Woods v. Nyhus & Co.
Filed 2/21/13 Woods v. Nyhus & Co. CA2/4
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opinion has not been certified for publication or ordered published for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 FOUR
CHRISTINA
WOLFENDEN WOODS,
Plaintiff and Appellant,
v.
WARD
R. NYHUS, JR.& COMPANY et al.,
Defendants and Respondents.
B236917
(Los Angeles County
Super. Ct. No. SC109330)
APPEAL from a
judgment of the Superior Court of
County, Geralde Rosenberg, Judge. Affirmed.
Robert S. Gerstein and Christopher
Rolin for Plaintiff and Appellant.
Farmer & Ridley, and Richard D. Cleary
for Defendants and Respondents.
__________________________________
Christina Wolfenden Woods appeals
from a judgment in favor of respondents Heike Thiel and her employer, Ward R.
Nyhus, Jr. & Company, on appellant’s complaint for
infliction of emotional distress. Appellant alleged that respondents breached a
fiduciary duty to her by falsely informing her father that she would not comply
with his wishes for the disposition of his estate. The trial court granted summary judgment in
favor of respondents, finding no such fiduciary duty existed. On appeal, appellant contends she presented
evidence sufficient to demonstrate a triable issue of fact as to the existence
of a fiduciary duty. Finding no error,
we affirm.
Appellant’s
father, Terry Wolfenden, initially retained respondents, certified public
accountants (CPAs), to prepare his tax returns in late 2001 or early 2002. In 2003, Wolfenden engaged respondents to
prepare income tax returns for his trust, the Wolfenden Trust. Sometime that year, Wolfenden also began a
relationship with Angela Hannigan. He
began living with Hannigan hours after his wife’s death in 2003, and continued
to do so until he died in 2009. At
Wolfenden’s request, respondents also prepared Hannigan’s 2007 income tax
returns.
In Spring 2007, Wolfenden introduced
Thiel to appellant and his other daughter, Jeanine Meunier. Appellant testified that Wolfenden described
Thiel as “the CPA in charge of the estate†and the “go-to†person concerning
any problems “in the future.†After
being introduced to respondents by her father, appellant retained respondents
to prepare her 2006 and 2007 income tax returns. In June 2007, Wolfenden gave Thiel power of
attorney over two of his bank accounts, so Thiel could write checks for him if
the need arose.
In August 2007, Wolfenden wrote a
letter detailing his estate plans and what he wanted his daughters to do with
his $15 million estate after his death.
In the August 6, 2007 letter, Wolfenden stated he wanted his daughters
to “honor [his] wishes.†Throughout the
letter, Wolfenden referred to Thiel as someone who “knows what I want,†was
familiar with his affairs, and could assist in carrying out his wishes
concerning the disposition of his estate.
Under the heading “Most Important,†Wolfenden stated he wanted Hannigan
to receive $72,000 after his death. He
explained that “Angela has been real nice to me. I can have my trust changed to what I
want. I will if I have to.†Wolfenden read the letter to his daughters
and, according to appellant, forced her to countersign the letter and write “I
will honor this agreement†next to her signature.
Appellant and Hannigan had a conflict
over Hannigan’s treatment of Wolfenden.
In the fall of 2008, appellant contacted Thiel on two occasions (a
telephone call and a meeting) to discuss her concerns about Hannigan. According to appellant, during the telephone
call, she told Thiel that “[i]t would be hard for me to give [Hannigan] the
money because of her behavior toward me and my father.†Appellant testified she contacted Thiel
because “I thought she was representing the trust and representing, you know,
the family and the trust . . . .†She hoped that Thiel would “be my advocate
and speak up . . . for me in front of my father.†Appellant could not recall Thiel saying
anything to her during the telephone call, and Thiel did not say anything
during the meeting, “just listening to what I had to
say . . . .â€
Shortly thereafter, Wolfenden amended
his trust to provide gifts totaling $112,500 to Hannigan. He also opened a new joint bank account with
Hannigan, which he funded with $540,000.
Appellant’s father died on January
29, 2009. Two weeks later, appellant
sued Hannigan to set aside the gift of the joint bank account. After settling with Hannigan, appellant filed
a complaint against respondents for slander,
breach of fiduciary duty, and negligent infliction of emotional distress
(NIED).
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In her complaint, appellant alleged
that respondents were CPAs whose clients included appellant, her father, the
Wolfenden Trust, and Hannigan. Appellant
further alleged that her father had encouraged her to contact Thiel “in
connection with any problems [she] had concerning the administration of the
Wolfenden Trust.†She also alleged that
her father “trusted [Thiel] as one that [sic]
[appellant] should communicate with concerning family problems.â€
Appellant
further alleged that in October 2008, she confided her concerns about
“Hannigan’s abusive attitude and misconduct
toward her father†to Thiel. Appellant
told Thiel that “she wanted her to act as a peacemaker and to assure her father
that she was acting in his best interest.â€
Appellant alleged Thiel subsequently told her father (1) that appellant
would not honor her father’s wishes to make certain payments to Hannigan after
his death, (2) that appellant had seen a lawyer concerning her rights and
duties under the Wolfenden Trust, and (3) that appellant “was not acting in the
best interests of her father.†Appellant
asserted this conduct breached Thiel’s fiduciary duty to her and caused her to
suffer severe emotional distress because it undermined her relationship with
her father. Specifically, appellant
alleged respondents “had an obligation to act in good faith and in a manner in
the best interest of [appellant] with such care including, reasonable inquiry
as a professional in approaching [her] father, who was in ill physical health
and failing mental capacity. In
addition, [Thiel] was acting with a conflict of interest and cultivated her
relationship with Wolfenden in violation of her fiduciary duty to
[appellant].â€
After filing
an answer generally denying all of the allegations, respondents moved for
summary judgment on the ground, inter alia, that appellant could not establish
that Thiel or Nyhus owed any duty to her.
Respondents asserted they were never hired by appellant to advise her
about her father’s affairs. Instead,
they were hired by Wolfenden to advise him about matters concerning the
Wolfenden Trust. In a declaration filed
in support of the motion for summary judgment, Thiel denied making any of the
statements attributed to her in the complaint.
Thiel admitted preparing 2006 and 2007 income tax returns for appellant
and her husband.
Appellant
filed an opposition, contending she presented evidence that respondents owed a
fiduciary duty to her, as (1) “she [had] reposed her trust and confidence in
Ms. Thiel and her firm not only by virtue of their relationship to her as CPAs,
but pursuant to her father’s instructions to her and the [respondents] that she
was to place her trust and confidence in them pertaining to the Trust,†and
(2) respondents owed a fiduciary duty to her, as she was a beneficiary of
the Wolfenden Trust. Appellant further
contended that Thiel voluntarily accepted a confidential relationship with
appellant because appellant’s father requested that Thiel do so at the Spring
2007 meeting and in the August 6, 2007 letter, and because Thiel failed to
object when appellant confided in her.
In support of the opposition, appellant
submitted a declaration from Dana A. Basney, a CPA who had previously testified
concerning “accounting principles, conflicts of interest and fiduciary dutiesâ€
(Basney Declaration). In the
declaration, Basney asserted that “[t]he preparation of tax returns does not
create a fiduciary duty; however, involvement in managing finances, investments
or acting as a trustee or under a power of attorney usually creates a fiduciary
duty.†Basney opined that “based upon my
analysis of the facts and documents in this case, . . . a
fiduciary relationship existed between Terry Wolfenden, the Wolfenden Trust and
its beneficiaries, Plaintiff Christina Woods and her sister, Jeannie
Meunier.†The opinion was based upon the
“fact†that respondents were “doing financial management [for the Wolfenden Trust]
which created a fiduciary relationship between the Wolfenden Trust estate, as
well as the trustee and the beneficiary.â€
Basney did not opine as to the scope of the fiduciary duty, or whether
Thiel breached that duty. Neither did
he mention confidential relationships.
Respondents
filed a reply, contending that they did not owe a fiduciary duty to appellant
merely because they performed work for the Wolfenden Trust. They also objected to the Basney Declaration
on the ground that it constituted an improper opinion on a question of law, and
that it lacked foundation.
On August 16,
2011, the trial court granted the motion for summary judgment, finding that
“there was no duty or fiduciary relationship between Plaintiff and Defendants
except for the matters related to her 2006 and 2007 tax returns.†The court sustained evidentiary objections to
the entire Basney Declaration. Judgment
was entered against appellant on October 11, 2011. Appellant timely appealed.
Appellant
contends the trial court erred in granting summary judgment. For the reasons explained below, we disagree.
A.
“A defendant
is entitled to summary judgment if the record establishes as a matter of law
that none of the plaintiff’s asserted causes of action can prevail. [Citation.]â€
(Molko v. Holy Spirit Assn.
(1988) 46 Cal.3d 1092, 1107.) Generally,
“the party moving for summary judgment bears an initial burden of production to
make a prima facie showing of the nonexistence of any triable issue of material
fact; if he carries his burden of production, he causes a shift, and the
opposing party is then subjected to a burden of production of his own to make a
prima facie showing of the existence of a triable issue of material fact.†(Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) In moving for summary judgment, “all that the
defendant need do is to show that the plaintiff cannot establish at least one
element of the cause of action -- for example, that the plaintiff cannot prove
element X.†(Id.
at p. 853.)
An order
granting summary judgment is reviewed de novo.
“Although we independently review the grant of summary judgment
[citation], our inquiry is subject to two constraints. First, we assess the propriety of summary
judgment in light of the contentions raised in [appellant’s] opening
brief. [Citation.] Second, to determine whether there is a
triable issue, we review the evidence submitted in connection with summary
judgment, with the exception of evidence to which objections have been
appropriately sustained.
[Citations.]†(
USA, Inc. (2012) 209 Cal.App.4th 1118, 1124.)
“‘Review of a
summary judgment motion by an appellate court involves application of the same
three-step process required of the trial court.
[Citation.]’†(
(1995) 35 Cal.App.4th 1654, 1662.) The
three steps are (1) identifying the issues framed by the complaint, (2)
determining whether the moving party has made an adequate showing that negates
the opponent’s claim, and (3) determining whether the opposing party has raised
a triable issue of fact. (
B.
In
her complaint, appellant alleged that Thiel breached her fiduciary duty to
appellant by falsely informing Wolfenden that appellant would not comply with
his wishes to make certain payments to Hannigan, and that the breach caused
severe emotional distress. In the motion
for summary judgment, Thiel presented a prima facie case that she owed no
fiduciary duty to appellant because (1) she was never retained by appellant to
advise her about family matters, and (2) she did not, as a matter of law, owe a
fiduciary duty to a beneficiary of a trust.
Appellant now contends she presented sufficient evidence to create a
triable issue of act on the existence of a fiduciary duty. Specifically, she asserts there is direct
evidence she reposed confidence in Thiel, indirect evidence that Thiel
voluntarily accepted the confidential relationship, and expert opinion that
there was a fiduciary duty. We
disagree.
C.
“‘[Fiduciary]’ and ‘confidential’
have been used synonymously to describe ‘“. . . any
relation[ship] existing between parties to a transaction wherein one of the
parties is in duty bound to act with the utmost good faith for the benefit of
the other party. Such a relation[ship]
ordinarily arises where a confidence is reposed by one person in the integrity
of another, and in such a relation[ship] the party in whom the confidence is reposed,
if he [or she] voluntarily accepts or assumes to accept the confidence, can
take no advantage from his [or her] acts relating to the interest of the other
party without the latter’s knowledge or consent . . . .â€â€™ [Citations.]
Technically, a fiduciary relationship is a recognized legal relationship
such as guardian and ward, trustee and beneficiary, principal and agent, or
attorney and client [citation], whereas a ‘confidential relationship’ may be
founded on a moral, social, domestic, or merely personal relationship as well
as on a legal relationship.
[Citations.] The essence of a
fiduciary or confidential relationship is that the parties do not deal on equal
terms, because the person in whom trust and confidence is reposed and who
accepts that trust and confidence is in a superior position to exert unique
influence over the dependent party.†(
Cal.App.3d 369, 382-383.) “‘[B]efore a
person can be charged with a fiduciary obligation, he must either knowingly
undertake to act on behalf and for the benefit of another, or must enter into a
relationship which imposes that undertaking as a matter of law.’ [Citation.]â€
(City of Hope National Medical
Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 386.)
A fiduciary duty may arise from a
legally recognized fiduciary relationship, such as an attorney-client
relationship, or from a confidential relationship. Appellant does not contend she was in a
legally recognized fiduciary relationship with respondents. Although appellant was a client of
respondents for income tax return work, she does not rely on any fiduciary duty
arising from that formal relationship in asserting her claims. Nor does appellant argue that any legally
recognized fiduciary relationship between her and respondents arose from her
status as a beneficiary of work done for the Wolfenden Trust. Rather, appellant contends that there was a
confidential relationship between the parties, and that a fiduciary duty arose
from that relationship which precluded Thiel from disclosing appellant’s
statement about Hannigan to Wolfenden.
“Because confidential relation[ship]s
do not fall into well-defined categories of law and depend heavily on the
circumstances, they are more difficult to identify than fiduciary relation[ship]s.†(Richelle
L. v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257, 272 (
when one person reposes trust and confidence “in the integrity of another,†and
that other person voluntarily accepts the relationship. (Barbara
A. v. John G., supra, 145
Cal.App.3d at p. 382; accord, Richelle L.,
supra, at p. 272, fn. 6.)
Here, appellant contends there was a
confidential relationship because she reposed trust and confidence in Thiel by confiding
her concerns about Hannigan to Thiel.
However, “‘[t]he mere fact that A receives the confidences of B does not
turn A into B’s fiduciary, nor does it create a relationship of trust and
confidence. A “relationship†has to
exist over a period of time, and the divulging of a single confidence -- even
an important one -- does not create a relationship (even though it may be
evidence that such a relationship exists).’â€
(Richelle L.,
fn. 6.) Likewise, “[t]he mere placing of
a trust in another person does not create a fiduciary relationship.†(Zumbrun
v. University of Southern California (1972) 25 Cal.App.3d 1, 13.)
Appellant also
contends that Thiel voluntarily accepted a confidential relationship with
appellant, but there is no admissible evidence to support this contention. Appellant does not claim that Thiel expressly
agreed to act on her behalf with respect to her family’s affairs. She asserts, rather, that Thiel listened to
her. Appellant cites no case law, and we
have found none, for the proposition that listening to a person creates a
confidential relationship. (Cf.
formal counseling relationship].)
Nor did the
oral and written statements by Wolfenden concerning Thiel create a confidential
relationship between Thiel and appellant.
According to appellant, Wolfenden introduced Thiel as the CPA for his
estate and the “go-to†person concerning any problems in the future. Wolfenden’s August 2007 letter clearly
referred to Thiel as someone who “kn[ew] what [Wolfenden] want[ed]†concerning
the disposition of his assets. These comments identify Thiel’s primary role as
assisting in administering the estate after
Wolfenden’s death. As Wolfenden was both
the trustor and sole trustee, he had total control over the disposition of the
trust assets. Indeed, he cautioned
appellant that “I can have my trust changed to what I want. I will if I have to.†While Thiel may have had a fiduciary duty to
disclose to her client Wolfenden any information relevant to the administration
of his trust (including information that a successor trustee did not intend to
fulfill his wishes as the trustor), she owed no duty to appellant. Moreover, even if Wolfenden’s comments
introducing Thiel were construed to define her role more broadly, they could
not, standing alone create a confidential relationship between appellant and
Thiel.
Citing Tri-Growth Centre City, Ltd. v. Silldorf, Burdman, Duignan &
Eisenberg (1989) 216 Cal.App.3d 1139 (Tri-Growth),
appellant contends Thiel owed a fiduciary duty to her because Thiel was able to
obtain confidential information from appellant due to Thiel’s work for
Wolfenden. Appellant’s reliance upon
represented various general partners who had formed a limited partnership
(Tri-Growth) to acquire real property.
When the partners formed Tri-Growth, one of its goals was to acquire all
the parcels on a specific city block.
Subsequently, one of the law firm’s attorneys, Scott Burdman, became a
limited partner of Tri-Growth, and Tri-Growth eventually purchased all but one
parcel. In late 1986, Burdman inquired
of a Tri-Growth partner concerning the negotiations for the remaining
parcel. Burdman learned that the price
had dropped and that the seller wanted to quickly close on the deal, but
Tri-Growth wanted to close after the new year.
Without informing his partners in Tri-Growth, Burdman’s law firm
purchased the parcel before Tri-Growth could.
Plaintiffs asserted that the law firm was able to purchase the property
only by using the confidential information extracted by Burdman about
Tri-Growth’s inclination to delay the purchase.
(Id. at pp. 1145-1149.) The appellate court concluded that “[i]n the
unique context of the transaction involved here, there is a factual question as
to the existence of a fiduciary relationship [citation], and whether defendants
breached it.†(Id. at p. 1151.) The
instant case is easily distinguishable from Tri-Growth,
as Thiel is not alleged to have actively sought confidential information from
appellant to use for her personal gain.
Rather, it was appellant who approached Thiel and confided in her.
Finally, the
Basney Declaration did not create a triable issue of material fact as to the
existence of a confidential relationship creating a fiduciary duty;
accordingly, the trial court did not abuse its discretion in excluding the
declaration. (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1599
(Amtower) [trial court’s ruling on
the admissibility of opinion evidence reviewed for abuse of discretion].) The trial court sustained respondents’
objection to the Basney Declaration on the ground that it was improper opinion evidence
and lacked foundation. (See
is generally a question of law.
[Citation.]â€]; Asplund v. Selected
Investments in Financial Equities, Inc. (2000) 86 Cal.App.4th 26, 50 [“‘[T]he
question of the existence and scope of a defendant’s duty is a legal question
which depends on the nature of the . . . activity in
question and on the parties’ general relationship to the activity, and is an
issue to be decided by the court, rather than the jury.’â€].) Appellant contends Basney could properly
opine on whether a fiduciary duty arose from the confidential relationship
between appellant and Thiel, because “the existence of a confidential
relationship is a question of fact.†(
the existence of a fiduciary duty arising from a confidential relationship
between appellant and Thiel. Indeed,
Basney never discussed confidential relationships or how the facts of this case
demonstrated a confidential relationship between appellant and Thiel. Rather, Basney opined that Thiel owed a
fiduciary duty to appellant that arose from her fiduciary relationship with “the
Wolfenden Trust and its beneficiaries.â€
This opinion was wrong legally, as an accountant cannot have a fiduciary
relationship with a trust, which “‘“‘is not an entity separate from its
trustee[].’â€â€™â€ (Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1132,
fn.3.) Nor does an accountant have a
duty to third party beneficiaries of work done for a client. (Richard
B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 580-582; cf.
(2000) 22 Cal.4th 201, 212 [attorney for trustee has no duty to beneficiaries of
the trust].) More importantly, Basney’s
opinion that there was a fiduciary duty was based upon a legally recognized
fiduciary relationship, that of accountant-client. “Where a legally recognized fiduciary
relationship exists,†the existence of a fiduciary duty is a question of law
for the court. (Barbara A. v. John G., supra,
145 Cal.App.3d at p. 383.) Thus, Basney
was opining on an issue outside the scope of expert testimony, and his
declaration did not create a triable issue of fact on the existence of a
fiduciary duty owed to appellant.
Cal.App.4th 1070 (Stanley) is not to
contrary. In that case, the court
concluded that an expert witness’s testimony about the Rules of Professional
Conduct and the common law of attorney fiduciary duty were sufficient to
establish the existence of a fiduciary duty on the part of the attorney
defendant. The Stanley court cited Day v.
Rosenthal (1985) 170 Cal.App.3d 1125 (Day) in support, but in Day,
the appellate court held that “[t]he standards governing an attorney’s ethical
duties are conclusively established by the Rules of Professional Conduct. They cannot
be changed by expert testimony. If an
expert testifies contrary to the Rules of Professional Conduct, the standards
established by the rules govern and the expert testimony is disregarded. [Citation.]â€
(Id. at p. 1147.) In contrast, here, Basney never testified
about confidential relationships and how accountants could enter into
confidential relationships with nonclients. Accordingly, the trial court did not err in
excluding the Basney Declaration.
Appellant has
not shown the existence of a confidential relationship between herself and
Thiel. Nor has she shown a triable issue
of fact on this issue. Thus, respondents
are entitled to summary judgment on the cause of action for breach of fiduciary
duty. Because the cause of action for
negligent infliction of emotional distress is a derivative tort, it falls with
the breach of fiduciary duty cause of action.
(Potter v. Firestone Tire &
Rubber Co. (1993) 6 Cal.4th 965, 984.)
In short, the trial court did not err in granting summary judgment on
these causes of action in favor of respondents.
The judgment is affirmed. Respondents are entitled to their costs on appeal.
MANELLA,
J.
We concur:
EPSTEIN, P. J. SUZUKAWA,
J.
the order granting summary judgment on her cause of action for slander. Accordingly, we will not discuss that cause
of action further.
