Simona OSORNIO, Plaintiff and Appellant,
v.
Lawrence WEINGARTEN, as Personal Representative, etc., Defendant and Respondent.
Court of Appeal, Sixth District.
*248 David A. Fulton, Cartwright, Fulton & Adams, Santa Cruz, for Plaintiff and Appellant.
Louis H. Castoria, Debra S. Blum, Wilson, Elser, Moskowitz, Edelman & Dicker, San Francisco, for Defendant and Respondent.
*247 WALSH, J.[*]
In Lucas v. Hamm (1961)
Our case is one of first impression involving a potential extension of Lucas. Simona Osornio, a nonclient, was the named executor and sole beneficiary under a will. Because she was care custodian to the testator, a dependent adult, Osornio was a presumptively disqualified donee under Probate Code section 21350, subdivision (a)(6).[1] Accurately anticipating that a probate court would decide that she could not overcome that presumption by clear and convincing proof, Osornio claimed that the bequest to her failed because of the negligence of Saul Weingarten, the attorney who drafted the will on behalf of the testator.
Though Osornio's allegations are less than clear, her theory of negligence is apparently that Weingarten owed her a duty of care as the testator's intended beneficiary, and that, at the time the will was drawn, Weingarten: (1) failed to advise the testator that her intended beneficiary, Osornio, would be presumptively disqualified unless the testator obtained a certificate of independent review from another attorney, under section 21351, subdivision (b) (hereafter section 21351(b)); and (2) failed to take appropriate measures to ensure that the testator's wishes were carried out by referring her to counsel to obtain such a certificate. The trial court sustained Weingarten's demurrer to the complaint without leave to amend, and Osornio appeals.
We conclude that the complaint, as drafted, did not state a cause of action. We find further, however, that nonclient Osornio could have readily amended the complaint to state a cause of action for professional negligence against attorney Weingarten under Lucas and its progeny. Accordingly, the trial court abused its discretion by sustaining the demurrer without *249 leave to amend, and we reverse the judgment.
FACTS
I. Complaint
The facts recited below are from the allegations made in the complaint. In reviewing the propriety of the trial court's sustaining of the demurrer, we, of course, accept as true the factual allegations properly pleaded in the complaint. (See Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002)
Weingarten was a licensed California attorney practicing law in the County of Monterey.[2] In the early 1990's the testator, Dora Ellis, retained Weingarten to draft a will. On or about September 19, 2001, Ellis requested that Weingarten prepare a new will that would (a) revoke her prior wills and codicils, and (b) name Osornio as the executor and sole beneficiary under Ellis's new will.
The September 19, 2001 will (2001 Will) prepared by Weingarten on behalf of Ellis "failed to include a Certificate of Independent Review as required by California Probate Code Section 21350 et seq." Therefore (the complaint alleges), Weingarten failed to exercise reasonable care in performing legal services for Ellis.
Osornio was the intended sole beneficiary of Ellis, and she would have received the entire value of Ellis's estate had Weingarten exercised reasonable care, skill, and diligence in preparing the 2001 Will. Osornio alleges that, as a direct and proximate result of Weingarten's negligence, she was precluded from receiving the value of the estate under the 2001 Will and was thereby damaged.
II. Other Relevant Facts
There are facts other than those alleged in the complaint that both appear undisputed and are material to our consideration of this appeal. These undisputed facts are disclosed in a written decision after trial in the probate court involving the Ellis estate.[3] That decision was attached to a request for judicial notice filed by Weingarten in support of his demurrer and was properly considered in connection with the demurrer. (See Evid.Code, § 452, subd. (d); Frommhagen v. Board of Supervisors (1987)
Peggy Williams was the beneficiary under Ellis's prior will, dated October 7, 1993 (1993 Will); the prior will contained two codicils dated June 29, 1994, and July 10, 1997, respectively. Ellis died in May 2002. Williams filed a petition to probate the 1993 Will. Osornio objected to the Williams petition and filed a separate petition to probate the 2001 Will. Williams objected to the Osornio petition on the grounds of lack of capacity and undue influence. The dispute proceeded to trial in the probate court in June 2003.
*250 The parties to the probate proceeding stipulated that Osornio "was a care custodian of a dependent adult, Dora Ellis, in September 2001 and that the provisions of Probate Code Section 21350[, subdivision] (a)(6) applied." Similarly, Osornio admitted in her opposition to the demurrer that she was Ellis's care custodian, "thus triggering the provisions of Probate Code Section 21350[, subdivision] (a)(6)." It is further apparent that, at the time Ellis consulted Weingarten in September 2001, he was aware that Osornio was Ellis's care custodian.[4] The probate court concluded after trial in its tentative decision dated August 29, 2003[5] that Osornio had failed to satisfy her burden of establishing by clear and convincing evidence that the transfer of property to Osornio in the 2001 Will was not the product of fraud, menace, duress, or undue influence, as provided in section 21351, subdivision (d) (hereafter section 21351(d)).[6]
PROCEDURAL HISTORY
Osornio filed her complaint on May 20, 2003. Weingarten filed a general and special demurrer to the complaint. Weingarten contended, inter alia, that the complaint (a) failed to state facts sufficient to constitute a cause of action, (b) was uncertain, and (c) contained allegations that were heard and decided previously by the court. Osornio opposed the demurrer. After hearing, on December 3, 2003, the trial court sustained the general demurrer without leave to amend. The court entered a judgment of dismissal nunc pro tunc as of March 1, 2004.
Osornio filed a notice of appeal from the judgment on March 12, 2004. The appeal from the judgment was filed timely (Cal. Rules of Court, rule 2(a)(1)) and is a proper subject for appellate review. (Code Civ. Proc., § 904.1, subd. (a)(1); Castro v. State of California (1977)
DISCUSSION
I. Standard Of Review
A general demurrer is appropriate where the complaint "does not state facts sufficient to constitute a cause of action." (Code Civ. Proc., § 430.10, subd. (e).) There are "long-settled rules" that appellate courts follow in addressing the merits of a challenge to a complaint by demurrer: "`We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint *251 a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court abused its discretion and we reverse; if not, there is no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff. [Citation.]" (Blank v. Kirwan (1985)
A demurrer tests the sufficiency of the complaint as a matter of law; as such, it raises only a question of law. (See Code Civ. Proc., § 589; Schmidt v. Foundation Health (1995)
II. Issues On Appeal
The single issue raised on appeal is whether the court erred in sustaining Weingarten's general demurrer without leave to amend. This order was apparently founded upon the conclusion that Weingarten as a matter of law owed no duty to Osornio, a nonclient.[7] The issue on appeal contains two subquestions: (a) whether the court properly sustained the demurrer because the complaint, as drafted, failed to state a cause of action for professional negligence; and (b) whether the court abused its discretion by refusing Osornio leave to amend i.e., that the court correctly concluded that there was no reasonable possibility that Osornio could amend the complaint to state a viable cause of action.
We first review: sections 21350 and 21351, concerning the presumptive disqualification of certain donees (including care custodians of dependent adults); the elements of a legal malpractice claim; the Supreme Court's decisions in Biakanja v. Irving (1958)
III. Probate Code Sections 21350 And 21351
Section 21350, subdivision (a) (hereafter, section 21350(a)), reads in relevant part: "Except as provided in Section 21351 [governing exceptions], no provision, or provisions, of any instrument shall be valid to make any donative transfer to any of the following: [¶] ... [¶] (6) A care custodian of a dependent adult who is the transferor."[8] A "disqualified person" under the statute "means a person specified in subdivision (a) of Section 21350, but only in cases where Section 21351 does not apply." (§ 21350.5.) Other presumptively disqualified donees under section 21350(a), include: the drafter of the instrument;[9] the drafter's relative, domestic partner, cohabitant, or employee; the drafter's law partner or shareholder; an employee of the law partnership or corporation in which the drafter has an interest; one having a fiduciary relationship with the donor (including a conservator or trustee), who transcribes or causes the instrument to be transcribed; such fiduciary's relative, employee, domestic partner, or cohabitant; and a relative of, domestic partner of, employee of, or a cohabitant with, a care custodian of the donor who is a dependent adult. (§ 21350(a).)
The presumption of invalidity of donative transfers to specified individuals under section 21350(a) including transfers to care custodians of dependent adults does not apply, inter alia, where "[t]he instrument is reviewed by an independent attorney who (1) counsels the client (transferor) about the nature and consequences of the intended transfer, (2) attempts to determine if the intended consequence is the result of fraud, menace, duress, or undue influence, and (3) signs and delivers to the transferor an original certificate ... with a copy delivered to the drafter." (§ 21351(b).)[10] This "Certificate of Independent Review" must state that the attorney: reviewed the instrument; counseled the client/transferor concerning the nature and consequences of the subject transfer of property to the presumptively disqualified person under section 21350; was disassociated from any interest in the transferee; and concluded that the transfer to the presumptively disqualified person was valid because it was "not the product of *253 fraud, menace, duress, or undue influence." (§ 21351(b).)
Presumptively disqualified donees under section 21350(a) even without the transferor having obtained a certificate of independent review under section 21351(b) may rebut this presumption under very limited circumstances, where "[t]he court determines, upon clear and convincing evidence, but not based solely upon the testimony of any person described in subdivision (a) of Section 21350, that the transfer was not the product of fraud, menace, duress, or undue influence." (§ 21351(d), italics added.)[11] This "elevated proof burden" (Rice v. Clark, supra,
The intent of section 21350 was "to prevent unscrupulous persons in fiduciary relationships from obtaining gifts from elderly persons through undue influence or other overbearing behavior. [Citation.]" (Bank of America v. Angel View Crippled Children's Foundation (1999)
As originally enacted in 1993, section 21350(a) did not include care custodians of dependent adults among the class of presumptively disqualified donees. (See former § 21350, added by Stats.1993, ch. 293, § 8, p.2021.) In 1997, the Legislature amended section 21350(a) to include care custodians of dependent adults as presumptively disqualified donees. (See Stats.1997, ch. 724, § 33; see also Conservatorship *254 of Davidson (2003)
IV. Required Elements Of A Professional Negligence Claim
In evaluating the sufficiency of Osornio's complaint, we note preliminarily that there are four essential elements of a professional negligence claim: "(1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional's negligence. [Citations.]" (Budd v. Nixen (1971)
A legal malpractice action is thus composed of the same elements as any other negligence claim, i.e., "duty, breach of duty, proximate cause, and damage. [Citation.]" (Chavez v. Carter (1967)
V. The Biakanja And Lucas Decisions
We start with the undisputed proposition that, in California, "[a]n attorney's liability for professional negligence does not ordinarily extend beyond the client except in limited circumstances." (St. Paul Title Co. v. Meier (1986)
In Biakanja, supra,
In Lucas, supra,
In so concluding, the court utilized the balancing test it enunciated previously in Biakanja to determine whether the attorney defendant owed a duty to the beneficiaries with whom defendant was not in privity. (Lucas, supra,
*256 The court determined that the first factor strongly favored the plaintiffs, since "one of the main purposes which the transaction between defendant and the testator intended to accomplish was to provide for the transfer of property to plaintiffs." (Lucas, supra,
VI. Decisions Subsequent To Lucas
In the near half-century since the Supreme Court decided Lucas, California courts have considered numerous variations of the attorney's potential liability to nonclients. Some instances have involved an attorney's duty of care in the estate planning context, while others have addressed negligence claims by nonclients in other business settings. In order to address fully the parties' respective contentions herein, we first review these California decisions.
A. Estate Planning Cases
In Heyer, supra,
Before addressing the central question before it (i.e., commencement of the statute of limitations), the Heyer court reiterated its holdings in Biakanja and Lucas that permitted, as a matter of policy, intended *257 beneficiaries to recover in the absence of privity with the defendant: "When an attorney undertakes to fulfill the testamentary instructions of his client, he realistically and in fact assumes a relationship not only with the client but also with the client's intended beneficiaries. The attorney's actions and omissions will affect the success of the client's [testamentary] scheme; and thus the possibility of thwarting the testator's wishes immediately becomes foreseeable. Equally foreseeable is the possibility of injury to an intended beneficiary. In some ways, the beneficiary's interests loom greater than those of the client. After the latter's death, a failure in his testamentary scheme works no practical effect except to deprive his intended beneficiaries of the intended bequests ... only the beneficiaries suffer the real loss. We recognized in Lucas that unless the beneficiary could recover against the attorney in such a case, no one could do so and the social policy of preventing future harm would be frustrated." (Heyer, supra,
Similarly, an attorney was held to owe a duty of care to intended beneficiaries to properly advise the testator of the law governing the property he intended to dispose of through his will. (See Garcia, supra,
An estate planning attorney's duty of care to nonclients, under Lucas and Heyer, was extended to trust beneficiaries in Bucquet v. Livingston (1976)
Several cases have rejected unwarranted extensions of Lucas/Heyer in other estate planning contexts. In Ventura County Humane Society v. Holloway (1974)
Likewise, we rejected the malpractice claim of a potential beneficiary identified in an unsigned will. (See Radovich v. Locke-Paddon (1995)
We refused to expand the attorney's duty to nonclients under Lucas/Heyer to a potential beneficiary under an unsigned draft will. (Radovich, supra, 35 Cal.App.4th at pp. 965-966,
In a recent case, the First Appellate District, Division Two, similarly refused to extend an attorney's duty to a nonclient in the estate planning context. (See Moore, supra,
After extensive review of the relevant authorities and discussion of the Biakanja/Lucas factors, the court held that the testator's attorney owed no such duty to the beneficiaries. (Moore, supra,
Weingarten relies heavily on Radovich and Moore in support of his assertion that he owed no duty to Osornio as a matter of law. As we discuss in detail, (see pt. VIII C, post), neither case supports Weingarten's position. In Radovich, plaintiff was merely a potential beneficiary under an unsigned draft will. We rejected his claim against the attorney who drafted the unsigned will, based in large part upon our concern that imposing liability would undermine the attorney's duty of loyalty to the client, (Radovich, supra,
B. Malpractice Cases by Nonclients in Other Settings
Several California decisions have followed Lucas in finding a duty of care owed by the attorney to a nonclient outside of the estate planning context. One appellate court extended Lucas to a nonclient who *260 made a loan to the attorney's client. (See Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976)
In Meighan, supra,
Other cases, however, have rejected attorney negligence claims brought by nonclients. For instance, in Goodman, supra,
The Supreme Court rejected the negligence claim, concluding that the attorney had no relationship with the plaintiffs from which a duty of care arose. (Goodman, supra, 18 Cal.3d at pp. 343-344,
*261 It is against the foregoing backdrop of California decisions concerning questions of the attorney's duty to nonclients that we now address the question on appeal. We first consider whether the complaint, on its face, stated a cause of action for professional negligence. We then discuss whether the court properly denied Osornio leave to amend her complaint.
VII. Sufficiency Of The Osornio Complaint
As discussed above, the four elements of a legal malpractice claim are: "duty, breach of duty, proximate cause, and damage." (Chavez v. Carter, supra,
The complaint alleged that the 2001 Will "failed to include a Certificate of Independent Review as required by California Probate Code Section 21350 et seq." Osornio claimed in the next sentence of the complaint that, "[a]s such, Defendants failed to exercise reasonable care and skill" in representing Ellis. The complaint alleged that Osornio "was the intended sole beneficiary of the Estate of Dora Ellis," and that Osornio would have inherited the entirety of the Ellis estate, but for Weingarten's negligence in preparing the 2001 Will.
We may consider in connection with Weingarten's demurrer "any matter that is judicially noticeable under Evidence Code section 451 or 452. [Citation.]" (Cryolife, Inc. v. Superior Court, supra,
We readily conclude that the complaint failed to allege that Weingarten owed a duty of care to nonclient Osornio. Even assuming, arguendo, that the bare bones allegations of duty are facially sufficient, any claim of duty is directly refuted by sections 21350 and 21351, of which we take judicial notice. (See Evid.Code, § 451, subd. (a).) As we have seen, a certificate of independent review is a document that is signed by independent counsel representing the transferor, who then "delivers to the transferor [the] original certificate ... with a copy delivered to the drafter." (§ 21351(b).) Contrary to the allegations of Osornio's complaint, the certificate is not "included" in the testamentary instrument. Similarly, contrary to the implication in Osornio's pleading, the drafter of the instrument is not the person who supplies the certificate as part of his or her duties to the transferor. We therefore conclude that the trial court properly held that Osornio's complaint was subject to demurrer because of the failure to allege a legal duty on the part of Weingarten.
VIII. Whether Osornio Should Have Been Granted Leave To Amend
A. Allegations of Proposed Amended Complaint
In determining whether the court should have granted leave to amend, we disregard Osornio's inartful pleading and examine whether there was a reasonable possibility that she could have amended her complaint to state a claim for legal malpractice. (See Blank v. Kirwan, supra,
Irrespective of the wording of the complaint, it is readily apparent that Osornio could have alleged that Weingarten breached a duty of care owed to her: Weingarten negligently failed to advise Ellis that the intended beneficiary under her 2001 Will, Osornio, would be presumptively disqualified because of her relationship as Ellis's care custodian.[25] Under this theory, Weingarten was negligent not only by failing to advise Ellis of the consequences of section 21350(a); he was also negligent in failing to address Osornio's presumptive disqualification by making arrangements to refer Ellis to independent counsel to advise her and to provide a Certificate of Independent Review required by section 21351(b).[26]
Osornio could have alleged that, as a proximate result of this negligence, sheas third party beneficiary to Ellis's engagement of Weingarten to draft the 2001 Willwas damaged. The damage was Osornio's failure to inherit under the 2001 Will. Osornio could have alleged further that this failure to inherit occurred because: (a) there was no certificate of independent review concerning the proposed donative transfer to Osornio under the 2001 Will; (b) said certificate would have *263 been obtained but for Weingarten's negligence in failing to advise Ellis and in failing to refer her to independent counsel; (c) absent this certificate, Osornio was required to prove by clear and convincing evidence (disregarding her own testimony) that the transfer of the estate to her under the 2001 Will was "not the product of fraud, menace, duress, or undue influence" (§ 21351(d), italics added); and (d) she was unable to meet this high burden of overcoming the presumption that she was a disqualified person under section 21350(a).
Having framed the potential amended complaint in this fashion, we must now address whether this proposed pleading sufficiently alleges a legal duty owed by Weingarten to the nonclient, Osornio. If we answer this question in the negative, we must affirm the trial court. If, however, we answer the question in the affirmative, we must necessarily find that the court abused its discretion by sustaining Weingarten's demurrer without granting Osornio leave to amend.
B. Balancing of Six Biakanja/Lucas Factors
Evaluating the existence of an attorney's duty to a nonclient as "a matter of policy" (Lucas, supra,
1. Transaction intended to affect plaintiff
As we have seen from our discussion, ante, "[i]n the cases finding duties owed to nonclients, the nonclients were the intended beneficiaries of the attorney's work or were relying on that work or were to be influenced by it (and the attorney knew or should have known this). [Citation.]" (Assurance Co. of America v. Haven (1995)
Unquestionably, this factor supports Osornio. Here, there is no doubt that "the *264 `end and aim' of the transaction [i.e., the drafting of the 2001 Will] was to provide for the passing" of Ellis's estate to Osornio. (Biakanja, supra,
2. Foreseeability of harm to plaintiff
We have no trouble concluding that this factor similarly supports Osornio. It was clearly foreseeable at the time Weingarten drafted the 2001 Will that, if he failed to exercise due care to effectuate the testamentary transfer that Ellis intended upon her death, Osornio would be damaged. Again, the circumstances the Supreme Court addressed in Biakanja, Lucas, and Heyer are indistinguishable from this case.
In addition, the 2001 Will was a revocation of Ellis's prior 1993 Will, under which another person, Williams, was beneficiary. This relevant fact increased the foreseeability of harm to Osornio in the event that there was no certificate of independent review of the 2001 Will. It concomitantly decreased the likelihood that Osornio would be able to meet her heavy burden (under § 21351(d)) of proving by clear and convincing evidence that the bequest was not the product of fraud, menace, duress, or undue influence.
3. Degree of certainty of plaintiff's injury
It is clear that Osornio sustained injury. Although Ellis intended under the 2001 Will that Osornio receive the entire estate, she will receive nothing if she is unable to rebut her presumptive disability under section 21350(a). Osornio's efforts to rebut the presumption have been unsuccessful. (See tentative decision In re the Estate of Dora J. Ellis, Monterey County Super. Ct. case nos. MP 16152, MP16195, Aug. 29, 2003.) Assuming these efforts are ultimately unsuccessful, Osornio will sustain the definite injury of being deprived of the estate she would have received, but for her disqualification.
4. Closeness between defendant's conduct and plaintiff's injury
We acknowledge that Weingarten's conduct as might be alleged in a proposed amended complaint does not have the same degree of closeness to Osornio's injury found in many of the authorities, ante, finding a duty owed by the attorney to a nonclient. This is admittedly not a casesuch as Lucas, supra,
As is evident, the closeness of Weingarten's conduct to the injury here is one resolvable only after the presentation of significant evidence. It suffices to say that we conclude here that the absence of an extreme closeness between conduct and injury, by itself, should not trump a finding of an attorney's duty to a nonclient in a case that otherwiseapplying the remaining five factorswarrants it.
5. Policy of preventing future harm
The case before us is similar to other cases in which courts have imposed a duty of care upon attorneys where beneficiaries are deprived of intended transfers of property as a result of failed wills or trusts. (See Heyer, supra,
We conclude that this fifth factor supports Osornio's claim. The imposition of duty under the circumstances before us would thus promote public policy: it would encourage the competent practice of law by counsel representing testators, trustors, and other clients making donative transfers to persons presumptively disqualified under section 21350(a).
6. Extent of burden on profession
Consistent with Lucas, an important factor we must consider in evaluating Weingarten's potential duty to Osornio under the facts before us is whether the extension of liability here would "impose an undue burden on the profession." (Lucas, supra,
An attorney "is expected ... to possess knowledge of those plain and elementary principles of law which are commonly known by well informed attorneys, and to discover those additional rules of law which, although not commonly known, may readily be found by standard research techniques. [Citations.] ... [E]ven with respect to an unsettled area of the law, we believe an attorney assumes an obligation to his client to undertake reasonable research in an effort to ascertain relevant legal principles and to make an informed decision as to a course of conduct based upon an intelligent assessment of the problem." (Smith v. Lewis (1975)
As one practice guide has explained: "An attorney who undertakes to assist a client in transferring property is necessarily assuming a duty to assist the client in making the transfer in a manner that does not unduly expose the transfer to attack." (1 Cal. Estate Planning (Cont.Ed.Bar 2004) Property Transfer Obstacles, § 3.8, p. 106.) For instance, the Supreme Court in Heyer held that "[a] reasonably prudent attorney should appreciate the consequences of post-testamentary marriage, advise the testator of such consequences, and use good judgment to avoid them if the testator so desires." (Heyer, supra,
The existence of statutory limitations on donative transfers to certain classes of people is a matter known to competent estate planning practitioners. One practice guide devotes an entire chapter to a discussion of donees who are presumptively disqualified under section 21350(a). (See 1 Cal. Trust and Probate Litigation (Cont.Ed.Bar 2004) Statutorily Disqualified Donees and Trustees, § 6A.1-6A.40, pp. 145-175.) Other guides for California estate planning practitioners discuss donees who are presumptively disqualified under section 21350(a). (See, e.g., 1 Cal. Will Drafting (Cont.Ed.Bar 2002) Professional Responsibility § 1.35, pp. 28-30; 1 Cal. Estate Planning, supra, Property Transfer Obstacles, § 3.8, p. 106; 2 Ross, Cal. Practice Guide: Probate (The Rutter Group 2001) ¶¶ 16:517.15 to 16:517.28, pp. 16-149 to 16-153.) Indeed, the Legislature deemed the subject of such importance that, at the time it enacted section 21350 in 1993, the Assembly bill included a separate statute under the Business and Professions Code, making an attorney's violation of section 21350 "grounds for discipline, if the attorney knew or should have known of the facts leading to the violation." (Bus. & Prof.Code, § 6103.6.)
An attorney drafting instruments on behalf of the transferor-clientthe dispositive provisions of which include a proposed transfer to a presumptively disqualified person under section 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 Planning, supra, § 3.8, p. 106.) We therefore hold that the attorney owes a duty of care: (1) to advise the client that, absent steps taken under section 21351(b), the subject transfer to the proposed transferee, if challenged, will have a significant likelihood of failing because of the proposed transferee's presumptive disqualification under section 21350(a); and (2) to recommend that the client seek independent counsel in an effort to obtain a certificate of independent review provided under section *267 21351(b). Consistent with the authorities discussed, anteincluding Lucas, Heyer, Garcia, and Bucquet, suprathis duty of care is owed to both the transferor-client and to the prospective transferee. In so holding, we conclude that this area of the law is not onesuch as the Lucas court found to be the case with restraints on alienation and the rule against perpetuitiesthat is "a question of law on which reasonable doubt may be entertained by well-informed lawyers. [Citations.]" (Lucas, supra,
Furtheras a matter related to the question of undue burden upon the professionwe find that the imposition of liability here would not result in the attorney becoming unduly preoccupied with the possibility of negligence claims from third parties who might have dealings with his or her clients. (See Goodman, supra,
Moreover, our holding does not suggest that an attorney must "draft litigation-proof legal documents." (Ventura, supra,
We thus conclude that imposition of duty upon an attorney toward third parties here "does not place an undue burden on the profession, particularly when taking into consideration that a contrary conclusion would cause an innocent beneficiary to bear the loss." (Lucas, supra,
C. The Radovich and Moore decisions
In arguing against a finding of duty under the narrow circumstances presented here, Weingarten relies primarily upon our decision in Radovich, supra, 35 Cal. *268 App.4th 946,
In Radovicha case factually distinguishablewe refused to extend an attorney's duty to a nonclient who was a mere potential beneficiary under an unsigned draft will. (Radovich, supra, 35 Cal. App.4th at pp. 965-966,
Likewise, in Radovich, we expressed concern that the imposition of liability by an estate planning attorney to potential beneficiaries under unsigned estate planning documents "could improperly compromise an attorney's primary duty of undivided loyalty to his or her client." (Radovich, supra,
Moore, supra, also involved circumstances entirely distinct from those presented here. As noted, ante, the question in Moore was whether an attorney owed "a duty to beneficiaries under a will to evaluate and ascertain the testamentary capacity of a client seeking to amend the will or to make a new will and ... to preserve evidence of that evaluation." (Moore, supra,
The Moore court rejected the beneficiaries' contention that the attorney owed them a duty to evaluate and document his client's testamentary intent, concluding that "[f]irst and foremost, we believe the duty of loyalty of the attorney to the client may be compromised by imposing a duty to beneficiaries in these circumstances." (Moore, supra,
Here, as we have discussed, ante, the imposition of liability upon attorneys to advise their transferor-clients concerning the potential disqualifying effects of transfers to persons identified in section 21350(a) does not impose an undue burden on the legal profession. Further, such a finding of dutyunlike the circumstances in either Moore or Radovichwill not compromise the attorney's duty of undivided loyalty to the client-transferor. Moreover, unlike the duty theory rejected in Moore, our holding does not require the attorney to evaluate or document the capacity of his or her transferor-client. Instead, it imposes a duty upon the attorney to advise the client of section 21350(a)'s effect of potentially disqualifying the proposed donee, and to assist the client in attempting to eliminate those consequences to effectuate the client's donative intentions.
The Moore court cited section 51 of the Restatement Third of Law Governing Lawyers as a basis for its rejection of attorney liability. (Moore, supra, 109 Cal.App.4th at pp. 1301-1302,
Furthermore, the comment explaining subsection (3) of section 51 of the Restatementa comment which was also quoted by the Moore court (Moore, supra, 109 Cal.App.4th at pp. 1301-1302,
We thus disagree with Weingarten that "Moore is on all fours" with the case before us. We conclude that neither Moore nor our decision in Radovich is controlling here.
D. Conclusion
We have balanced the factors that must be considered in evaluating the question of an attorney's potential liability to third parties. As a matter of public policy, we must conclude that Weingarten owed a duty of care to Osornio under the facts as may be alleged in an amended complaint. Because Osornio could have amended her pleading to state a cause of action for professional negligence, the trial court abused its discretion by failing to grant Osornio leave to amend when it sustained the demurrer.
DISPOSITION
The judgment is reversed and, on remand, the trial court is directed to grant Osornio leave to file an amended complaint.
WE CONCUR: PREMO, Acting P.J., and BAMATTRE-MANOUKIAN, J.
NOTES
Notes
[*] Judge of the Santa Clara County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
[1] All statutory references are to the Probate Code unless otherwise indicated.
[2] In the briefing on appeal, we were advised that Weingarten passed away on February 18, 2004, shortly before judgment was entered below. Accordingly, we entered an order in this appeal on September 14, 2004, substituting, as defendant and respondent, Lawrence A. Weingarten as personal representative of the estate of Saul Weingarten. This substitution of parties notwithstanding, for convenience, we refer to defendant and respondent as "Weingarten" throughout this opinion.
[3] In re the Estate of Dora J. Ellis, Monterey County Superior Court, case numbers MP16152 and MP16195.
[4] In the probate proceeding, both Weingarten and his paralegal, Anne Fingold, testified that Osornio accompanied Ellis to Weingarten's office on September 19, 2001. Fingold testified further that "it appeared to her that Ms. Ellis was dependent on her caretaker, Ms. Osornio."
[5] The tentative decision directed that counsel for Williams prepare a statement of decision consistent with the court's ruling. The parties have not provided us with any pleadings reflecting that the decision of the probate court is final. This fact notwithstanding, the arguments on appeal strongly suggest that both parties believe that the probate court has rendered a final decision adverse to Osornio. Therefore, any potential lack of finality of the probate court's decision is of no consequence to our consideration of the issues in this appeal.
[6] The actual finding of the probate court was: "Osornio has failed to satisfy her burden of rebutting the presumption of undue influence created by Probate Code Section 21351 (d). Viewing the evidence as a whole, the Court finds the evidence before the Court is not sufficiently `clear and convincing' to overcome the presumption that the will executed by Ms. Eillis on September 19, 2001, leaving all her estate to her caretaker, was not [sic] a product of undue influence."
[7] In addition to contending that he owed no duty to Osornio, Weingarten argued below that her claim was barred by collateral estoppel; he asserted that the probate court's previous ruling against Osornio's petition to probate the 2001 Will barred the malpractice claim. Weingarten does not advance this collateral estoppel argument on appeal. We therefore deem the contention waived. (See Jones v. Superior Court (1994)
[8] The statute defines the terms "dependent adult" and "care custodian" as follows: "For purposes of this section, the term `dependent adult' has the meaning as set forth in Section 15610.23 of the Welfare and Institutions Code and also includes those persons who (1) are older than age 64 and (2) would be dependent adults, within the meaning of Section 15610.23, if they were between the ages of 18 and 64. The term `care custodian' has the meaning as set forth in Section 15610.17 of the Welfare and Institutions Code." (§ 21350, subd. (c).) As noted in our recitation of facts (part II, ante) Osornio has admitted that she was a care custodian of Ellis, a dependent adult.
[9] "`Instrument' is broadly defined in [Probate Code] section 45 as `a will, trust, deed, or other writing that designates a beneficiary or makes a donative transfer of property.'" (Rice v. Clark (2002)
[10] Although not relevant to the issues on appeal, other instances in which donative transfers to persons identified in section 21350(a) are not presumed invalid are: where the transferee or the drafter is the transferor's relative, cohabitant, or registered domestic partner (§ 21351, subd. (a)); or where, "[a]fter full disclosure of the relationships of the persons involved, the instrument is approved" by the court in a special proceeding. (§ 21351, subd. (c).)
[11] This option, however, is not available to the drafter of the instrument, where the transferor has failed to obtain a certificate under section 21351(b). (§ 21351, subd. (e)(1).)
[12] This placement of the burden of proof upon the proponent of the instrument is, in effect, the converse of the typical will contest, where the contestant bears the burden of proving a basis to invalidate the instrument. (See § 8252, subd. (a); Graham v. Lenzi (1995)
[13] "The primary purpose of [Assembly Bill No.] 21 [which, inter alia, added sections 21350 to 21355 of the Probate Code] is to strictly forbid attorneys from drafting (or causing to be drafted) wills that leave themselves, or relatives or business partners, gifts of more than insubstantial value, i.e., $500." (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 21 (1993-1994 Reg. Sess.) as amended Feb. 4, 1993, p. 3.)
[14] For extensive reviews of multijurisdictional authorities on an attorney's duty to third parties, see generally, Annot., What Constitutes Negligence Sufficient to Render Attorney Liable to Person Other than Immediate Client (1988)
[15] The Supreme Court in Lucas actually recited only five of the six Biakanja factors, omitting factor number 5 quoted above, i.e., "the moral blame attached to the defendant's conduct." (Lucas, supra,
[16] The Supreme Court later enunciated another factor to consider in determining the existence of duty a factor related to the question of "undue burden on the profession," namely, whether imposing liability would impinge upon the attorney's ethical duties to his or her client. (See Goodman, supra,
[17] Somewhat ironically, the Supreme Courtdespite announcing that the intended beneficiaries had the theoretical right to recover against the attorney ultimately rejected plaintiffs' claims. It concluded that, because of uncertainties in the law regarding the rule against perpetuities and restraints on alienation, "it would not be proper to hold that defendant failed to use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly exercise." (Lucas, supra,
[18] Former section 70, which was repealed effective 1985 (Stats.1983, ch. 842, § 18, p. 3024), provided as follows: "If a person marries after making a will, and the spouse survives the maker, the will is revoked as to the spouse, unless ... the spouse is provided for in the will, or in such way mentioned therein as to show an intention not to make such provision; and no other evidence to rebut the presumption of revocation can be received." (Stats.1931, ch. 281, § 70, p. 590; see also §§ 6560 to 6562.)
[19] The Supreme Court also noted that, while it held in Lucas that the intended beneficiary under a will could bring suit against the testator's attorney under both a theory of negligence and under a contractual theory of third party beneficiary, "[t]his latter theory of recovery, however, is conceptually superfluous since the crux of the action must lie in tort in any case; there can be no recovery without negligence." (Heyer, supra,
[20] See footnote 7, ante.
[21] See also Morales, supra,
[22] The will provided that 25 percent of the residuary estate would go to the "`Society for the Prevention of Cruelty to Animals (Local or National),'" an entity that, as named, did not exist. (Ventura, supra,
[23] Another appellate court rejected a negligence claim under which the plaintiff asserted that he was deprived of a bequest that he would have otherwise received had the testator's attorney not prepared a subsequent will that was validly executed. (See Hiemstra v. Huston (1970)
[24] In various contexts, California appellate courts have similarly heldafter balancing the Biakanja/Lucas factorsthat the attorney owed no duty of care to a nonclient. (See, e.g., Mattco Forge, Inc. v. Arthur Young & Co. (1995)
[25] As noted in our discussion of facts, ante, it is apparent that Weingarten knew at the time he drafted the 2001 Will that Osornio was, in fact, Ellis's care custodian.
[26] This theory is borne out by the probate court's tentative decision. The court noted that Weingarten testified that "he did not refer [Ellis] to an independent attorney to counsel her about the nature and consequences of the intended transfer [of her estate to Osornio] and did not obtain a Certificate of Independent Review in compliance with Probate Code Section 21351."
[27] As we indicate in footnote 15, ante, in determining an attorney's duty to a nonclient, courts have generally not addressed the additional Biakanja factor, namely, "the moral blame attached to the defendant's conduct." (Biakanja, supra,
[28] Weingarten also asserts that Osornio "no-where alleges that she retained (or paid) Mr. Weingarten to prepare the Independent Certification." This argument misses the mark, and, indeed, makes no sense because it is the client, not the beneficiary, who is required to retain independent counsel under section 21351(b).
[29] The Second District, Division One, has recently rejected negligence claims of beneficiaries against estate planning attorneys in two recent cases; neither case is final at this time. (See Boranian v. Clark (2004)