Chaudhary v. Bartnof



















Filed 5/22/13 Chaudhary v. Bartnof CA 2/7













>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

>

California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.





IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND
APPELLATE DISTRICT



DIVISION
SEVEN




>

AMAN CHAUDHARY, Plaintiff and Appellant, v. HOWARD M. BARTNOF, et al. Defendants and Respondents.

B236833 (Los Angeles County Super. Ct. No. BC427084)

APPEAL from a judgment of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Soussan G. Bruguera, Judge. Reversed.

Kull and Hall and Kevin P. Hall, for
Plaintiff and Appellant.

Howard Bartnof, in pro. per., for
Defendants and Respondents.



_______________________



>

INTRODUCTION

Plaintiff Aman Chaudhary filed a href="http://www.fearnotlaw.com/">malpractice action alleging that Howard
Bartnof negligently advised his father to transfer three properties from a
family trust into a nonexistent sub-trust, thereby subjecting them to intestate
succession. After Aman’s father died,
his second wife filed a probate petition asserting a community property
interest in the three properties. Aman,
the sole beneficiary of the trust, settled the probate petition and pursued
this action.

Bartnof filed
a successful motion for summary judgment alleging that he owed no duty of care
to Aman. The trial court granted the
motion. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

>A.
>Factual Summary

On November 12, 1996, Vijendra and Sumitra
Chaudhary created the “Vijendra Pal Chaudhary and Sumitra Sarojani Chaudhary
Revocable Trust” (the Trust). The Trust
was funded with property listed in an attached “Schedule of Community Property
Assets,” which included, among other things, three residences located in California. Section 5.3 of the Trust provided that, upon
the death of the first spouse, any remaining assets were to be “distributed
outright to the surviving [spouse].”
Section 3.2 also authorized the surviving spouse to “amend, revoke or
terminate” the Trust in any manner.

Although the Trust did not name a beneficiary, it
permitted the surviving spouse to disclaim “[a]ny property or portion of
property,” which was then to be “administered or distributed according to the
terms of the Disclaimer Trust, as set forth in Article Six.” Article Six, in turn, provided that, on the
death of the surviving spouse, the assets of any Disclaimer Trust were to be
distributed to Aman Chaudhary, who was identified as the Vijendra and Sumitra’s
only child.

Sumitra died in 1998; Vijendra took no action related
to the Trust. In 2000, Vijendra married
Priscilla Raman-Chaudhary, who lived in href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Australia. Prior to their marriage, Priscilla and
Vijendrahref="#_ftn1" name="_ftnref1" title="">[1]
signed a prenuptial agreement stating,
in part: “The parties . . . . intend all property owned by either of them at
the time of the marriage, and all additional property of any nature which
either of them acquires after marriage, shall be the separate property of the
party who receives and owns that property.”

In 2008, Vijendra attempted to refinance a residence
held in the Trust, which was located on Stagg Street, in Canoga Park, California (Stagg Street residence). Because the lender would not refinance the
property until Sumitra’s name had been cleared from the title, on September 24, 2008, Vijendra met with Howard Bartnof to discuss how to
clear the title of the residence. During
the meeting, Vijendra informed Bartnof that he wanted Aman to receive all of
the Trust assets. He further explained
that he did not intend Priscilla to obtain any Trust assets because she had
signed a prenuptial agreement and had her own property. Bartnof informed Vijendra that he would “read
the trust in order to determine how to prepare the deeds” necessary to clear
the title. In the course of reviewing
the Trust, however, Bartnof discovered that it “called for certain things to happen
[upon] . . . the death of the first spouse” and “had some [additional]
problems” that he believed Vijendra should address. Thereafter, Vijendra agreed
to allow Bartnof to “advise him with respect to . . . rectifying any problems
with the [T]rust.”

On October 6, 2008, Bartnof sent Vijendra a
letter with three documents that were described in the letter as follows:

“1. Affidavit – Death of Trustee: This is to
remove your wife’s name from title, as a result of her death, so that all
future documents can be signed by you alone.

2. Quitclaim Deed: Pursuant to the terms of the Trust, at the
death of the first spouse, the property is to be allocated between the
survivor’s sub-trust and the survivor individually, outright and free of
trust. Since you are the surviving
spouse, this deed allocates one-half to your sub-trust and your wife’s share to
you, outright and free of trust.

3: Quitclaim Deed: In order to handle the refinancing that you
are arranging, all of the title has to be out of the trust and in your name
alone. Since you own, individually, an
undivided one-half interest from the deed just above, this deed transfers your
share from your sub-trust out to you, individually outright and free of trust.”


The letter directed Vijendra to sign and notarize the
documents, and then “forward [them] directly to [the] lender [to] record them
as part of the refinancing arrangements.”
The letter advised Vijendra that “once these documents are recorded,
title to this property will not be in your trust – it will be in your name only
and, if you pass away, it would be subject to probate administration. I have not prepared a deed transferring the
house back into your share of the Trust because I have read the Trust and I do
not find any provisions for distributions to anyone from your share of the
Trust. Therefore, until there are
amendments or some other arrangement made, after your death, the Trust would
have to go into court to determine who would be the appropriate beneficiary. Further since you have remarried, there needs
to be some mention, one way or another, about your current spouse. These deeds take care of your immediate needs
for the refinancing but we need to discuss further the status of the Trust
before title of your home is transferred back to this Trust.”

On November 22, 2008, Vijendra sent Bartnof a
hand written-letter stating: “I am
sending you copies of documents we recorded.
I have also enclosed samples of what I got at work. I need to have the property back in the trust
and whatever else has to be done.”
Vijendra attached recorded copies of the affidavit of death and the two
quit claim deeds that Bartnof had provided in the October 2 letter. Vijendra also attached two documents related
to the Trust. The first document was a
draft of a Trust “amendment” naming Aman as the sole beneficiary. The second document was a draft of a
“statement of disclaimer” waiving any property rights that Priscilla might have
in the Trust.

On December 2, 2008, Bartnof sent Vijendra a
letter accompanied by seven documents that Vijendra was instructed to sign and
notarize. The first document was a
quitclaim deed transferring title to the Stagg Street property, which was
currently held by Vijendra in his individual capacity, “back into the
Survivor’s Sub-Trust.” The remaining six
documents pertained to the other two properties in the Trust which were located
on Nestle Avenue and Malden Street. For each property, Bartnof provided three
documents: an affidavit of death that
was intended to “remove [Sumitra’s] name from title . . . so that all future
documents [related to the property could] be signed by [Vijendra] alone;” a
quitclaim deed transferring title of Sumitra’s half-interest in each property
from the Trust to Vijendra “outright and free of trust,” and transferring
Vijendra’s half-interest in each property from the Trust to his “Survivor’s
Sub-Trust;”href="#_ftn2" name="_ftnref2"
title="">[2]
and a second quitclaim deed for each property transferring title to the
half-interest held by Vijendra in his individual capacity “back into the Survivor’s
sub-trust.”

The letter also stated that, after Vijendra
“return[ed] the documents,” Bartnof would “see that they are properly recorded
. . . . [¶] After these documents are recorded, 100% of the title to these
three properties will be in the Survivor’s Sub-Trust and, therefore part of
your estate. Please make sure that you
contact me and let me know how your (the Survivor’s Sub-Trust) share of the
Trust should be amended/updated as we discussed the telephone.”

Bartnof’s notes from a December 4th phone call
indicate that Vijendra informed Bartnof he would send the documents to the
recorder’s office himself and that Bartnof approved. The documents were recorded on December
9. At some point after the December 4th
phone call, Vijendra informed Bartnof that he was traveling to Australia to visit Priscilla and
provided him with copies of two signed, notarized documents with the caption
“Second Amendment to Vijendra Pal Chaudhary and Sumitra Sarojani Chaudhary
Revocable Living Trust.” The documents –
which were signed and executed on October 29, 2008 and November 25, 2008
respectively – contained identical text stating that because the Trust did not
currently name a beneficiary, Vijendra had elected to exercise his “powers . .
. to change or amend the trust” by naming Amar as its sole beneficiary. The only differences between the executed
documents was the content of the notary’s acknowledgment; the acknowledgement
in the November 25th document stated that the notary’s statements were made
under the penalty of perjury while the October 29th document did not.

Bartnof reviewed the two executed “Second Amendments”
and advised Vijendra they were “poorly drafted and worded” because they “le[ft]
the property in trust in perpetuity for Aman.”
Bartnof also advised that the October 29th version of the
amendment had “an improper notary jurat” that was “corrected” in the November
25th version. Vijendra did not alter either of the executed
amendments and left the country for Australia.
He died shortly after his return, without having any further
conversations with Bartnof.

On February 3, 2009, Priscilla sent Bartnof a letter
requesting copies of the “testamentary documents” and various personal items
that had been in Vijendra’s possession.
Aman, who was aware Bartnof had been advising his father, retained
Bartnof to “assist in dealing with” Priscilla’s requests and in administering
the Trust. On February 23, Priscilla’s
attorney sent a fax reiterating her request for a copy of the testamentary
documents, which Bartnof provided on February 26.

Approximately one week later, Priscilla filed a
probate petition asserting a community property interest in Vijendra’s estate,
including the Stagg Street property and the share of the other Trust properties
that had been transferred first to Vijendra, and then to the “survivor’s
sub-trust.” Priscilla claimed, in
relevant part, that “the effect of the attempted transfers to the . . .
Survivor’s Sub-Trust . . . fail and are a nullity because such a sub-trust does
not exist and has never existed . . . and because the trust, itself, had
terminated” upon the death of Sumitra.
Priscilla further alleged that because the transfers were ineffective,
Vijendra’s interest in the Stagg Street, Malden Street and Nestle Avenue
properties were to pass as if he had died intestate. The petition included numerous additional
claims related to Vijendra’s estate, including allegations that: (1) the
prenuptial agreement was unenforceable; (3) Priscilla qualified as a
pretermitted spouse; and (3) the Second Amendment naming Aman as the sole
beneficiary to the Trust had been forged.


After Priscilla filed her
petition, Bartnof informed Aman he could no longer represent him in the probate
proceedings. Aman retained a new
attorney and, in August of 2009, entered into a settlement with Priscilla under
which she was granted title to the Stagg Street residence.

>B.
>Summary of Aman’s Complaint

In 2010, Aman filed a complaint against Bartnof for href="http://www.mcmillanlaw.com/">“professional negligence” arising from
his representation of Vijendra.href="#_ftn3"
name="_ftnref3" title="">[3] The complaint asserted that, “as the lawyer[]
and advisor[] to Vijendra, [Bartnof] owed [a] dut[y] of care to Aman as the
only named beneficiary of the Trust.” It
further asserted that Bartnof had breached this duty by, among other things:
(1) advising Vijendra to transfer portions of the Trust assets to a “Survivor’s
Sub-Trust” that did not exist; (2) failing to advise that if “Vijendra
transferred the properties to the Survivors Sub-Trust, he was at risk that the
properties would pass by intestacy and that Priscilla would have a claim to the
properties or an interest therein”; (3) failing to prepare a new trust, an
amended trust or a “Survivor’s Sub-Trust”; and (4) failing to advise that the
Trust called for the Trust assets to be distributed outright to the surviving
spouse upon the death of the first spouse.


The complaint also alleged
claims for professional negligence and breach of fiduciary duty arising from
Bartnof’s representation of Aman in the probate proceedings against
Priscilla. Both claims were predicated
on Bartnof’s alleged failure to respond to Priscilla’s requests in a timely
manner or to follow Aman’s instructions to deliver Priscilla’s personal effects
to her counsel. Aman alleged that this
conduct caused Priscilla to file the probate petition, which Aman had been
forced to incur legal fees to defend.

>C.
>Bartnof’s Motion for Summary Judgment

>1.
Summary
of Bartnof’s motion for summary judgment and evidence submitted in support
thereof

On May 27, 2011, Bartnof filed a motion for summary
judgment arguing that he did not owe Aman a duty of care arising out of the
legal services provided to Vijendra.
Although Bartnof conceded that an attorney may owe “a duty of care to an
intended beneficiary of a will or trust,” he asserted that such a duty applied
only where the attorney had “drafted the wills or trusts . . . in which the
plaintiff was expressly named as a beneficiary.” Bartnof contended that because the undisputed
evidence showed he had merely advised Vijendra in regards to the existing
testamentary documents, “as a matter of law, [he] did not owe a duty of care to
Aman.”

Bartnof also argued that he owed Aman no duty in
drafting the letters and quitclaim deeds referencing the nonexistent
“Survivor’s Sub-Trust,” arguing: “Aman contends that Bartnof’s negligence
consists of writing a letter to Vijendra regarding one method of amending a
revocable, amendable trust by establishing two sub-trusts. [¶] The flaw in such
an argument is that a letter referencing a ‘Survivor’s Sub-Trust’ in
anticipation of amending a trust is not the equivalent of drafting a
testamentary document. Nor were
Quitclaim Deeds, drafted by Bartnof . . . testamentary documents.” Bartnof further asserted that he had intended
to create a new “Survivor Sub-Trust,” but was “explicitly” told “not to do
anything” until Vijendra returned from his trip. Vijendra, however, died before Barntof
completed preparing the new trusts.

Bartnof also argued he was entitled to summary judgment
because, in addition to “being unable to establish the existence of a duty,
Aman[] . . . cannot establish that [the] alleged negligence caused him to
suffer any damages.” The entire argument
on this issue consisted of a single paragraph with no citations to the
evidence: “Aman will never be able to establish the element of causation for
one reason. He cannot establish that the
probate court would have granted [Priscilla’s] . . . petition. Aman and Priscilla settled the case solely to
mitigate his losses and to stop paying legal fees, even though Aman had
very strong arguments in his favor. Aman’s settlement with his step-mother was
not foreseeable by Bartnof. Aman will
never be able to show what Priscilla . . . would have done, regardless of what
Bartnof had done or failed to do all of which is pure speculation.” Bartnof argued Aman was also incapable of
establishing causation on the claims arising from his representation in the
probate proceedings because there was no evidence Priscilla filed the petition
based solely on Bartnof’s 23 day delay
in sending the requested testamentary documents and personal effects.

In support of his motion, Bartnof filed a declaration
asserting that he was hired by Vijendra to “prepare an Affidavit . . . . removing
[Sumitra] as a trustee from the [Trust] and Quitclaim Deeds transferring the
title of Vijendra’s residence . . . from the Trust into Vijendra’s name as his
sole property for the purpose of refinancing the [Stagg Street] property.” Bartnof alleged that, in the course of
reviewing the Trust, he identified “several problems . . . which [he] verbally
brought to Vijendra’s attention.”
Bartnof stated that, after sending the December 2 letter, he received
the executed Second Amendments to the trust and “verbally told Vijendra that
[they] were ‘poorly drafted and worded.’”
Vijendra, however, told him “not to do anything” until he came back from
Australia and then died “having never contacted [Bartnof] to let him know how
he wanted the trust updated or amended.”


Bartnof also submitted href="http://www.fearnotlaw.com/">deposition testimony in which he admitted
Vijendra had stated that he wanted all three of the properties to remain within
the Trust. Bartnof also testified that
the “Survivor’s Sub-Trust” was a new trust he had intended to create within the
existing Trust. Bartnof contended that
Vijendra was authorized to amend the Trust pursuant to section 3.2, thereby
permitting him to establish the Survivor’s Sub-trust . . .” Bartnof, however, stated he was “prevented
from completing Vijendra’s estate plan due to [Vijendra’s] unexpected
death.”

>2.
Summary of Aman’s opposition

In his opposition, Aman argued that Bartnof owed him a
duty of care when advising Vijendra on Trust matters because Aman was the named
beneficiary of the Trust. According to
Aman, the case law made clear that “where the settlor . . . expresses his or
her intentions in a signed testamentary document . . . the attorney owes a duty
of care to the designated beneficiaries.”
Aman further contended that Bartnof had provided no authority in support
of his “conten[tion] that an estate planning attorney is never liable to a
beneficiary for giving bad advice to a client unless the attorney also drafted
the testamentary documents.” Rather,
according Aman, “[i]t is sufficient that testator retained the attorney and
formally identified the beneficiary.”
Aman also argued that the evidence showed Bartnof had aided Vijendra in
drafting the trust instruments in so far as he reviewed and provided advice
about the content of the executed, Second Amendment.

Aman also argued that
Bartnof had failed to demonstrate that there were no disputed issues of
material fact on the issue of causation, which Aman characterized as a “a
question . . . for the jury . . . unless the evidence is so clear that no
reasonable person could disagree with it.”
Aman contended Bartnof had introduced no argument or evidence showing
that Priscilla’s probate claims would have failed in the absence of the
settlement.

>D.
>Trial Court’s Order Granting the Motion for Summary
Judgment

After hearing argument, the trial court issued a
written order granting the motion for summary judgment, finding that Bartnof
had made a preliminary showing that Aman could not establish that he was owed a
duty of care in relation to legal services provided to his father, shifting the
burden to plaintiff to demonstrate a triable issue of material fact.

The court concluded that Aman had failed to meet this
burden, explaining: “[A prospective
beneficiary] cannot maintain a cause of action for legal malpractice against
the attorney who drafted the will but did not have it executed before the death
of the testator.’ [Citation.] In the instant case, the evidence shows that
Defendant did not draft the Trust or the Second Amendments. . . . Instead, the
evidence shows the Second Amendments were sent to Defendant >after they had already been >drafted and executed by Vijendra.” [Emphasis in the original.] The trial court specifically rejected Aman’s
assertion that an attorney could owe a duty of care to a beneficiary “even if
he did not draft the testamentary documents.”
According to the court, the “cases cited by Plaintiff . . . all
involve[d] situations where the attorney drafted the testamentary documents at
issue. In the instant case . . . the
evidence shows Defendant did not draft the Trust or Second Amendments.”

The court further concluded that “the fact that
[Bartnof] drafted the Quitclaim Deeds is not enough to create a triable issue
of material fact, even where the Deeds referred to a non-existent ‘Survivors
Sub Trust.’” In support, the court cited
case law holding that a quitclaim deed transferring property to a trust not in
existence at the time the deed was still valid if it was executed in anticipation
of the creation of the trust, and the trust was actually established at some
point thereafter. The court also noted
that the evidence indicated that Vijendra had “recorded the Quitclaim Deeds
(and Affidavit) instead of returning them to Defendant as instructed, and . . .
died before contacting Defendant to let him know how he wanted the Trust
amended or updated.”

On September 23, 2010, the trial court entered a
judgment in favor of Bartnof. Aman filed
a timely appeal.

DISCUSSION

>A. >Standard
of Review

“‘The
standard for deciding a summary judgment motion is well-established, as is the
standard of review on appeal.’
[Citation.] ‘A defendant moving
for summary judgment has the burden of producing evidence showing that one or
more elements of the plaintiff’s cause of action cannot be established, or that
there is a complete defense to that cause of action. [Citation.]
The burden then shifts to the plaintiff to produce specific facts
showing a triable issue as to the cause of action or the defense. [Citations.]
Despite the shifting burdens of production, the defendant, as the moving
party, always bears the ultimate burden of persuasion as to whether summary
judgment is warranted. [Citations.]’
[Citation.].” (>Hypertouch, Inc. v. ValueClick, Inc. (2011)
192 Cal.App.4th 805, 817 (Hypertouch).)

“‘On appeal, we review de novo an order granting summary
judgment. [Citation.] The trial court must grant a summary judgment
motion when the evidence shows that there is no triable issue of material fact
and the moving party is entitled to judgment as a matter of law. [Citations.]
In making this determination, courts view the evidence, including all
reasonable inferences supported by that evidence, in the light most favorable
to the nonmoving party. [Citations.]’ [Citation.]”
(Hypertouch, supra, 192
Cal.App.4th at p. 818.)

>B. >The
Trial Court Erred in Concluding That Bartnof Owed No Duty of Care to Aman When
Advising Vijendra on Matters Related to the Trust

>1.
The
Law Regarding Liability for Negligence in Estate Planning to Intended or
Potential Beneficiaries

“To state a cause of action for legal malpractice, a
plaintiff must plead ‘(1) the duty of the attorney to use such skill, prudence,
and diligence as members of his or her profession commonly possess and
exercise; (2) a breach of that duty; (3) a proximate causal connection between
the breach and the resulting injury; and (4) actual loss or damage resulting
from the attorney's negligence.’
[Citation.] ‘“‘A key element of
any action for professional malpractice is the establishment of a duty by the
professional to the claimant. Absent
duty there can be no breach and no negligence.’”’ [Citation.] Whether a lawyer sued for professional
negligence owed a duty of care to the plaintiff ‘is a question of law and
depends on a judicial weighing of the policy considerations for and against the
imposition of liability under the circumstances.’ [Citations.]”
(Chang v. Lederman (2009) 172
Cal.App.4th 67, 76 (Chang).)

>a.
The
Biakanja and Lucas Decisions

“[U]ntil
1958, California followed the traditional view that a nonclient could not
maintain an action against an attorney for malpractice.” (Osornio v. Weingarten (2004) 124 Cal.App.4th 304,
320 (Osornio).) This “strict privity test for professional
liability was rejected in Biakanja [>v. Irving (1958) 49 Cal.2d 647 (>Biakanja)], in which the Supreme Court
considered the liability of a notary public who had negligently allowed the
will of the plaintiff’s brother, which left the entire estate to the plaintiff,
to be improperly attested. As a result,
the plaintiff received only his one-eighth intestate succession share of the
estate.” (Chang, supra, 172
Cal.App.4th at p. 77.) The Court
explained that “[t]he determination whether in a specific case the defendant
will be held liable to a third person not in privity is a matter of policy and
involves the balancing of various factors, among which are the extent to which
the transaction was intended to affect the plaintiff, the foreseeability of
harm to him, the degree of certainty that the plaintiff suffered injury, the
closeness of the connection between the defendant’s conduct and the injury
suffered, the moral blame attached to the defendant’s conduct, and the policy
of preventing future harm.” (>Biakanja, supra, 49 Cal.2d at p.
650.)

In Lucas v. Hamm (1961) 56 Cal.2d 583 (Lucas), “the Supreme Court faced a similar question of duty to
intended beneficiaries, but in the context of an attorney’s negligence. The beneficiaries sued the attorney who
drafted the will and codicils in a manner that caused the instruments to fail
because they ran afoul of statutory restraints on alienation and the rule
against perpetuities. . . . [Citation.]”
[¶] “[T]he 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.”
(Osornio, supra, 124
Cal.App.4th at p. 321.) “Because the
defendant in Lucas was an attorney,
however, in addition to the Biakanja
factors the court held it was necessary to consider ‘whether the recognition of
liability to beneficiaries of wills negligently drawn by attorneys would impose
an undue burden on the profession.’
[Citation.]” (>Chang, supra, 172 Cal.App.4th at p. 77.)


The court concluded
that all of the Biakanja factors
weighed in plaintiffs’ favor, explaining that the main purpose of the
transaction – drafting a will – was to transfer
property to the plaintiffs; it was foreseeable that plaintiffs would be
harmed if the bequest was determined to be invalid; the harm would not occur
but for defendant’s negligence; denying recovery would impair the policy of
preventing future harm because no other parties could assert claims against the
attorney; and the imposition of liability to named beneficiary’s would not
place an undue burden on the profession.


>b.
Subsequent
case law refining the duty of lawyers to intended beneficiaries

The >Biakanja and Lucas principles, “which originated in cases involving the
negligent drafting or execution of wills,” have since been extended to other
testamentary instruments, including trusts.
(See Bucquet v. Livingston
(1976) 57 Cal.App.3d 914, 922 [concluding that there was no rational basis for
distinguishing a trust and a will for purposes of recognizing the drafting
lawyer’s duty of care to intended beneficiaries].) It is now well-established that an attorney
may be held liable to the beneficiary if:
(1) the attorney’s professional negligence frustrates the testamentary
intent in a legal instrument, and (2) the “beneficiaries clearly designated by
the testator lose their legacy as a direct result of such negligence.” (Ventura
County Humane Society v. Holloway (1974) 40 Cal.App.3d 897, 903.)

In >Radovich v. Locke–Paddon (1995) 35
Cal.App.4th 946, however, the court declined to extend the Biakanja line of cases to a “malpractice claim of a >potential beneficiary identified in an >unsigned will.” (Osornio,
supra, 124 Cal.App.4th at p. 324, italics in original.) The decedent in Radovich executed a will that provided trust income to her husband
and her sister. Prior to her death, the
decedent met with her attorney to discuss drafting a new will that would
increase her husband’s bequest. The
decedent died without executing a new will and the husband filed a malpractice
action against the attorney.

The court
held that, under such circumstances, the attorney owed the plaintiff no duty of
care. The court distinguished prior
cases in which the will or trust at issue had actually been executed,
explaining that there were “both practical and policy reasons for requiring
more evidence of commitment than is furnished by a direction to prepare a will
containing specified provisions. From a
practical standpoint, common experience teaches that potential testators may
change their minds more than once after the first meeting. . . . From a policy standpoint, we must be
sensitive to the potential for misunderstanding and the difficulties of proof
inherent in the fact that disputes such as these will not arise until the
decedent --the only person who can say what he or she intended -- has
died. Thus we must as a policy matter
insist on the clearest manifestation of commitment the circumstances will
permit.” (Radovich, supra, 35 Cal.App.4th at p. 964.)

The same
court that decided Radovich reached a
different conclusion in Osornio, >supra, 124 Cal.App.4th 304, which
involved a bequest that failed as the result of statutes imposing conditions on
transfers to care custodians. The
decedent executed a will naming her care custodian as the sole beneficiary of
her estate. The care custodian filed a
malpractice action alleging that the attorney who drafted the will negligently
failed to advise the decedent that her intended beneficiary would be a
presumptively disqualified donee, and failed to take appropriate measures
ensuring that the testator’s wishes would be carried out. The court held that, unlike in >Radovich, there was no ambiguity as to
the decedent’s donative intent; the attorney, in turn, had failed to take the
actions necessary to carry out that intent.

Finally, in
Chang, supra, 172 Cal.App.4th 67, this Division considered whether an
attorney owed a duty of care to a beneficiary of an executed trust who claimed
“that the testator intended to revise [the] . . . estate plan to increase the
gift to the beneficiary.” (>Id. at p. 72.) The decedent in Chang retained an attorney to prepare a revocable trust
approximately six months before he married the plaintiff. The executed trust provided plaintiff with
distributions of $30,000 in addition to some personal property. Five or six months after the marriage, when
decedent was seriously ill, he instructed the attorney to revise his trust to
leave the entire trust estate to plaintiff.
The attorney refused to do so and the decedent died without making any
further amendments to his trust.
Plaintiff then sued the attorney for professional negligence.

After
conducting a thorough survey of prior cases analyzing an attorney’s duty to
intended beneficiaries, Chang
concluded an enforceable duty of care was generally found to apply where “the
wills or trusts did not fail because of any defect in the expression of the
testator’s intent, but because of some failure either in other language of the
instrument or in the circumstances of its execution. [¶]
Conversely, when the claim . . . is that a will or trust, although
properly executed and free of other legal defects, did not accurately express
the testator’s intent, no duty or liability to the nonclient potential
beneficiary has been recognized. That
is, where there is a question about whether the third-party beneficiary was, in
fact, the decedent's intended beneficiary – where intent is placed in issue –
the lawyer will not be held accountable to the potential beneficiary.” (Chang,
supra, 172 Cal.App.4th at p. 82.)

>Chang also agreed with >Radovich’s observation that extending
the “duty of care to unnamed potential beneficiaries” would “‘impose an undue
burden on the profession’” because “any disappointed potential beneficiary –
even a total stranger to the testator – could [assert similar] factual
allegations.” (Chang, supra, 172 Cal.App.4th at pp. 83-84.) In the court’s view, “without a finite,
objective limit on the identity of individuals to whom they owe a duty of care,
the burden on lawyers preparing wills and trusts would be intolerable.” (Id.
at p. 84.)

Finally, >Chang concluded that these same concerns
precluded a named beneficiary from “assert[ing] a legal malpractice claim not
on the ground her actual bequest . . . was improperly perfected but based on an
allegation the testator intended to revise his or her estate plan to increase
that bequest and would have done so but for the attorney’s negligence. Expanding the attorney’s duty of care to
include actual beneficiaries who could have been, but were not, named in a
revised estate plan, just like including third parties who could have been, but
were not, named in a bequest, would expose attorneys to impossible duties and
limitless liability because the interests of such potential beneficiaries are
always in conflict. [Citation.] Moreover, the results in such lawsuits, if
allowed, would inevitably be speculative because the claim necessarily will not
arise until the testator or settlor, the only person who can say what he or she
intended or explain why a previously announced intention was subsequently
modified, has died.” (Chang, supra,
172 Cal.App.4th at p. 86.)

>2.
The
Trial Court Erred in Finding that Bartnof Did Not Owe Aman a Duty of Care

>a.
An
attorney retained to advise a settlor on matters related to a pre-existing
trust may owe a duty of care to the named beneficiaries

Aman argues
that the trial court erred in concluding that a named beneficiary may not
pursue a professional negligence claim against an attorney who did not draft
the legal instrument describing the testator or settlor’s intended
bequest. Bartnof does not dispute the
following facts: (1) Bartnof was
retained by Vijendra to ensure the three properties in the Trust had a clear
title; (2) Vijendra informed Bartnof
that he wanted all three of the properties to remain in the Trust and that he
intended Aman to receive all of the Trust assets; (3) Vijendra provided Bartnof a draft of an
amendment naming Aman as the sole beneficiary of the Trust and later provided
signed and notarized amendments naming Aman as the sole beneficiary; (4) Bartnof reviewed the executed amendments and
advised Vijendra that he believed they were improperly worded; (5) Bartnof prepared a set of quitclaim deeds
transferring a portion of the Trust properties from the Trust to Vijendra, in
his individual capacity, and then from Vijendra to a non-existent “Survivor’s
Sub-Trust”; (6) Bartnof authored a
letter informing Vijendra that once the quitclaim deeds were recorded, “100% of the title to these
three properties” would be in a “Survivor’s Sub-Trust” within the Trust. We conclude that, under these facts, Bartnof
owed a duty of care to Aman

As the
trial court correctly observed, in all of the published cases finding that an
attorney owed an enforceable duty of care to an express beneficiary, the
attorney-defendant drafted the testamentary instruments describing the
beneficiary’s bequest. We are not aware
of any decision, however, that has specifically considered the issue presented
here: whether an attorney retained to
provide advice regarding a pre-existing trust and a subsequently-drafted
amendment naming the beneficiary owes a duty of care to that beneficiary. We conclude that an attorney in Bartnof’s
position does owe a duty of care to an express beneficiary where, as here,
there is no dispute as to the settlor’s intent.


First, the rationale underlying the
Biakanja line of cases apply equally
whether the attorney was retained to draft a trust instrument in the first
instance or provide advice regarding an instrument that was initially drafted
by another party. In >Heyer v. Flaig (1969) 70 Cal.2d 223,
disapproved on other grounds in Laird v.
Blacker (1992) 2 Cal.4th 606, 617, which “reaffirmed the basic principles
of Biakanja and Lucas” (Chang, supra, 172
Cal.App.4th at p. 78), the Supreme Court explained: “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.” (>Heyer, supra, 70 Cal.2d at p. 228.)

Although Bartnof did not personally
draft the Trust or the Second Amendment, he was nonetheless retained to advise
Vijendra what actions were necessary to preserve the intent expressed in those
instruments (i.e., how to clear the titles to the properties without removing
them from the Trust, the assets of which were to pass to Aman). He also reviewed an executed amendment naming
Aman as the beneficiary and provided advice regarding the amendment’s
wording. It was therefore foreseeable
that Bartnof’s acts and omissions would affect Aman’s interests.

Second,
prior decisions have recognized an enforceable duty of care where the
beneficiary’s claims were not predicated on the manner in which the instrument
was drafted, but rather on the attorney’s failure to advise the testator of
some fact that might frustrate the bequest described in that instrument. For example, in Osornio, 124 Cal.App.4th 304, the alleged negligence was the
lawyer’s failure to advise the testator that his intended beneficiary was
presumptively disqualified under the Probate Code, and to advise taking the
necessary steps to avoid disqualification.
The court concluded that the attorney had breached a duty of care owed
to the beneficiary by failing to advise the testator of the “appropriate
actions” necessary to “carry out the . . . wishes[] that were expressed and
formalized in [the] signed will.” (>Osornio, 124 Cal.App.4th at p. 336.)

Similarly,
in Garcia v. Borelli (1982) 129
Cal.App.3d 24 (Garcia), the
beneficiaries of a will asserted negligence in failing to advise that property
held in joint tenancy would in fact be treated as community property following
his death. The dispute between the testator’s
second wife and the residual beneficiaries resulted in a settlement in the
probate action and a malpractice claim.
Thus, as in Osornio, the
beneficiaries’ claims were not directly predicated on the manner in which the
will had been drafted, but rather on the failure of the attorney to advise the
testator of other facts that might frustrate the testator’s expressed
intent. The court concluded that, under
such circumstances, the beneficiaries were owed a duty of care. (Garcia,
supra, 129 Cal.App.3d at p. 32.)

Aman’s
claims are similar to those asserted in Osornio
and Garcia. Aman contends that Bartnof, who was retained
to provide advice regarding the Trust and the subsequently-drafted Second
Amendment, negligently failed to inform Vijendra that Trust assets transferred
to himself, and then to a non-existent survivor’s sub-trust, might be subject
to intestate succession. While it is
true that the defendants in Osornio
and Garcia drafted the legal
instrument describing the testator’s intent, this distinction is
immaterial. In both cases, the
plaintiffs’ claims arose not from the text of the instrument itself, but rather
from the attorneys’ failure to properly inform their clients what actions were
necessary to effectuate the intent expressed in the instrument.

Third, Aman’s claims do not raise
the sort of questions that normally preclude a prospective beneficiary from
pursuing a professional negligence against the attorney of the testator or
settler. As explained in >Chang, courts have generally recognized
an enforceable duty of care where “the wills or trusts did not fail because of
any defect in the expression of the testator’s intent, but because of some
failure either in other language of the instrument or in the circumstances of
its execution.” (Chang, supra, 172 Cal.App.4th at p. 82.) On the other hand, courts have generally
declined to recognize any duty where there are issues as to the decedent’s
intent. (Ibid.) Aman’s claims fall
into the former category. The parties do
not dispute that Vijendra intended Aman to receive all of the Trust assets (as
expressed in the executed Second Amendment Bartnof reviewed and provided advice
about) and that Vijendra intended the three properties to remain in the
Trust. Aman claims, however, that
Bartnof frustrated this intent by negligently advising Vijendra that he could
clear the title to the Trust properties by transferring them to himself, in his
individual capacity, and then into a non-existent Survivor’s Trust. Aman’s claims therefore raise no questions as
to whether he was an intended beneficiary, but rather whether Bartnof
negligently advised Vijendra in a manner that frustrated the undisputed intent
exhibited in the documents Bartnof was retained to review (the Trust and the
Second Amendment).

Finally, applying the six factor
balancing test articulated in Biakanja/Lucas
weighs in favor of extending the duty of care under the circumstances
presented here. (See generally >Osornio, supra, 124 Cal.App.4th at pp.
330-333 [applying six factor test to determine whether attorney owed duty of
care in failing to advise testator that the intended beneficiary was a
presumptively disqualified donee].) “To
reiterate, these factors are: ‘[1] the extent to which the transaction was
intended to affect the plaintiff, [2] the foreseeability of harm to him, [3]
the degree of certainty that the plaintiff suffered injury, [4] the closeness
of the connection between the defendant's conduct and the injury ... [5]
the policy of preventing future harm’ ... and [6] ‘whether the recognition of
liability to beneficiaries of wills negligently drawn by attorneys would impose
an undue burden on the profession.’” (>Id. at p. 330 [quoting >Lucas, supra, 56 Cal.2d at p. 588.)href="#_ftn4" name="_ftnref4" title="">[4]

The first and second factors
clearly weigh in Aman’s favor. The
parties do not dispute that Vijendra instructed Bartnof to clear the title to
the properties while keeping them in the Trust, and that Bartnof advised
Vijendra about the wording of the executed amendment naming Aman as the Trust
beneficiary. The transaction was thus
intended to affect Aman and it was foreseeable that Bartnof’s failure to
exercise due care in carrying out his duties might injure Aman.

The fifth factor – “the policy of
preventing future harm” – also weighs in favor of imposing an extended duty of
care on attorneys retained to review and provide advice in regards to an
existing trust instrument and a subsequent, executed amendment naming the trust
beneficiary. If named beneficiaries “are
deprived of the right to suit against the attorney responsible for the failure
of the intended [testamentary transfer], no one would be able to bring such
action. . . . [¶] The imposition of duty . . . would thus promote public
policy: it would encourage the competent practice of law by counsel representing
testators, trustors, and other clients making donative transfers.” (Osornio,
supra, 124 Cal.App.4th at pp. 332-333; see also Chang, supra, 172
Cal.App.4th at p. 83.)

The sixth factor is not implicated
because extending the duty of care in this case will place no undue burden on
the profession. Courts have generally
declined to extend the duty of care where doing so would either subject the
attorney to a potentially “limitless” class of plaintiffs (i.e., third parties
who claim that they should have been, but were not named in a bequest) or
“compromise an attorney’s primary duty of undivided loyalty to his or her
client” (i.e., extending the duty of care in instances where an express
beneficiary alleges the testator intended to bequeth more than the instrument
describes). (Radovich, supra, 35 Cal.App.4th at p. 965.) Under the circumstances of this case, the
attorney’s duty of care remains narrowly circumscribed to the client and any
beneficiary expressly named in the trust instruments.

The third and fourth factors – the
degree of certainty that the plaintiff suffered injury and the closeness of the
connection between the defendant’s conduct and the injury – are largely
duplicative of the causation element applicable to a cause of action for legal
malpractice. (See Chang, supra, 172 Cal.App.4th at p. 76 [“To state a cause of action
for legal malpractice, a plaintiff must plead ‘. . . (3) a proximate causal
connection between the breach and the resulting injury’”].) Aman alleges that Bartnof’s conduct –
informing Vijendra that transferring the properties first to himself, and then
to a nonexistent survivor’s sub-trust, would place the properties back within
the Trust – directly caused his injuries.
As discussed in more detail below, although Bartnof disputes these
allegations, we cannot resolve this factual dispute at this stage in the
proceedings. Accordingly, assuming Aman
is able to establish his factual allegations, we weigh the third and
fourth factors in his favor. (See >Osornio, supra, 124 Cal.App.4th at
pp. 331-332 [accepting plaintiff’s factual allegations regarding causation
for the purposes of assessing third and fourth factors regardless of whether
the “facts may ultimately disclose that” defendant’s conduct did not cause
injury].)

For all of the
reasons discussed above, we conclude that the rationale for extending
“liability to beneficiaries of wills negligently drawn by attorneys” (>Lucas, supra, 56 Cal.2d at p. 589)
applies equally where the attorney was retained to advise a settlor on matters
related to an existing trust and a subsequent, executed amendment naming the
trust beneficiary.

>b.
The
trial court erred in concluding that Bartnof did not owe a duty of care because
Vijendra’s death allegedly prevented the preparation of the survivor’s
sub-trust

The trial
court also ruled that Aman was not owed a duty of care because
the evidence showed that: (1)
Bartnof intended to amend the Trust to create a survivor’s sub-trust
within the Trust; and (2) Vijendra died
before Bartnof could complete these amendments.
In support, the court cited case law explaining that a quitclaim deed
transferring a property to a trust not in existence at the time the deed was
executed is nonetheless valid if the deed was executed in anticipation of the creation of the trust,
and the trust is created thereafter.
(See Luna v. Brownell (2010)
185 Cal.App.4th 668, 675.)

The court erred. First, as a matter of law, whether
Bartnof actually intended to establish a survivor’s sub-trust, and whether he
was prevented from doing so as a result of Vijendra’s death, are not relevant
to determining whether he owed a duty of care to Aman. Rather, those issues, relating to the manner
in which Bartnof executed his legal duties, are relevant to the second and
third elements necessary to state a cause of action for legal malpractice: breach of the duty owed and proximate
causation.

Second, Bartnof’s motion for summary
judgment did not assert that the undisputed evidence showed he would have
amended the Trust to establish the Survivor’s Sub-Trust but for Vijendra’s
intervening death. Instead, he argued
only that he was entitled to summary judgment because “Vijendra >never signed any will or trust or
testamentary document prepared by
Defendant Bartnof. Thus[,]. . . . >there is no legal duty running from
Defendant Bartnof to Plaintiff Chaudhary as a matter of law.” (Emphasis in
the original.)href="#_ftn5" name="_ftnref5"
title="">[5] Moreover, the evidence demonstrates an actual
dispute whether Bartnof
intended to establish a survivor’s sub-trust.
Bartnof alleged in his deposition testimony that he would have created
the sub-trust, but was told not to take any further action on the Trust until
Vijendra returned from Australia. Vijendra then died unexpectedly. Aman, however, contended that Bartnof’s
letters to Vijendra suggested that he simply misread the terms of the Trust,
believing that it automatically created a survivor’s sub-trust upon the death
of the first spouse: “Pursuant to the terms of the Trust, at the death of the
first spouse, the property is to be allocated between the survivor’s sub-trust
and the survivor individually, outright and free of trust. Since you are the surviving spouse, this deed
allocates one-half to your sub-trust and your wife’s share to you, outright and
free of trust.” In addition, the second
letter, dated December 2, stated that once Vijendra recorded the quitclaim
deeds, “100% of the title to these three properties will be in the Survivor’s
Sub-Trust and, therefore part of your estate.”

Whether
Bartnof intended to establish the survivor’s sub-trust is a disputed issue of
fact. Bartnof has never contended otherwise.
Accordingly, summary judgment on this basis cannot be affirmed.href="#_ftn6" name="_ftnref6" title="">[6]

DISPOSITION

The
judgment is reversed and the matter is remanded for further proceedings. Appellant is to recover his costs on appeal.





ZELON,
J.

We
concur:





PERLUSS, P. J.





WOODS, J.