Paul v. Patton
235 Cal. App. 4th 1088
| Cal. Ct. App. | 2015Background
- Gilbert Paul (decedent) retained Attorney Richard Patton in 2011 to amend his 1995 revocable living trust; Patton drafted and the decedent signed the Trust Amendment.
- The Trust Amendment defined "beneficiaries" to include the decedent’s spouse Helen and his four children (the Pauls), and used the term "beneficiaries" in provisions governing distribution of other assets and the marital home.
- After the decedent’s death, successor trustees Stephen and David filed a probate petition to modify the Trust Amendment, alleging it did not reflect the decedent’s intent; Patton admitted the Amendment contained a scrivener’s/drafting error and that the decedent did not intend to give Helen a one-fifth interest in certain separate assets.
- Stephen and David settled the probate action with Helen; the Pauls (the four children) then sued Patton for legal malpractice, alleging the drafting error caused them monetary loss and incurred litigation costs.
- Patton demurred arguing he owed no duty to nonclient beneficiaries; the trial court sustained the demurrer without leave to amend and dismissed. The Court of Appeal reversed and remanded, holding plaintiffs should be given leave to amend to plead a duty as beneficiaries but that successor-trustee standing was not pleaded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney owed a duty of care to nonclient intended beneficiaries (the Pauls) | Patton’s admitted drafting error and the decedent’s executed Amendment show decedent intended to benefit the Pauls, so a duty exists | No duty owed because plaintiffs were nonclients and there was no executed instrument clearly establishing their status as intended beneficiaries (or that such duty extends absent documented testamentary intent) | Reversed: at demurrer stage there is a plausible duty to beneficiaries; plaintiffs get leave to amend to plead duty facts |
| Whether successor trustees (Stephen & David) have standing to sue as successor fiduciaries | Successor trustees may sue for malpractice harming the trust estate | The complaint alleges individual harm to plaintiffs, not injury to the trust; no estate harm pleaded | Affirmed in part: successor-trustee theory fails because plaintiffs did not allege injury to the trust |
| Whether trial court properly sustained demurrer without leave to amend | Plaintiffs argued defects could be cured by amendment and facts support a duty analysis under Biakanja/Lucas factors | Patton argued demurrer was properly sustained as a matter of law | Court held trial court abused discretion as to beneficiary-duty claim and remanded for leave to amend; no leave for successor-trustee theory because facts insufficient |
| Policy concern about expanding attorney liability to nonclients | Plaintiffs: limiting recovery would frustrate preventing future harm and accountability for admitted clerical errors | Patton: broad duty would impose undue burden on lawyers and invite speculative claims by disappointed potential beneficiaries | Court: policy factors do not bar duty here given executed document and attorney admissions; liability expansion not unduly burdensome under these facts |
Key Cases Cited
- Blank v. Kirwan, 39 Cal.3d 311 (demurrer review; treat pleaded facts as true)
- Lucas v. Hamm, 56 Cal.2d 583 (attorney may be liable to intended testamentary beneficiaries)
- Biakanja v. Irving, 49 Cal.2d 647 (factors for imposing duty to nonclients)
- Borissoff v. Taylor & Faust, 33 Cal.4th 523 (successor fiduciaries may sue for malpractice harming the trust)
- Chang v. Lederman, 172 Cal.App.4th 67 (analysis of duty to nonclient beneficiaries and policy concerns)
- Osornio v. Weingarten, 124 Cal.App.4th 304 (beneficiary recovery when signed testamentary document reflects intent)
- Radovich v. Locke-Paddon, 35 Cal.App.4th 946 (no duty where only unsigned draft will exists and intent uncertain)