Weshler v. Oldman, Cooley, Sallus, etc. CA2/1 ( 2022 )

Filed 10/3/22 Weshler v. Oldman, Cooley, Sallus, etc. CA2/1
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
WINNIE WESHLER, B315005
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v. 20STCV41539)
OLDMAN, COOLEY, SALLUS,
BIRNBERG, COLEMAN &
GOLD, LLP,
Defendants and
Respondents.
APPEAL from a judgment (order of dismissal) of the
Superior Court of Los Angeles County, Richard J. Burdge, Judge.
Affirmed.
Randall S. Rothschild; and Pettler & Miller and Mark A.
Miller for Plaintiff and Appellant.
Charlston, Revich, Harris & Hoffman and Tim Harris for
Defendants and Respondents.
_______________________________
Plaintiff and appellant Winnie Weshler is the successor
trustee of two family trusts at issue in an underlying probate
action. In October 2020, she filed the present action for legal
malpractice and breach of fiduciary duty against defendants and
respondents Oldman, Cooley, Sallus, Birnberg, Coleman & Gold,
LLP, David Coleman, and James Birnberg (collectively, Oldman).
The trial court sustained Oldman’s demurrer to Weshler’s first
amended complaint without leave to amend, concluding this
action is barred by the one-year statute of limitations for
1
malpractice actions in Code of Civil Procedure section 340.6.
Weshler appeals from the order of dismissal, and we affirm.
In 2015, Weshler became successor trustee of the family
2
trusts after the former trustee, William Rosensweig, died.
Oldman had represented William in his capacity as trustee and
in his individual capacity. Oldman had also represented
William’s estate in a probate action filed in 2016 against the
estate by Weshler as successor trustee, in which Weshler sought
to recover trust funds William had allegedly wrongfully
3
distributed during the time he was trustee. In November 2017,
the probate court granted Weshler’s motion to disqualify Oldman
1
Undesignated statutory references are to the Code of Civil
Procedure.
2
To avoid confusion and to be consistent with the parties’
briefing, we hereafter refer to William Rosensweig by his first
name because other individuals referenced in this opinion share
the same surname.
3
Throughout this opinion, when we refer to the “probate
action,” we are referring to the 2016 probate action Weshler filed
against William’s estate, through his personal representatives.
2
as counsel for William’s estate in the probate action due to a
conflict of interest arising from Oldman’s representation of
William as trustee and in his individual capacity during the time
William allegedly committed trustee malfeasance. In her motion
to disqualify, Weshler argued Oldman owed her, as successor
trustee, duties of confidentiality and loyalty that conflicted with
Oldman’s representation of William’s estate. She also asserted
Oldman had engaged in legal maneuvering to cover up William’s
unauthorized distributions of trust funds and had accepted
payment of legal fees from trust funds while representing
William as trustee and individually under a conflict of interest.
The representatives of William’s estate appealed the probate
court’s order disqualifying Oldman, and the Court of Appeal
affirmed the order in an opinion issued in October 2019.
In the present action, filed in October 2020, Weshler alleges
Oldman committed legal malpractice and breached its fiduciary
duties to her as successor trustee by, among other things,
representing William’s estate in the probate action when the
estate’s interests were adverse to, and conflicted with, her
interests as successor trustee; violating duties of confidentiality
and loyalty owed to her as successor trustee; and accepting
payment of legal fees from trust funds during its representation
of William as trustee and individually, while William was
committing malfeasance. This action is based on factual
allegations known to Weshler no later than 2017, facts Weshler
asserted in her successful motion to disqualify Oldman filed in
2017.
Weshler contends the one-year statute of limitations for
filing this malpractice action was tolled during the time the
probate court’s disqualification order was under review in the
3
Court of Appeal. She argues, among other things, the Court of
Appeal had exclusive subject matter jurisdiction over attorney-
client, breach of duty, and conflicts issues while the automatic
stay of the disqualification order was in effect, and therefore she
could not file a malpractice action which embraced these issues
until after the Court of Appeal’s decision on the disqualification
order was final. She also contends Oldman is estopped from
asserting a statute of limitations defense because it took the
position in the probate action that its representation of William’s
estate against the trust did not pose a conflict of interest because
Oldman had never represented Weshler and there was no
attorney-client relationship between them, and Oldman had not
received confidential information from her. For the reasons
explained below, we reject Weshler’s contentions, conclude this
action is barred by the one-year statute of limitations, and affirm
the order of dismissal. Nothing tolled the statute of limitations
on the causes of action Weshler asserts in this action, and
nothing prevented her from filing this action within the one-year
statute of limitations while the appeal from the disqualification
order in the probate action was pending.
BACKGROUND
Consistent with our standard of review of a trial court’s
order sustaining a demurrer, we accept as true all properly
pleaded material facts in the operative first amended complaint
and matters subject to judicial notice. (Mathews v. Becerra (2019)
8 Cal.5th 756, 768.)
I. Oldman’s Representation of William
For almost a decade before his death in August 2015,
William was trustee of two family trusts. The parties herein
4
refer to these trusts collectively by an abbreviated name, the Lee
Trusts.
In November 2014, William, in his capacity as trustee of
the Lee Trusts, retained defendant James Birnberg (an attorney
with defendant Oldman, Cooley, Sallus, Birnberg, Coleman &
4
Gold, LLP) to provide representation on matters regarding the
Lee Trusts. The law firm billed William at least $57,371 in
attorney fees and costs on these matters. Of this amount,
William paid $38,150 with assets from the Lee Trusts.
In April 2015, William and his wife, Marilyn Rosensweig,
retained Birnberg to represent them in their personal estate
planning matters, including drafting the Rosensweig Family
Trust. After William died in August 2015, Oldman represented
William’s estate through Marilyn, the trustee of the Rosensweig
Family Trust, and Linda Rosensweig, the executor of William’s
probate estate.
II. Weshler Becomes Successor Trustee and Brings the
Probate Action Against William’s Estate
After William’s death, Weshler was appointed successor
trustee of the Lee Trusts. She retained counsel (not Oldman or
anyone affiliated with it) to represent her as successor trustee in
connection with matters related to the Lee Trusts. As alleged in
her operative first amended complaint in this action, she
“discovered William may have committed potential malfeasance
while he was trustee of the Lee Trusts.”
4
As explained above, we use the shortened name “Oldman”
to refer to defendants and respondents collectively: Oldman,
Cooley, Sallus, Birnberg, Coleman & Gold, LLP, and its
attorneys, David Coleman, and James Birnberg.
5
In July 2016, Weshler, as successor trustee of the Lee
Trusts, and through her retained counsel, filed a probate action
against Linda, as personal representative of William’s estate, and
Marilyn, as trustee of the Rosensweig Family Trust, to redress
William’s alleged breaches of trust duties. (LASC Case No.
BP039256.) In this probate action, Weshler alleged, among other
things, that William had secretly distributed to himself around
$500,000 from the Lee Trusts. Oldman, through attorney David
Coleman (a defendant/respondent in the present action),
represented Linda and Marilyn in this probate action. Lewis
Brisbois Bisgaard & Smith LLP (Lewis Brisbois) was cocounsel
5
with Oldman in its representation of Linda. Hereafter, we refer
to the respondents in the probate action (Linda and Marilyn),
collectively, as William’s estate.
III. Weshler Moves to Disqualify Counsel in the Probate
Action
Asserting conflicts of interest arising from Oldman’s
representation of William’s estate and its previous representation
of William as trustee, Weshler asked Oldman to withdraw as
counsel in the probate action. Oldman refused.
On June 19, 2017, Weshler, as successor trustee of the Lee
Trusts, filed a motion to disqualify Oldman (and cocounsel Lewis
Brisbois) in the probate action. In the motion, Weshler asserted
William was able to perpetuate his alleged malfeasance as
trustee of the Lee Trusts (e.g., unauthorized distributions of trust
assets) because Oldman “engaged in various legal maneuvers on
[William]’s behalf that appear now to have been designed to
delay/hide [William]’s appropriation of trust funds.” She also
5
Lewis Brisbois is not a party to the present action.
6
asserted Oldman “switched sides” to represent William’s estate
(through Linda and Marilyn) in the probate action Welsher
brought to redress William’s malfeasance as trustee and breaches
of trust duties. Weshler argued Oldman abandoned its duty of
loyalty to the office of the trustee and began advocating solely for
William’s estate, using confidential information it obtained
during its previous representation of William as trustee. Weshler
further argued, as successor trustee, she now stood in the shoes
of the former trustee and held the attorney-client privilege
between Oldman and William in his capacity as trustee. Weshler
contended Oldman must be disqualified because the duties of
confidentiality and loyalty it owed her as successor trustee
conflicted with its representation of William’s estate in the
probate action. Weshler also asserted there were conflicts of
interest arising from Oldman’s concurrent representation of
William individually and as trustee, as well as Oldman’s previous
representation of other family members connected with the Lee
Trusts.
Weshler attached to her motion to disqualify, among other
things, a 16-page declaration from attorney Randall S. Rothschild
(one of Weshler’s appellate attorneys in the present action),
detailing Oldman’s actions requiring disqualification. Rothschild
asserted in the declaration that Oldman had engaged in “legal
maneuvers” that “appear to have been designed solely to
delay/prevent discovery of the draining of the trust while it was
taking place. These delays also provided [William] more time to
pay himself additional monies that were being earned by one of
the trusts on a monthly basis.” Rothschild also stated in the
declaration that William paid Oldman’s legal fees with monies
7
from the Lee Trusts while William was committing trustee
malfeasance and breaching his trust duties.
In its opposition to Weshler’s motion to disqualify, Oldman
argued Weshler did not have standing to bring the motion
because Oldman never represented her or received confidential
information from her. Weshler had retained her own counsel in
her capacity as successor trustee of the Lee Trusts. Oldman also
argued, “[t]here was never an attorney-client relationship of any
sort between” it and Weshler.
On November 22, 2017, the trial court granted Weshler’s
motion to disqualify Oldman (and denied the motion as to Lewis
Brisbois). The court concluded Weshler had standing to bring the
motion in her capacity as successor trustee of the Lee Trusts
based on the attorney-client relationship between Oldman and
the former trustee (William). The court explained, “counsel
representing a trustee of a trust represents the office of trustee in
connection with the administration of the trust, so Weshler, as
successor trustee, has standing to challenge [Oldman].” The
court further concluded Oldman must be disqualified based on
conflicts of interest arising from its representation of William
individually and as trustee. The court explained: “[Oldman]
admit[s] that [it] represented William concurrently in his role as
trustee and as an individual. Particularly where, as here,
William was purportedly double dealing and breaching his
fiduciary duties to the trust, the dual representation is untenable
and places [Oldman] in a conflict situation which requires [its]
disqualification. Indeed, Weshler contends that [Oldman]
assisted William by delaying providing information to
beneficiaries which could have alerted them to his malfeasance.”
8
William’s estate (Linda and Marilyn), represented by
Oldman, appealed the disqualification order as to Oldman (and
Weshler appealed the disqualification order as to Lewis Brisbois).
On April 13, 2018, on Linda’s motion, the probate court stayed
the probate action pending resolution of the appeal.
On October 31, 2019, the Court of Appeal issued an opinion
affirming the portion of the order disqualifying Oldman (and
reversing the portion of the order declining to disqualify Lewis
Brisbois). (Weshler v. Rosensweig (Oct. 31, 2019, B287099)
[nonpub. opn.].) The appellate court concluded Weshler, in her
capacity as successor trustee, stood in the shoes of the
predecessor trustee, and thus Oldman owed her “the duties owed
a former client—namely, duties of confidentiality and loyalty.”
(Id. at p. 9.) Those duties were “imperiled” by Oldman’s
representation of William’s estate (Linda and Marilyn) in the
probate action, a representation substantially related to
Oldman’s representation of William as trustee of the Lee Trusts.
(Id. at pp. 9, 19.) Therefore, the trial court did not abuse its
discretion in concluding Weshler had standing to bring the
motion to disqualify and in ordering Oldman’s disqualification.
(Id. at p. 9.) The appellate court rejected William’s estate’s
argument that Oldman owed no duties to Weshler because she
was never Oldman’s client. The court explained, “a new trustee
succeeds to the rights and duties of her predecessor’s, including
to the attorney-client relationships the predecessor, in his or her
capacity as trustee, had with counsel.” (Id. at p. 11.) It is
“irrelevant” that Weshler did not retain Oldman or provide
Oldman with confidential information. (Id. at p. 17, fn. 3.) On
January 6, 2020, the Court of Appeal issued the remittitur, and
the opinion became final.
9
IV. Weshler Files the Present Malpractice Action
Against Oldman
A. The complaint
On October 29, 2020, Weshler filed the present action
against Oldman for professional negligence (legal malpractice)
and breach of fiduciary duty. She based her causes of action on
factual allegations she asserted in her motion to disqualify
Oldman, filed more than three years before. She alleged conflicts
of interest arising from (1) Oldman’s concurrent representation of
William individually and as trustee and (2) Oldman’s
representation of William’s estate (Linda and Marilyn) in the
probate action Weshler brought against the estate to redress
William’s malfeasance as trustee and breaches of trust duties.
She alleged Oldman breached duties of confidentiality and loyalty
it owed to her as successor trustee. She sought damages,
including the legal fees she had incurred in the probate action “in
protecting the Lee Trusts from harm caused by [Oldman]’s acts
and breaches” and “the $38,150 of trust monies William paid
[Oldman] during their conflicted representation of him in both
his fiduciary and individual capacities at the same time William
was secretly distributing $500,000 of Lee Trusts’ monies to
himself.” In the complaint, Weshler included allegations about
her motion to disqualify Oldman; the trial court’s order on the
motion; the appeal and automatic stay of the disqualification
order; the stay in the probate action while the appeal of the
disqualification order was pending; and the Court of Appeal’s
opinion affirming the disqualification order as to Oldman. She
also attached to her complaint, among other exhibits, the
disqualification order and Court of Appeal opinion.
10
B. Oldman’s demurrer to the complaint
Oldman demurred to Weshler’s complaint on the ground
this action is barred by the one-year statute of limitations for
malpractice actions in section 340.6. Oldman argued Weshler
suspected wrongdoing and had been damaged (as successor
trustee) by November 22, 2017, at the latest, when the probate
court granted her motion to disqualify. Oldman referenced
Weshler’s assertions in the motion to disqualify that Oldman had
assisted William in his malfeasance and that Oldman breached
its duty of loyalty to her as the successor trustee. Oldman also
noted the damages Weshler seeks in this action were incurred
prior to November 22, 2017: the legal fees William paid to
Oldman with trust monies while Oldman was representing
William individually and as trustee under a conflict of interest;
damages caused by Oldman’s assistance of William in the trustee
malfeasance; and the legal fees Weshler incurred in the probate
action prior to Oldman’s disqualification. Weshler filed this
action on October 29, 2020, nearly three years after the probate
court ruled on her motion to disqualify Oldman.
Oldman also asserted none of the tolling provisions
enumerated in section 340.6 applied here to toll the one-year
statute of limitations. Specifically, Oldman argued continuous
representation tolling did not apply here because Oldman never
represented Weshler. Oldman also argued the automatic stay of
the disqualification order in the probate action, while that matter
was on appeal, did not toll the statute of limitations for the
present malpractice action.
In her opposition to the demurrer, Weshler argued the
automatic stay of the disqualification order in the probate action,
while that matter was on appeal, tolled the one-year statute of
11
limitations for this malpractice action. She cited section 916,
subdivision (a), which provides in pertinent part: “[T]he
perfecting of an appeal stays proceedings in the trial court upon
the judgment or order appealed from or upon the matters
embraced therein or affected thereby, including enforcement of
the judgment or order, but the trial court may proceed upon any
other matter embraced in the action and not affected by the
judgment or order.” She also cited section 356, which provides:
“When the commencement of an action is stayed by injunction or
statutory prohibition, the time of the continuance of the
injunction or prohibition is not part of the time limited for the
commencement of the action.” And she referenced the stay of the
probate action that the probate court granted at Linda’s request.
Essentially, she argued she could not file this malpractice action
against Oldman until after the Court of Appeal affirmed the
probate court’s order disqualifying Oldman as counsel for
William’s estate (Linda and Marilyn) in the probate action, and
the Court of Appeal decided there was a former attorney-client
relationship between Oldman and Weshler as successor trustee.
Weshler also argued in her opposition that Oldman’s
continued representation of William’s estate in the probate
matter, until the probate court’s disqualification order was
affirmed, tolled the statute of limitations for this malpractice
action. She cited section 340.6, subdivision (a)(2), which states
the one-year statute of limitations for malpractice actions is
tolled during the time the “attorney continues to represent the
plaintiff regarding the specific subject matter in which the
alleged wrongful act or omission occurred.” She made this
continuous representation argument notwithstanding that she
retained new counsel after she was appointed as successor
12
trustee and Oldman had not represented the office of the trustee
since 2015 when William died.
Weshler further argued the statute of limitations for this
malpractice action was tolled under section 340.6, subdivision
(a)(1) until January 6, 2020, when the Court of Appeal decision
on the disqualification order became final, and she then suffered
actual injury. She stated: “This action is based upon the
attorney fee damages Plaintiff incurred as a result of Defendants’
breach of their duties of confidentiality and loyalty as found by
the Court of Appeal; this is not a case based upon the dual
representation conflict found by the superior court as Defendants
mistakenly assert. [Citation.] While the Court of Appeal
affirmed the trial court’s disqualification order in part, it did so
for completely different reasons, even reversing part of the trial
court’s order [as to Lewis Brisbois].” She continued: “For
purposes of this action, there was thus no ‘injury’ until the Court
of Appeal established grounds for the attorney fee damages
sought here. This occurred in January 2020, not November 2017
as Defendants[] claim. The precondition for [the] malpractice
claim is the establishment of attorney-client relationship and
breach of duties, both issues that were presented to the Court of
Appeal for adjudication and resolution.”
Finally, Weshler argued in her opposition that Oldman was
estopped from “switch[ing] positions to avoid damages.” She
asserted: “Defendants spent years strenuously maintaining to
the [probate] and appellate courts that no attorney-client
relationship or conflicts of interest existed between them and
Plaintiff as successor trustee. . . . Now, after fighting these issues
in the trial court and on appeal for years, Defendants
13
disingenuously claim the opposite, that Plaintiff actually did
have standing to sue them for malpractice after all.”
On April 19, 2021, the trial court sustained Oldman’s
demurrer, concluding this action is barred by the one-year
statute of limitations in section 340.6. The court rejected
Weshler’s arguments, including that the limitations period was
tolled. The court granted Weshler leave to amend. Without
opposition, the court granted the parties’ requests for judicial
notice, including Oldman’s request for judicial notice of all papers
filed in connection with Weshler’s motion to disqualify, and
Weshler’s request for judicial notice of papers filed in the probate
action.
C. The operative first amended complaint
On May 12, 2021, Weshler filed a first amended complaint
against Oldman, asserting the same two causes of action for
professional negligence (legal malpractice) and breach of
fiduciary duty. She included additional allegations about
Oldman’s representation of William individually (along with his
wife, Marilyn) and as trustee; Oldman’s representation of
William’s estate through his personal representatives; William’s
payments to Oldman with trust funds for legal fees he incurred
as trustee; and the expenditures William made with the
unauthorized distributions he took from the Lee Trusts. The
same factual allegations were included in the motion to disqualify
that Weshler filed in June 2017.
Weshler also included new allegations mirroring the
arguments she asserted in her opposition to Oldman’s demurrer
to her original complaint: her legal conclusions about how the
one-year statute of limitations was tolled and why Oldman is
estopped from asserting a statute of limitations defense.
14
D. Oldman’s demurrer to the first amended
complaint
Oldman demurred to the first amended complaint, raising
the same arguments it asserted in its original demurrer in
support of its statute of limitations defense (as summarized
above). Oldman also argued the first amended complaint does
not allege new facts indicating Weshler brought this action with
the one-year limitations period.
Weshler opposed the demurrer to the first amended
complaint, raising the same arguments she asserted in her
opposition to Oldman’s original demurrer (as summarized above):
the stay of the disqualification order, while that matter was on
appeal, tolled the statute of limitations for the present
malpractice action; Oldman’s representation of William’s estate
in the probate action constituted continuous representation that
tolled the statute of limitations for the present action; Weshler
did not suffer an actual injury as successor trustee due to
Oldman’s conduct until the Court of Appeal’s decision on the
disqualification of Oldman became final; and Oldman is estopped
from asserting a statute of limitations defense to the present
malpractice action because it took the position in the probate
court that “no attorney-client relationship or conflicts of interest
existed between [it] and [Weshler] as successor trustee.”
On August 4, 2021, after hearing oral argument, the trial
court issued a 10-page minute order sustaining Oldman’s
demurrer to Weshler’s first amended complaint without leave to
amend. The court rejected Weshler’s arguments and concluded
this action is barred by the one-year statute of limitations in
section 340.6. On August 16, 2021, the court issued a signed
15
order dismissing this action with prejudice. Weshler timely
appealed from the order of dismissal.
DISCUSSION
I. Standard of Review
“ ‘In reviewing an order sustaining a demurrer, we examine
the operative complaint de novo to determine whether it alleges
facts sufficient to state a cause of action under any legal theory.’ ”
(Mathews v. Becerra, supra, 8 Cal.5th at p. 768.) A defendant
may assert a statute of limitations defense on demurrer if the
complaint shows on its face that the statute of limitations bars
the action. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153
Cal.App.4th 1308, 1315-1316.)
“ ‘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 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 has abused its discretion and we reverse; if not,
there has been no abuse of discretion and we affirm. [Citations.]
The burden of proving such reasonable possibility is squarely on
the plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Zelig
v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
II. The Statute of Limitations in Section 340.6
Section 340.6, subdivision (a) provides, in pertinent part:
“An action against an attorney for a wrongful act or omission,
16
other than for actual fraud, arising in the performance of
professional services shall be commenced within one year after
the plaintiff discovers, or through the use of reasonable diligence
should have discovered, the facts constituting the wrongful act or
omission, or four years from the date of the wrongful act or
omission, whichever occurs first.” Weshler does not dispute that
the statute of limitations in section 340.6 applies to her cause of
action for breach of fiduciary duty as well as her cause of action
for professional negligence (legal malpractice). (Bergstein v.
Stroock & Stroock & Lavan LLP (2015) 236 Cal.App.4th 793, 819
(Bergstein) [the statute of limitations in section 340.6 applies to
causes of action for attorney professional negligence and breach
of fiduciary duty].)
In its demurrer to Weshler’s operative first amended
complaint, Oldman argued this action is barred by the one-year
statute of limitations in section 340.6. Neither the parties nor
the trial court addressed the four-year statute of limitations in
section 340.6.
“Under the discovery rule, the statute of limitations begins
to run when the plaintiff suspects or should suspect that her
injury was caused by wrongdoing, that someone has done
something wrong to her. . . . [T]he limitations period begins once
the plaintiff ‘ “ ‘has notice or information of circumstances to put
a reasonable person on inquiry . . . .’ ” ’ ” (Jolly v. Eli Lilly & Co.
(1988) 44 Cal.3d 1103, 1110-1111, fn. omitted; Bergstein, supra,
236 Cal.App.4th at p. 818.) “It is well settled that the one-year
limitations period of section 340.6 ‘ “is triggered by the client’s
discovery of ‘the facts constituting the wrongful act or omission,’
not by h[er] discovery that such facts constitute professional
negligence, i.e., by discovery that a particular legal theory is
17
applicable based on the known facts. ‘It is irrelevant that the
plaintiff is ignorant of h[er] legal remedy or the legal theories
underlying h[er] cause of action.’ ” ’ ” (Peregrine Funding, Inc. v.
Sheppard Mullin Richter & Hampton LLP (2005) 133
Cal.App.4th 658, 682, 685.)
Section 340.6 enumerates five circumstances that toll the
statute of limitations. Weshler contends three of those
circumstances occurred here to toll the statute of limitations on
her causes of action against Oldman for professional negligence
(legal malpractice) and breach of fiduciary duty:
“(1) The plaintiff has not sustained actual injury.
“(2) The attorney continues to represent the plaintiff
regarding the specific subject matter in which the alleged
wrongful act or omission occurred.
[¶] . . . [¶]
(4) The plaintiff is under a legal or physical disability that
restricts the plaintiff’s ability to commence legal action.”
(§ 340.6, subd. (a)(1)-(2) & (4).)
Below we address (and reject) Weshler’s contentions
regarding tolling of the statute of limitations.
III. The Statute of Limitations on Weshler’s Causes of
Action Against Oldman Began to Run in 2017, at the
Latest
A cause of action generally “accrues at ‘the time when the
cause of action is complete with all of its elements.’ ” (Fox v.
Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806-807.) The
discovery rule, discussed above, “only delays accrual until the
plaintiff has, or should have, inquiry notice of the cause of
action.” (Id. at p. 807.)
18
“ ‘ “ ‘The elements of a cause of action for professional
negligence are: (1) the duty of the professional to use such skill,
prudence, and diligence as other members of the profession
commonly possess and exercise; (2) breach of that duty; (3) a
causal connection between the negligent conduct and the
resulting injury; and (4) actual loss or damage resulting from the
professional negligence.’ ” ’ [Citation.] The elements of a cause of
action for breach of fiduciary duty are the existence of a fiduciary
relationship, breach of fiduciary duty, and damages.”
(Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223
Cal.App.4th 1105, 1128.)
In June 2017, when Weshler, as successor trustee, filed her
motion to disqualify Oldman in the probate action, she asserted
the following in her papers: As successor trustee, she stood in the
shoes of the former trustee and held the attorney-client privilege
between Oldman and William in his capacity as trustee. The
duties of confidentiality and loyalty Oldman owed her as
successor trustee conflicted with Oldman’s representation of
William’s estate in the probate action she brought to redress
William’s malfeasance as trustee and breaches of trust duties.
Oldman abandoned its duty of loyalty to the office of the trustee
when it “switched sides” and began advocating solely for
William’s estate, using confidential information it obtained in its
previous representation of William as trustee. During the time it
represented William as trustee, Oldman assisted William in
perpetuating his trustee malfeasance by engaging in “legal
maneuvers” to hide William’s unauthorized distributions of trust
funds to himself. William paid Oldman’s legal fees with monies
from the Lee Trusts while William was committing trustee
malfeasance and breaching his trust duties. There were conflicts
19
of interest arising from Oldman’s concurrent representation of
William individually and as trustee, as well as Oldman’s previous
representation of other family members connected with the Lee
Trusts. Weshler submitted with her motion to disqualify a 16-
page declaration from attorney Rothschild detailing Oldman’s
actions that conflicted with its duties of loyalty and
confidentiality to the office of the trustee. As successor trustee,
she incurred legal fees in the probate action because of Oldman’s
acts and breaches.
The present action for malpractice and breach of fiduciary
duty, filed in October 2020, is based on factual allegations
Weshler asserted in her motion to disqualify Oldman, filed in
June 2017. Weshler knew the facts supporting all elements of
her causes of action (duty, breach, damages) in 2017, but she
waited more than a year to file this action. On its face, this
action is barred by the one-year statute of limitations in section
340.6.
Weshler contends this action is not time-barred because the
statute of limitations was tolled under various tolling provisions
in section 340.6. For the reasons explained below, we reject each
of these contentions.
IV. The Appeal of the Disqualification Order Did Not
Toll the Statute of Limitations or Preclude Weshler
From Filing This Action
As set forth above, the statute of limitations in section
340.6 is tolled while the “plaintiff is under a legal or physical
disability that restricts the plaintiff’s ability to commence legal
action.” (§ 340.6, subd. (a)(4).) Weshler contends such a legal
disability existed here during the time the disqualification order
was under review on appeal. We disagree.
20
When William’s estate appealed the disqualification order
as to Oldman, the disqualification was automatically stayed
under section 916, subdivision (a), which provides in pertinent
part: “[T]he perfecting of an appeal stays proceedings in the trial
court upon the judgment or order appealed from or upon the
matters embraced therein or affected thereby, including
enforcement of the judgment or order, but the trial court may
proceed upon any other matter embraced in the action and not
affected by the judgment or order.” Weshler argues the
automatic stay of the disqualification order in the probate action
precluded commencement of the present malpractice action under
section 356, which provides: “When the commencement of an
action is stayed by injunction or statutory prohibition, the time of
the continuance of the injunction or prohibition is not part of the
time limited for the commencement of the action.” There is
caselaw indicating an injunction or prohibition within the
meaning of section 356 constitutes a legal disability which tolls
the statute of limitations under section 340.6, subdivision (a)(4).
(See Bledstein v. Superior Court (1984) 162 Cal.App.3d 152, 161-
163; Jocer Enterprises, Inc. v. Price (2010) 183 Cal.App.4th 559,
570.)
“The purpose of the automatic stay provision of section 916,
subdivision (a) ‘is to protect the appellate court’s jurisdiction by
preserving the status quo until the appeal is decided. The
[automatic stay] prevents the trial court from rendering an
appeal futile by altering the appealed judgment or order by
conducting other proceedings that may affect it.’ ” (Varian
Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189
(Varian).) Further proceedings in the action are stayed where
they “directly or indirectly seek to ‘enforce, vacate or modify [the]
21
appealed judgment or order’ ” or “substantially interfere with the
appellate court’s ability to conduct the appeal.” (Id. at pp. 189-
190.) The automatic stay of the disqualification order preserved
the status quo regarding Oldman’s representation of William’s
6
estate in the probate action.
Weshler was not enjoined from filing the present action for
professional negligence and breach of fiduciary duty against
Oldman. Neither the automatic stay of the disqualification order
in the probate action (nor the stay of the probate action granted
at Linda’s request) prevented Weshler from filing this separate
action. (Cf. Hoover v. Galbraith (1972) 7 Cal.3d 519, 526, italics
added [“Where it is not possible to bring an action to trial pending
determination of an appeal in a related case, the time consumed
on such appeal is impliedly excluded from the period of
limitations”; judgment creditor could not bring suit to collect on a
judgment until the judgment was final, and the statute of
limitations to bring the action on the judgment was tolled while
the appeal from the judgment was pending].) Oldman’s
disqualification from representing William’s estate in the probate
action is not a prerequisite for Weshler’s causes of action for
6
Weshler claims Varian supports her position that the
automatic stay of the disqualification order in the probate action,
under section 916, prevented her from filing the present
malpractice action. Varian did not concern the effect of the
automatic stay on the filing of a separate action. Rather, Varian
addressed “whether the perfecting of an appeal from the denial of
a special motion to strike automatically stays all further trial
court proceedings on the merits upon the causes of action affected
by the motion” in that same action. (Varian, supra, 35 Cal.4th at
p. 186.)
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professional negligence and breach of fiduciary duty against
Oldman in the present action.
Weshler argues the Court of Appeal had exclusive subject
matter jurisdiction over attorney-client, breach of duty, and
conflicts issues (e.g., whether Oldman owed her duties as
successor trustee) while the automatic stay of the disqualification
order was in effect, and therefore she could not file a malpractice
action which embraced these issues until after the Court of
Appeal’s decision on the disqualification order was final. She
maintains that without the Court of Appeal’s opinion regarding
these issues, she would have no basis to assert causes of action
for professional negligence and breach of fiduciary duty against
Oldman. Not so. Weshler did not require an appellate opinion on
whether she had standing to bring a motion to disqualify Oldman
in the probate court and whether the probate court’s
disqualification of Oldman was proper before she could bring an
action against Oldman for malpractice and breach of fiduciary
duty.
Weshler’s preference to wait for a final Court of Appeal
decision on disqualification before she filed the present
malpractice action did not toll the statute of limitations in section
340.6. To the extent she was concerned about inconsistent
conclusions by different courts regarding Oldman’s duties to her
and Oldman’s conflicts of interest, she could have requested the
trial court stay her malpractice action pending resolution of the
appeal of the disqualification matter, after she filed the action
within the statute of limitations period. “[T]rial courts have
inherent authority to stay malpractice suits, holding them in
abeyance pending resolution of underlying litigation.” (Adams v.
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Paul (1995) 11 Cal.4th 583, 593; Coscia v. McKenna & Cuneo
(2001) 25 Cal.4th 1194, 1210-1211.)
V. Actual Injury
As set forth above, the statute of limitations in section
340.6 is tolled while the “plaintiff has not sustained actual
injury.” (§ 340.6, subd. (a)(1).) Actual injury constitutes “any loss
or injury legally cognizable as damages in a legal malpractice
action based on the asserted errors or omissions.” (Jordache
Enterprise, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th
739, 743 (Jordache).)
Here, actual injury occurred before the probate court
disqualified Oldman in 2017. In her motion to disqualify, filed in
June 2017, Weshler asserted William paid Oldman’s legal fees
with trust monies during the time William was engaging in
trustee malfeasance and Oldman was assisting him. As set forth
in her first amended complaint, Weshler seeks recovery of those
same legal fees—$38,150—as damages in the present action. She
also seeks to recover in this action “damages in protecting the Lee
Trusts from harm caused by [Oldman]’s acts and breaches,
including at least $300,000 in attorney fees and costs in an
amount to be proven at trial”—a substantial amount of which
was incurred by the time of Oldman’s disqualification in
November 2017.
Weshler argues the existence of actual injury from
Oldman’s professional negligence and breach of fiduciary duty
was “depend[ent] on how the Court of Appeal ruled” on
disqualification. In support of this argument, she quotes the
following language from Baltins v. James (1995) 36 Cal.App.4th
1193, 1196: “If the existence or effect of a professional’s error
depends on a litigated or negotiated determination’s outcome,
24
these decisions find actual injury occurs only when that
determination is made.” In Jordache, supra, 18 Cal.4th at page
761, our Supreme Court described the situation in Baltins v.
James as follows: “[T]he alleged negligence in Baltins v. James
was that the attorney predicted incorrectly how a court would
resolve an issue in the future. Thus, the propriety of the legal
advice, and hence the existence and effect of error, depended on
the future resolution of the issue adversely to the client.” Here,
in contrast, Weshler, as successor trustee, sustained actual injury
regardless of whether Oldman was disqualified from representing
William’s estate in the probate action.
Weshler posits that if the Court of Appeal concluded
Oldman owed no duties to her as successor trustee, she would not
be able to state a cause of action against Oldman for professional
malpractice or breach of fiduciary duty. Her speculation as to
how the Court of Appeal might rule on disqualification did not
toll the statute of limitations for the present action. As our
Supreme Court explained in Jordache: “Delaying recognition of
actual injury until related litigation concludes would give a client
who has sustained actionable damages, and who is aware of the
attorney’s error, unilateral control over the limitations period.
This result would undermine the Legislature’s purpose in
enacting a statute of limitations.” (Jordache, supra, 18 Cal.4th at
p. 755.) Moreover, “An existing injury is not contingent or
speculative simply because future events may affect its
permanency or the amount of monetary damages eventually
incurred.” (Id. at p. 754.)
VI. Continuous Representation Tolling
As set forth above, the statute of limitations in section
340.6 is tolled while the “attorney continues to represent the
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plaintiff regarding the specific subject matter in which the
alleged wrongful act or omission occurred.” (§ 340.6, subd. (a)(2).)
This tolling provision does not apply here.
The case on which Weshler relies in support of her
continuous representation tolling argument is inapposite. In
Kelly v. Orr (2016) 243 Cal.App.4th 940, 943, a successor trustee
sued a law firm and attorneys “for professional negligence in
relation to legal advice they provided to his predecessor trustee of
the [t]rust.” The trial court sustained the defendants’ demurrer
without leave to amend on the ground the action was barred by
the one-year statute of limitations in section 340.6. The Court of
Appeal reversed, concluding the statute of limitations was tolled
under section 340.6, subdivision (a)(2) until the alleged date that
the defendants ceased representation of the predecessor trustee
(in her capacity as trustee). (Id. at pp. 943, 944, 949, 951.)
Here, Oldman ceased representing the office of the trustee
of the Lee Trusts in 2015, when William died. Weshler, who
stood in the shoes of the predecessor trustee, retained different
counsel when she was appointed successor trustee in 2015.
Thereafter, Oldman represented William’s estate (Linda and
Marilyn)—Weshler’s adversary in the probate action Weshler
filed against the estate. As the Court of Appeal concluded in
affirming Oldman’s disqualification from representing Weshler’s
estate against Weshler in the probate action: Weshler, in her
capacity as successor trustee, stood in the shoes of the
predecessor trustee, and thus Oldman owed her “the duties owed
a former client—namely, duties of confidentiality and loyalty.”
(Weshler v. Rosensweig, supra, B287099, p. 9, italics added.)
There was no continuous representation of the office of the
trustee which would have tolled the statute of limitations.
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VII. Estoppel
Weshler contends Oldman is estopped (both judicially and
equitably) from asserting the statute of limitations defense here
because it took the position in the probate action that its
representation of William’s estate against the trust did not pose a
conflict of interest because Oldman had never represented
Weshler and there was no attorney-client relationship between
them, and Oldman had not received confidential information
from her. This argument lacks merit.
Judicial estoppel applies when: “(1) the same party has
taken two positions; (2) the positions were taken in judicial or
quasi-judicial administrative proceedings; (3) the party was
successful in asserting the first position (i.e., the tribunal adopted
the position or accepted it as true); (4) the two positions are
totally inconsistent; and (5) the first position was not taken as a
result of ignorance, fraud, or mistake.” (Jackson v. County of Los
Angeles (1997) 60 Cal.App.4th 171, 183.) The issue of whether
Weshler stood in the shoes of the predecessor trustee for purposes
of bringing an action for professional negligence and breach of
fiduciary duty was not decided in the probate action. To the
extent Oldman took the position that Weshler did not stand in
the former trustee’s shoes for any purposes, in arguing she did
not have standing to bring the motion to disqualify, Oldman was
not successful in asserting that position—Oldman lost and was
disqualified. Judicial estoppel does not apply.
Nor does equitable estoppel. “Among other things,
equitable estoppel requires a showing defendants’ conduct
‘actually and reasonably induced plaintiffs to forbear suing’
within the limitations period. [Citation.] Thus, when a
defendant’s conduct has deliberately induced the plaintiff to
27
delay filing suit, the defendant will be estopped from availing
himself of this delay as a defense.” (Bergstein, supra, 236
Cal.App.4th at p. 820.) Weshler’s assertion that Oldman—her
adversary’s counsel—deliberately induced her to delay filing this
malpractice action by taking a legal position in opposition to her
motion to disqualify is patently unreasonable. Her equitable
estoppel claim is not based on a concealment of information.
Weshler, who was represented by her own counsel, had all the
information she needed to make her own, informed legal
conclusion on the issue.
For the foregoing reasons, the trial court did not err in
sustaining Oldman’s demurrer to Weshler’s first amended
complaint without leave to amend. On the face of the complaint,
this action is barred by the one-year statute of limitations in
section 340.6. There is no possibility Weshler can amend to avoid
the time-bar.
DISPOSITION
The order of dismissal is affirmed. Respondents are
entitled to recover costs on appeal.
NOT TO BE PUBLISHED
CHANEY, J.
We concur:
BENDIX, Acting P. J. KELLEY, J.*
*Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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