Filed 5/25/22 Beauchesne v. Baugh CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SIXTH APPELLATE DISTRICT

Richard Beauchesne twice sued Bradford Baugh, one of a few lawyers who had once represented him in his dissolution action, along with Jeanne Schmidt, his sister and former guardian ad litem in the dissolution, and Thomas Kenefick, Schmidt’s boyfriend. In the second of Beauchesne’s lawsuits, filed over a year after the first, the trial court sustained Baugh’s demurrer to the second, third, fourth, and fifth causes of action on the ground that they were barred by the one-year statute of limitations in Code of Civil Procedure section 340.6.[1]

As in the trial court, Beauchesne contends on appeal that both the appointment of a guardian ad litem and Schmidt’s representation by Baugh entitled him to tolling of the limitations period. We conclude that the trial court properly sustained the demurrer. We further conclude that the trial court did not abuse its discretion in denying Beauchesne leave to amend these causes of action on the ground that Beauchesne had not raised a reasonable possibility that amendment could cure the defect. Accordingly, we affirm the orders.

1. FACTUAL AND PROCEDURAL BACKGROUND[2]

1. Dissolution Proceeding

On August 19, 2009, Beauchesne’s then-wife petitioned for dissolution of marriage. On August 5, 2011, on Beauchesne’s ex parte application, Jeanne Schmidt was appointed as guardian ad litem for Beauchesne in the dissolution action. She remained in that role until July 25, 2016. Baugh had represented Beauchesne but was permitted to withdraw as Beauchesne’s counsel on April 29, 2013. Baugh thereafter represented Schmidt in her capacity as guardian ad litem, with the consent of the family court, upon his representation that Beauchesne and Schmidt had waived any conflict. Attorney Paul Nesse thereafter represented Beauchesne, until at least December 13, 2013, when Nesse too sought to withdraw as counsel.

2. 2014 Civil Lawsuit

On April 23, 2014, 51 weeks after Baugh had withdrawn from representation of Beauchesne, Beauchesne filed a civil lawsuit against Baugh, Schmidt, and Kenefick. Beauchesne alleged causes of action for negligence, intentional tort, and fraud against all three and prayed for exemplary damages. The gravamen of his complaint was (1) that attorneys Baugh and Kenefick had engaged in legal malpractice in their discharge of duties owed to him in connection with the dissolution, including their failure to obtain waivers of conflict and of statutory and other rights; (2) that Schmidt was negligent in the discharge of her duties to him as guardian ad litem and his “de facto conservator” by waiving his statutory rights in the dissolution without authorization; (3) that all had deprived him of property and property rights, including by conversion of property to their own use and by payment to Baugh of “illegal” fees to which he was not entitled; (4) that all had engaged in intentional and negligent misrepresentation and concealment, including by promises without intent to perform; and (5) that Baugh “regularly and routinely placed his own interests in . . . fees ahead of [p]laintiff’s.”

Beauchesne filed a first amended complaint on January 20, 2015. The parties disagreed as to whether the first amended complaint operated as a dismissal of Baugh because it was titled “ ‘First Amended Complaint Against Defendant Jeanne Schmidt.’ ” On April 29, 2015, Beauchesne dismissed Schmidt from the lawsuit without prejudice.

On January 30, 2017, the court on Baugh’s motion dismissed the entire action without prejudice.

3. 2015 Civil Lawsuit

Beauchesne filed the operative complaint in this action on October 29, 2015, against the same defendants named in his 2014 lawsuit: Baugh, Schmidt, and Kenefick. The complaint, which incorporates by reference the 2014 complaint, attached as an exhibit, comprises the following causes of action: (1) fraud; (2) negligence; (3) conversion and civil extortion; (4) elder abuse; and (5) conspiracy with attorney(s).

Elaborating on his 2014 theory that, after her appointment as guardian ad litem in the dissolution case, Schmidt became his de facto conservator, Beauchesne alleges that Schmidt engaged in a number of fraudulent and malicious activities, including: (1) paying Baugh attorney fees and costs to which he was not entitled; (2) paying certain purported obligations of Beauchesne that should not have been paid; (3) refusing to invest Beauchesne’s funds as a prudent person and conservator would; (4) refusing to return money to Beauchesne despite his demand; (5) refusing to return personal property to Beauchesne; (6) refusing to act when informed that Baugh had lied to the judge in the dissolution proceeding; (7) ceding her obligations as guardian ad litem and conservator to Kenefick, her lawyer-boyfriend-fiancé; (8) permitting Kenefick to review Beauchesne’s medical records; (9) falsely representing to the judge in the dissolution proceeding that Baugh did not represent her; (10) violating a court order that certain information be submitted only to the court in the dissolution proceeding; (11) serving without a conservator’s bond; (12) failing to assert claims against Baugh on Beauchesne’s behalf; (13) failing to obtain probate court approval of an August 2012 dissolution settlement agreement; (14) submitting proposed judgments to the court without Beauchesne’s approval; (15) refusing to appeal the judgments; (16) refusing to send money that Beauchesne needed to pay rent; (17) agreeing to be named the beneficiary of an insurance policy on the life of Beauchesne’s ex-wife that had been intended to secure the ex-wife’s obligation to pay spousal support; and (18) agreeing that she would seek a conservatorship of Beauchesne and that she would serve as conservator.

Beauchesne alleges Baugh and Kenefick conspired with Schmidt in committing these acts.

On June 14, 2016, Schmidt filed a demurrer to the 2015 complaint. One day prior to the hearing on the demurrer, Beauchesne filed a first amended complaint. In its September 2 order sustaining the demurrer without leave to amend, the trial court struck the first amended complaint because it had been filed untimely and without leave of court.

In 2018, following dismissal of the 2014 complaint, Baugh filed a demurrer to the 2015 complaint. In August 2018, the trial court issued an order sustaining the demurrer without leave to amend as to the second, third, fourth, and fifth causes of action, finding that they are time-barred by the one-year statute of limitations set forth in section 340.6 for an action against an attorney for a wrongful act or omission other than fraud arising in the performance of professional services. As to the first cause of action for fraud, the court sustained the demurrer with leave to amend on the ground that it failed to state facts sufficient to constitute a cause of action.

In October 2018, Beauchesne filed a second amended complaint for fraud against Baugh. The following January, Beauchesne filed a motion for leave to file a third amended complaint. The trial court denied the motion. Beauchesne thereafter dismissed without prejudice his remaining fraud claim in the second amended complaint. The trial court dismissed with prejudice the second, third, fourth, and fifth causes of action.

Beauchesne timely appealed.

2. DISCUSSION

Beauchesne agrees that the operative limitations period for his causes of action against Baugh is one year under section 340.6 but relies on the tolling provision of that section’s subdivision (a)(4) and on section 352 to argue that the trial court erred in sustaining the demurrer. Alternatively, he argues that the trial court should have granted him leave to amend, whether upon sustaining the demurrer or upon his later motion for leave to file a third amended complaint.[3]

1. Legal Standard

We review de novo a trial court’s order sustaining a demurrer. (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.) In the exercise of our independent judgment, “we accept the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law. We may also consider matters subject to judicial notice.” (Yvanova v. New Century Mortgage Corp., supra, 62 Cal.4th at p. 924.)

Where the basis for demurrer is the statute of limitations, the untimeliness “must clearly and affirmatively appear on the face of the complaint and matters judicially noticed.” (Coalition for Clean Air v. City of Visalia (2012) 209 Cal.App.4th 408, 420.) It is the plaintiff’s obligation “ ‘to anticipate the [limitations] defense and plead facts to negat[e] the bar.’ [Citation.]” (Union Carbide Corporation v. Superior Court (1984) 36 Cal.3d 15, 25 (Union Carbide).)

When a demurrer is sustained without leave to amend, “we decide whether there is a reasonable possibility that the defect can be cured by amendment . . . .” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank).) If it can be, the trial court has abused its discretion. (Ibid.) However, “[t]he burden of proving such reasonable possibility is squarely on the plaintiff.” (Ibid.)

2. Judicial Notice

As a threshold matter, Beauchesne asks that we take judicial notice of three documents: (1) the ex parte application and order for appointment of Schmidt as his guardian ad litem filed August 9, 2011 in the dissolution proceeding; (2) the order after hearing terminating Schmidt’s appointment filed August 24, 2016; and (3) Baugh’s answer to the 2014 complaint. The trial court had denied as untimely Beauchesne’s request for judicial notice of the same documents. Because our review of the order sustaining the demurrer is de novo, we grant the request for judicial notice of these court records under Evidence Code section 452, subdivision (d), and 453, and therefore need not reach Beauchesne’s contention that the trial court abused its discretion in denying the identical request when made below. Our judicial notice of the existence of these documents does not, however, extend to the truth of allegations made therein. (Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)

3. Demurrer

Section 340.6 provides that “[a]n action against an attorney for a wrongful act or omission, 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 of omission, whichever occurs first.” (§ 340.6, subd. (a).) Beauchesne does not dispute that he filed the operative complaint more than a year from discovery of the relevant facts but argues that the time to bring his lawsuit was tolled as a consequence of either Schmidt’s appointment as guardian ad litem for the dissolution or Baugh’s representation of Schmidt, under subdivisions (a)(4) and (a)(2), respectively, of section 340.6.

1. Schmidt’s appointment as guardian ad litem

Subdivision (a)(4) of section 340.6 provides that the time period to commence a legal action under section 340.6 is tolled when “[t]he plaintiff is under a legal or physical disability that restricts the plaintiff’s ability to commence legal action.” Although the tolling provisions of section 340.6 are exclusive,[4] section 352 defines types of legal disabilities that may warrant application of section 340.6, subdivision (a)(4). (Bledstein v. Superior Court (1984) 162 Cal.App.3d 152, 159-164.) Specifically, section 352, subdivision (a) includes “lacking the legal capacity to make decisions.”

Under Beauchesne’s theory, Schmidt’s 2011 appointment as his guardian ad litem in the dissolution proceeding was sufficient to vitiate the delay of more than a year, whether because judicial notice would have established that her appointment persisted until April 2016, or because the allegation of the 2011 appointment alone sufficed to raise the potential for tolling, such that untimeliness was not apparent on the face of the pleading. Both arguments disregard the plaintiff’s burden to plead facts sufficient to negate the prima facie untimeliness. (Union Carbide, supra, 36 Cal.3d at p. 25.) More importantly, both arguments further depend on the misapprehension that the appointment of a guardian ad litem in one proceeding operates as a conclusive adjudication of legal disability for all purposes until termination of the appointment.

Section 340.6, subdivision (a)(4) specifies that the requisite disability, to warrant tolling, must restrict the plaintiff’s ability to commence legal action. The appointment of a guardian ad litem in one action in not a legal impediment to commencing another. Although Beauchesne calls Schmidt’s appointment a “de facto” conservatorship, the appointment of a guardian ad litem differs in material respects: it is not a determination of incapacity for all purposes and, as its name suggests, is unique to the litigation in which the court makes the appointment, here the dissolution proceeding in 2011. (§ 372, subd. (a)(1); Regency Health Services, Inc. v. Superior Court (1998) 64 Cal.App.4th 1496, 1498, fn. 2; Poaster v. Superior Court (1993) 20 Cal.App.4th 948, 951 [the status of guardian ad litem exists only in that specific litigation in which the appointment occurs].) “ ‘In the absence of a conflict of interest, . . . the appointment [of a guardian ad litem] is usually made on application only and involves little exercise of discretion. [Citation.]’ [Citation.]” (In re Marriage of Caballero (1994) 27 Cal.App.4th 1139, 1149). Beauchesne accordingly specified on the face of his application for Schmidt’s appointment that his unexplained disability was limited to “handling this matter” only, and the application was handled as an apparently ministerial matter, solely on Beauchesne’s conclusory representation that he “need[ed] someone to make decisions on settlement or trial of issues, see to it his assets are gathered and debts are paid.”

In contrast, probate conservatorships, like general adult guardianships under former law,[5] are subject to heightened procedural safeguards and scrutiny by the trier of fact, precisely because of the effect on the person proposed to be generally incapacitated and therefore subject to legal disabilities. (See, e.g., Prob. Code, §§ 1801 [clear and convincing standard of proof], 1826 [required investigation], 1827 [right to jury trial], 1470 [right to appointment of counsel], 810, et seq. [presumption of capacity].) Beauchesne argues that Schmidt’s appointment makes this case indistinguishable from Gottesman v. Simon (1959) 169 Cal.App.2d 494, 500-501 (adjudication of incompetency for a pre-1957 adult guardianship was conclusive unless capacity had been reestablished under former Probate Code section 1470-1472 (Stats. 1949, ch. 1413, §§ 1-3, providing for right to petition and jury trial) or “the guardianship has been substantially abandoned”) and Hellman Commercial T. & S. Bk. v. Alden (1929) 206 Cal. 592, 608-609 (ward in general guardianship incompetent to contract). But because these authorities dealt with the conclusive effect of former probate guardianship determinations, rather than guardianships ad litem, his reliance on them is unavailing.

Resisting this conclusion, Beauchesne relies on inapposite authority addressing whether tolling as to a plaintiff indisputably restricted in his ability to commence legal action may be ended upon the appointment of a guardian ad litem. In Tzolov v. International Jet Leasing, Inc. (1991) 232 Cal.App.3d 117, 120 (Tzolov), the court held that just as the appointment of a general guardian does not terminate an incapacitated plaintiff’s entitlement to tolling, the appointment of a guardian ad litem similarly does nothing to recommence the limitations period. Our decision is consonant with Tzolov, however: had Beauchesne alleged that he was restricted in his ability to commence legal action as a consequence of mental incapacity or disorder, the fact of Schmidt’s appointment as guardian ad litem in his dissolution action—or even as his conservator—would not entitle Baugh to assert that the limitations period otherwise subject to tolling under section 340.6, subdivision (a)(4) should then begin to run. But as in Tzolov, it is Beauchesne’s actual capacity, not the appointment of an ad litem guardian for his dissolution, that controls.

In contrast to Tzolov, and beyond the mere fact of his independent commencement of legal action, Beauchesne omits from his 2014 and 2015 complaints alike any suggestion that his ability to do so had in fact been “restricted.” He makes no allegation of disability, incapacity, incompetency, or any of the related terminology he would later employ in opposing the demurrer, and he does not allege that any such condition impeded his discovery of the operative facts. Nor do the matters judicially noticed by the trial court (or before the court on a request for judicial notice) establish such an inability. Accordingly, because the operative complaint on its face discloses that its filing came more than a year after the accrual of his causes of action, without pleading facts sufficient to warrant tolling under section 340.6, subdivision (a)(4), the trial court properly sustained the demurrer.

The trial court’s discretionary denial of leave to amend presents a closer question. One may reasonably question the wisdom of denying leave to amend on a first challenge to the pleadings, especially where the existence of a case-specific, years-old claim of legal incapacity is alleged therein. But “ ‘ “[t]he appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court.” ’ [Citations.]” (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1339.) Under this deferential standard of review, we examine the trial court’s determination that Beauchesne failed to establish a reasonable probability that amendment would cure the untimeliness.

In neither the operative complaint nor his opposition to Baugh’s demurrer does Beauchesne represent that he actually lacked the legal capacity to make decisions. To the contrary, his allegations against Schmidt and Baugh are predicated on his forthright resistance to such a conclusion: much of the operative complaint is premised on the fact of his continued legal capacity to make decisions: he complains, for example of Schmidt’s “refusing to act” on his direction, and of her and Baugh’s failure to seek his express consent before settling with his ex-wife.[6] At oral argument, Beauchesne resisted this reading of his allegations, but he ultimately agreed that, as “a practicing lawyer for a number of years,” he “wanted to participate in some decisions, and [his wishes] were not followed.”

Given Beauchesne’s underlying premise that his guardian ad litem and her lawyer should be held liable for damages for their failure to obtain his informed consent or follow his direction, we are unable to conclude the trial court abused its discretion in finding no reasonable possibility that Beauchesne could cure the defect under section 340.6, subdivision (a)(4).

2. Baugh’s representation of Schmidt

Beauchesne also argues that the statute of limitations was tolled pursuant to section 340.6, subdivision (a)(2), which provides for tolling when an “attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.” (§ 340.6, subd. (a)(2).) But Baugh’s representation of Beauchesne ended on April 29, 2013, when the court granted Baugh’s motion to withdraw as Beauchesne’s attorney.

Baugh’s continued involvement in the family proceeding as counsel for Schmidt in her capacity as guardian ad litem, however, leads Beauchesne to contend that Baugh also in effect continued to represent Beauchesne. This contention finds no basis in the law. An intended third-party beneficiary of an attorney-client relationship is not a client of the attorney. (Lasky, Haas, Cohler & Munter v. Superior Court (1985) 172 Cal.App.3d 264, 283 [a trust beneficiary is not a client of the trustee’s counsel]; see also Shen v. Miller (2012) 212 Cal.App.4th 48, 57 [a shareholder who brings a derivative action on behalf of a corporation acts in a fiduciary capacity substantially as guardian ad litem for the corporation, but that does not give rise to an attorney-client relationship between the attorney for the shareholder and the corporation].)

Beauchesne relies primarily on a treatise on legal ethics which discusses “primary” and “derivative” clients. (1 Hazard, Jr. et al., The Law of Lawyering (4th ed. 2017) § 2.07, p. 2-10.) Although the treatise asserts an attorney owes some elevated duty to a “derivative” client, it stops short of positing a representative relationship. (Ibid.) Like the treatise, Beauchesne cites Johnson v. Superior Court (1995) 38 Cal.App.4th 463. But Johnson is distinguishable, holding only that an attorney for a partnership might be deemed to have an attorney-client relationship with the individual partners, depending on the circumstances. (Id. at pp. 476-478.) Here, after he withdrew from representing Beauchesne, Baugh represented Schmidt personally, not an entity of which both Schmidt and Beauchesne were members. Beauchesne cites no California authority establishing that representation of a fiduciary such as a conservator, guardian, or guardian ad litem creates an attorney-client relationship with the conservatee or ward such that tolling should be applied under section 340.6, subdivision (a)(2). Whether or not Baugh’s decision to represent Schmidt given his history with Beauchesne was a professionally prudent one, we decline to extend the law in such a manner.

Accordingly, we conclude that the trial court correctly sustained the second, third, fourth, and fifth causes of action in Beauchesne’s complaint as time-barred. Further, because Beauchesne did not show a reasonable possibility that the defect can be cured, the trial court did not abuse its discretion in denying leave to amend. (Blank, supra, 39 Cal.3d at p. 318.)

4. Motion for Leave to File Third Amended Complaint

Beauchesne argues that the trial court compounded its error when a different judge denied his later motion for leave to file a third amended complaint. He points out that the denial of leave to file specified that it was “based upon the Court’s prior order” denying leave to amend and he contends this improperly treated the prior order as law of the case.

Because the initial order on the demurrer specifically denied leave to amend, Beauchesne’s subsequent request for leave to file another amended complaint resurrecting the second through fifth causes of action in effect sought reconsideration of the demurrer order. Section 1008 governs motions for reconsideration and “is the exclusive means for modifying, amending or revoking an order.” (Morite of California v. Superior Court (1993) 19 Cal.App.4th 485, 490.) Beauchesne, however, proffered none of the prerequisites for reconsideration under section 1008. The trial court was therefore correct to deny Beauchesne’s motion for leave to file a third amended complaint.

3. DISPOSITION

The trial court’s August 6, 2018, and February 25, 2019, orders are affirmed. Baugh is entitled to his costs on appeal.

_____________________________________

LIE, J.

WE CONCUR:

_________________________________

GREENWOOD, P.J.

_________________________________

GROVER, J.

Beauchesne v. Baugh

H047054

[1] Undesignated statutory references are to the Code of Civil Procedure.

[2] We take the facts from Beauchesne’s operative complaint and those matters properly subject to judicial notice; in reviewing a demurrer we must accept the truth of material facts properly pleaded. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.)

[3] Beauchesne for the first time on reply further contends that Baugh should be equitably estopped from disputing his incapacity, by virtue of Baugh’s assertion in his answer to the 2014 complaint that Beauchesne lacked capacity to bring the action. We do not ordinarily consider an issue raised for the first time in a reply brief, particularly where, as here, the appellant also failed to raise the issue in the trial court. (Reo Broad. Consultants v. Martin (1999) 69 Cal.App.4th 489, 500.)

[4] “The Legislature has accorded a measure of relief to a plaintiff who finds it impossible to bring suit by tolling the statutory period during the time the plaintiff ‘is under a legal or physical disability which restricts the plaintiff's ability to commence legal action.’ (§ 340.6, subd. (a)(4).) Except for the circumstances specified in the statute, however, the Legislature expressly intended to disallow tolling or extension of the limitations period for other reasons.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 757-758.) Accordingly, section 352 is relevant to the application of section 340.6, subdivision (a)(4) only to the extent that section 352 identifies types of disability that might satisfy section 340.6, subdivision (a)(4), and the disability operated to restrict the plaintiff’s ability to commence a legal action.

[5] “Prior to 1957, a petition for guardianship presented the only procedure available for a party to assume administration of the estate of an adult unable to manage his affairs (Prob. Code, div. 4). Except in the case of minors, a guardianship requires both allegation and proof of the insanity or incompetency of the proposed ward. (Prob. Code, § 1460.) A ward under a guardianship lacks the capacity to enter into a contract. [Citation.] [¶] Believing that the stigma of the label ‘incompetent’ discouraged persons unable to conduct their affairs from seeking appointment of a guardian, the State Bar of California recommended, and the Legislature established, the new protective relationship of conservatorship. These efforts resulted in 1957 in the addition to the Probate Code of a fifth division, consisting of sections 1701 through 2207 (Stats. 1957, ch. 1902, § 1) establishing probate conservatorships.” (Bd. of Regents v. Davis (1975) 14 Cal.3d 33, 37-38.)

[6] Even in his proffered third amended complaint, Beauchesne discloses a 1992 diagnosis not to cast doubt on his ability to file in 2014 and 2015 but to argue that Baugh’s willingness to misuse this information to “humiliate, embarrass, and even destroy Plaintiff” operated as a deterrent. The allegations recite only that Beauchesne in 1992 had been diagnosed with bipolar disorder and that (for a wholly unrelated medical condition) he became dependent on a prescription sleep aid until late 2011. Rather than allege that the duration of Schmidt’s appointment was driven by actual incapacity, Beauchesne suggests that he should not have been appointed a guardian ad litem even in 2011: “Baugh never explained . . . the extraordinary consequences and ramifications of having a GAL appointed for him . . . and never explained . . . that he had a right . . . to contest the appointment.”