinion.’ ” (Namikas v. Miller (2014) 225 Cal.App.4th 1574, 1583.) The method for proving the element of causation has been likened to a “trial within a trial” or a “case within a case.” (See Viner v. Sweet (2003) 30 Cal.4th 1232, 1240, fn. 4; see also Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 834 [comparing standards of proof in accounting malpractice with those in legal malpractice].) Such approach is “an objective approach to decide what should have been the result in the underlying proceeding or matter.” (Church v. Jamison (2006) 143 Cal.App.4th 1568, 1585.)
The complaint alleges that but for Defendant’s negligence in drafting a defective agreement, the Tenants “who had signed the buyout agreement would have, by now, per that agreement, have vacated the unit and Plaintiff would have the ability to realize the rental income that was her goal and objective when purchasing said property as she had informed [Defendant] when she engaged him for that purpose.” (See Compl., p. 4, ¶ 5.)
Defendant does not dispute that he prepared a non-compliant buyout agreement. Rather, Defendant argues that the content of the July 2017 buyout agreement is entirely irrelevant and not casually related to any of Plaintiff’s claimed damages because Tenants never would have signed or complied with an agreement that allowed Plaintiff to turn around and re-let the unit at a higher rate. In support, Defendant presents the Tenants’ declarations who declare that: (1) to get Tenants to sign the buyout agreement, Plaintiff told the Tenants that she intended to move her mother into one unit and personally live in the other; (2) on October 22, 2017, Plaintiff sent Tenant Guardado an email responding to Tenant’s “question of the future occupancy and inspection of the [property],” which states that Plaintiff “did ask the inspector about owner occupancy ta[x] exception and how would that work if [she] wanted to rent the apartment,” but “did not tell [the inspector] that [she] was renting it, [she] didn’t list it for rent, nor was [she] planning to do so in the nearest future”; (3) after Tenants learned that Plaintiff had lied to them about moving in, Tenants refused to sign a new compliant-buyout agreement; and (4) had the July 2017 agreement been compliant, upon learning of Plaintiff’s true intentions to re-let the apartment after they vacated, Tenants would have refused to move out of the unit and contacted the Housing Department and report Plaintiff for lying to them about the basis for the agreement (See Def.’s Separate Statement [“DSS”] 4-12.)
Defendant’s motion rests entirely on the assertion that Plaintiff informed Tenants that she was recovering possession of a unit for use and occupancy as a primary place of residence under Los Angeles Municipal Code section 151.09(A)(8). However, the buyback agreement’s terms and the submitted evidence demonstrate that a triable issue of fact exists on the issue of causation. First, the October 22, 2017 email Plaintiff sent to Tenants included Plaintiff’s assertion that “[Tenants] do not care about what [Plaintiff is] going to do with the apartment as long as you get 12 months and $25,000.” (See Def.’s RJN, Ex. 2.)
Second, even if Plaintiff made such representations, the buyout agreement includes a general release, as well as specifies that no promises or inducements were made. (See Buyout Agmt., ¶ 14.1 [“The undersigned hereby declare and represent that no promise, inducement or agreement not herein expressed has been made to them or any of her representatives, and that this mutual release contains the entire agreement between (Plaintiff) and (Tenants).”].) Defendant’s argument that the Tenants would not be precluded from voiding or invaliding the buyout agreement based on misrepresentations is speculative.
Third, the buyout agreement is a voluntary agreement that makes no mention of Plaintiff attempting to recover possession under Municipal Code section 151.09, i.e., to use as a primary place of residence. In fact, Defendant points out that, Plaintiff would not be able to remove Tenant Alonso from the apartment for owner-occupancy per Municipal Code section 151.30(1)(a) because Tenant Alonso is over 75-years-old and lived in the unit for more than 10 years. (See Reply, pp. 13-14.)
Fourth, Plaintiff declares that, “[a]s part of the process of the Buyout Agreement [she] was not required to make any other assurances or promises to the tenants other than to agree on how long they could remain in the premises and how much [she] would compensate them for leaving, and as noted, these were both specified in the Buyout Agreement.” (See Pl.’s Decl., ¶ 3.) Plaintiff further states that she “did not make any other promises of any sort to the tenants to induce them to accept the Buyout Agreement.” (See ibid.)
Fifth, the Tenants’ assertions that they would have (1) refused to vacate the unit; (2) reported Plaintiff to the Housing Department; and (3) claimed they were fraudulently induced into signing the July 2017 Agreement are all speculative.
Lastly, Defendant glosses over the fact that Plaintiff successfully removed the Tenants under the Ellis Act, paying the Tenants $20,050.00—an amount less than the $25,000 Plaintiff had offered to pay Tenants in the buyout agreement. (See Pl.’s Decl., ¶ 7.)
In sum, a triable issue of material fact exists as to whether but for Defendant’s failure to draft a compliant buyout agreement, the Tenants would have vacated the property before Plaintiff filed the lawsuit. Defendant’s motion for summary adjudication based on lack of causation (issues 1-3) is thus DENIED.
“To win a legal malpractice action, the plaintiff must prove damages to a legal certainty, not to a mere probability.” (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1528 ; Campbell v. Magana (1960) 184 Cal.App.2d 751, 758 [“(T)he mere probability that a certain event would have happened, upon which a claim for damages is predicated, will not support the claim or furnish the foundation of an action for such damages”].)
Plaintiff’s complaint seeks $250,000 in damages for lost rental income. Defendant argues that such damages cannot be attributed to Defendant’s alleged negligence or breach of contract because: (1) Tenants were not interested in voluntarily vacating the unit—for any price—to allow Plaintiff to turn around and re-let the unit at a higher rate; and (2) the buyout was the only avenue that would have resulted in Plaintiff generating any rental income from the property (the Ellis Act precludes Plaintiff from re-letting the apartment at a higher rate for five years). (See DSS 13.)
As discussed above, a triable issue of material fact exists as to whether the Tenants would have vacated the property if a compliant buyout agreement was executed. Moreover, it is undisputed that the Tenants exercised their right to cancel the buyout agreement, which resulted in Plaintiff having no other alternative but to seek new counsel and proceed by way of the Ellis Act. And Plaintiff presents evidence that Defendant’s failure to prepare a compliant buyout agreement resulted in Plaintiff retaining new counsel and having to remove the Tenants through the Ellis Act. (See Pl.’s Response to Def.’s Separate Statement [“PRSS”] 13; see also RJN Exs. 4-5 [Ellis Act Notices]; see also Pl.’s Decl., ¶¶ 6, 7 [stating she went to another attorney and she successfully filed for Ellis Act, which allows the owner to take the rental unit off the market].)
Based on the evidence presented, a triable issue of material fact exists as to whether Plaintiff incurred $250,000 in damages for lost rental income because Defendant failed to prepare a compliant buyout agreement that would have resulted in the Tenants vacating the premises within a year. Defendant’s motion for summary adjudication based on lack of damages (issues 4-6) is thus DENIED.
“[A] breach of fiduciary duty is a species of tort distinct from a cause of action for professional negligence. The elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.)
Defendant argues Plaintiff cannot allege any facts demonstrating a breach of the duties of loyalty or confidentiality because Defendant never had any contact with Tenants and Defendant was never made aware that Plaintiff made representations to the Tenants regarding owner-occupancy removal. (See DSS 14.) Defendant concludes that the failure to include required language in the buyout agreement is mere negligence at best and is thus insufficient to constitute a breach of fiduciary duty.
However, Defendant fails to address the fact that Plaintiff’s complaint alleges Defendant told Plaintiff to not be concerned with the LAHCID’s letter to the Tenants—that it was of no real meaning, effect, or significance. (See Compl., p. 4, ¶ 3, see also p. 5, ¶ 8.) The complaint further alleges that Defendant took no subsequent action. (See ibid.) Further, Plaintiff presents evidence that Defendant advised Plaintiff that, if the Tenants did not vacate, she should file a lawsuit against them for breach of contract. (See Pl.’s Decl., ¶ 4.) Plaintiff asserts that Defendant told Plaintiff he would represent her in that action for $10,000. (See ibid.)
Based on the evidence presented, a triable issue of material fact exists as to whether Defendant’s conduct amounted to a breach of fiduciary duty owed to Plaintiff. Defendant’s motion for summary adjudication of Plaintiff’s breach of fiduciary duty claim (issue 7) is thus DENIED.