Gutierrez v. Girardi
125 Cal. Rptr. 3d 210
Cal. Ct. App.2011Background
- Gutierrez sues his former attorneys, G&K, for breach of fiduciary duty and money had and received in connection with the Lockheed Action settlements.
- G&K negotiated and disbursed most of the Lockheed Action settlements, and Gutierrez received multiple settlement checks from G&K.
- Three nonsettling defendants moved for summary judgment against Gutierrez, arguing his action was time-barred by the statute of limitations.
- The trial court granted summary judgment to G&K on causation and damages, relying on Gutierrez’s alleged time-barred claims in the Lockheed Action.
- The court did not address the merits of Gutierrez’s underlying Lockheed Action claims or G&K’s unclean hands defense.
- The Court of Appeal reversed, holding that Gutierrez’s breach of fiduciary duty claim does not require adjudicating the merits of the underlying claims against the settling defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did G&K breach fiduciary duty by misappropriating settlement funds? | Gutierrez asserts misappropriation of settlement proceeds by G&K. | G&K contends Gutierrez cannot prove breach due to lack of a written fee agreement and insufficient evidence. | Gutierrez may prove breach; summary judgment improper. |
| Whether causation/damages can be proved without adjudicating the underlying merits against settling defendants | No trial within a trial is required to prove causation in fiduciary breach. | Under Slovensky/Loube, merits of underlying action must be adjudicated to prove causation. | A trial within a trial is unnecessary; causation damages can be proven without merits of underlying claims. |
| Whether Gutierrez’s money had and received claim is barred by the limitations on the underlying actions | Merits of underlying claims are irrelevant to money had and received. | Gutierrez’s underlying claims were time-barred, so damages cannot be proven. | Merits of underlying claims are irrelevant; money had and received claim survives. |
Key Cases Cited
- Slovensky v. Friedman, 142 Cal.App.4th 1518 (Cal. Ct. App. 2006) (underlying merits not required to prove fiduciary damage when time-barred; trial-within-a-trial discussed)
- Loube v. Loube, 64 Cal.App.4th 421 (Cal. Ct. App. 1998) (trial-within-a-trial in professional negligence/breach of fiduciary cases involving damages from settlements)
- Blanks v. Seyfarth Shaw LLP, 171 Cal.App.4th 336 (Cal. Ct. App. 2009) (expands trial-within-a-trial doctrine in professional negligence contexts)
- Mattco Forge, Inc. v. Arthur Young & Co., 52 Cal.App.4th 820 (Cal. Ct. App. 1997) (describes the scope of trial-within-a-trial and evaluation of damages in malpractice contexts)
- Weiss v. Marcus, 51 Cal.App.3d 590 (Cal. Ct. App. 1975) (general proposition on money had and received as recovery of money wrongfully kept)