Sammis v. Brobeck, Phleger & Harrison

Filed 6/15/06 Sammis v. Brobeck, Phleger & Harrison CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, Patricia Y. Cowett, Judge. Reversed and remanded with directions.

Defendant Brobeck, Phleger & Harrison (Brobeck) appeals an order granting the motion for new trial filed by plaintiffs Batiquitos Development Corporation (BDC), Batiquitos Farms (Farms), Batiquitos Pointe (Pointe), Batiquitos Bluff (Bluff), Sammis Properties, Donald F. Sammis, and West Side Partnership (Partnership) (collectively Plaintiffs), which set aside the trial court's grant of summary judgment in Brobeck's favor. Plaintiffs filed the instant action against Brobeck alleging causes of action for legal malpractice and breach of fiduciary duty arising out of Brobeck's legal representation of them in connection with the sale of real property owned by Farms, Pointe, and Bluff (collectively Debtors), all of which were then subject to a pending Chapter 11 bankruptcy proceeding, to Saiga California, Inc. (Saiga). On appeal, Brobeck contends the trial court erred by granting Plaintiffs' motion for new trial, which set aside the summary judgment in its favor because there was no triable issue of material fact on the element of causation. Brobeck asserts Plaintiffs, in opposing its motion for summary judgment, did not carry their burden to present evidence to support a finding that but for Brobeck's alleged malpractice, it is more likely than not Plaintiffs would have obtained a more favorable result in the underlying sale of real property.

FACTUAL AND PROCEDURAL BACKGROUND

Bluff and Pointe are limited partnerships with Sammis as their general partner. Farms is a general partnership with Sammis Properties, a California corporation, and Sammis as general partners. In the 1980's, Farms, Bluff and Pointe each owned various parcels of real property located north of the Batiquitos Lagoon in Carlsbad (Property), which they began to develop.^[1] The Property was encumbered by a first trust deed held by First Interstate Bank (Bank).^[2] In early 1990, when the unpaid balance of Bank's loan exceeded $33,600,000, Bank filed a notice of trustee's sale to foreclose on the Property.^[3]

On February 1, 1990, Debtors filed Chapter 11 bankruptcy petitions in federal court. The law firm of Lorenz, Alhadeff, Lundin & Oggel (Lorenz) represented Debtors when they initiated their bankruptcy proceedings. Bank sought relief from the bankruptcy court's stay to permit it to foreclose on the Property.

Beginning in April, Sammis negotiated with Toshihiko Saiga, a Japanese developer, regarding the possible sale of the Property to Saiga (a California corporation apparently owned by Toshihiko Saiga). On September 16, Debtors, Sammis, Sammis Properties, and Lee Sammis, as trustee of the Donald F. Sammis Children's Trust (the Trust) (collectively Sellers) entered into a purchase and sale agreement and joint escrow instructions (Purchase Agreement) for the sale of the Property to Saiga. Lorenz represented Sellers in negotiations with Saiga's attorney and was primarily responsible for drafting the Purchase Agreement. The Purchase Agreement provided for the sale of the Property to Saiga for an amount not to exceed $26,700,000 as necessary to satisfy the liens and Debtors' obligations with respect to the Property.^[4] It also provided that Saiga, within three years after the close of escrow, would transfer title to certain western parcels of the Property (West Side property) to a limited partnership (the Partnership) to be formed by Sammis (or a related entity) and Saiga on the date of that transfer.^[5] Transfer of title to the West Side property was to be "conveyed free and clear of all liens and encumbrances other than: (1) those of record against the West Side [property] as of the Close of the [Property escrow] (as shown on the Owner's Policy and the Survey), and (2) those additional matters approved in writing by [the Partnership]." The Purchase Agreement also provided for the subsequent execution by the parties of a separate agreement regarding the formation of the Partnership (Formation Agreement). Close of escrow under the Purchase Agreement was conditioned on approval of the transaction by the bankruptcy court. On September 30, Sellers and Saiga executed the Formation Agreement.

On October 25, the bankruptcy court approved the sale of the Property to Saiga pursuant to the Purchase Agreement. In support of Debtors' motion for court approval of the sale, Sammis filed a 34-page declaration stating that:

"45. The Debtors firmly believe that they have negotiated a fair, adequate and reasonable purchase for the [Property] with Saiga. The Debtors believe that the purchase price and terms from Saiga are fair and reasonable under the circumstances, especially given the very substantial development uncertainties and risks which accompany the project. Certainly, the Saiga offer (as finally negotiated) reflects the very best proposal for purchase and development of the [P]roperty which the Debtors have been able to obtain. No other party has proposed a better transaction to the Debtors."^[6] (Italics added.)

The court's order stated that "[a]fter taking into account the length of time necessary to sell the Property, the lack of concrete offers to purchase the Property to date, the financial burden of carrying costs, and the unlikelihood of other firm offers materializing in the reasonably near future, if the transaction contemplated by the Purchase Agreement is not approved, it is unlikely that the Debtors will be able to realize from the sale of the Property a net amount in excess of that offered in the Purchase Agreement." The court approved the sale and other transactions contemplated by the Purchase Agreement and Formation Agreement and directed Debtors to execute and deliver those documents and perform all of the obligations imposed on them.

Also on October 25, the bankruptcy court issued a separate order based on a stipulation among Sellers, Saiga, and Bank (Stipulation). The Stipulation provided that the "Escrow shall close according to the terms of the Purchase Agreement," and Saiga could assign its rights under the Purchase Agreement to Kaiza Poinsettia Corporation (Kaiza). The Stipulation further provided for the release by Bank of any signatories or guarantors (e.g., Sammis) of Bank's loan. However, if the sale of the Property did not close because of a default by Sellers, the Property would be transferred to Bank and it would then sell the Property to Saiga for $24,500,000.^[7] Brobeck represented Sammis, Sammis Properties, and the Trust at the October 25 hearing.^[8]

On or about November 5, Sellers and Kaiza (presumably as assignee of Saiga's rights under the Purchase Agreement) signed final escrow instructions for the sale of the Property to Kaiza. The escrow instructions disclosed that Kaiza was obtaining a new first trust deed loan in a maximum amount of $30,000,000 from Hyogo Bank, Ltd. (Hyogo) "encumbering the property herein." They further stated that the close of escrow for the transfer of the "Main Property" (i.e., the Property) was to be on or after November 6 and the consideration for the transfer of that property was to be $26,700,000.

On or about November 6, Debtors substituted Brobeck as their attorney of record in their bankruptcy proceedings in place of Lorenz. On November 8, escrow closed for the sale of the Property to Kaiza. Hyogo received a first trust deed encumbering all of the Property as collateral for its loan to Kaiza.

On or about November 5, 1993 (about three years after the close of escrow), Saiga presented to BDC a proposed limited partnership agreement for the formation of the Partnership. While being represented by the law firm of Menke, Fahrney & Carroll (Menke) and following failed negotiations with Saiga, Sammis refused to sign the proposed limited partnership agreement.^[9] In June 1994, Menke, on behalf of Plaintiffs, filed an action (the Saiga lawsuit) against Saiga, Kaiza, and Hyogo, alleging a cause of action for breach of the Purchase Agreement.^[10] The law firm of Mazzarella, Dunwoody, Wilson & Petty (Mazzarella) ultimately assumed representation of Plaintiffs in that action. After a trial in that action, the jury returned a verdict against Plaintiffs, finding Plaintiffs, and not Saiga or the other defendants, had breached the Purchase Agreement and Formation Agreement. The trial court entered a judgment for Saiga and the other defendants, which was affirmed on appeal in Batiquitos Farms v. Saiga California, Inc. (Nov. 2, 1999, D028512) [nonpub. opn.] (Saiga).

On June 25, 1998, Plaintiffs filed the instant action against Brobeck, alleging causes of action for legal malpractice and breach of fiduciary duty. Brobeck filed a motion for summary judgment, asserting the doctrines of collateral estoppel and judicial estoppel applied to bar Plaintiffs' action based on the judgment against them in the Saiga lawsuit. Although the trial court granted the motion and entered judgment in Brobeck's favor, the judgment was reversed in Sammis v. Brobeck, Phleger & Harrison (June 4, 2002, D036784) [nonpub. opn.] (Sammis I).

In May 2003, Plaintiffs filed a first amended complaint in this action. In June 2004, Brobeck filed a new motion for summary judgment, asserting Plaintiffs could not meet their burden of proof on the element of causation (on their malpractice claim) under Viner v. Sweet (2003) 30 Cal.4th 1232 (Viner) because they could not show it is more likely than not that they would have obtained a more favorable result but for Brobeck's alleged malpractice.^[11] The trial court granted Brobeck's motion for summary judgment and entered judgment for Brobeck.

Plaintiffs timely filed a motion for new trial, arguing: (1) the evidence was insufficient to justify the trial court's decision to grant the summary judgment motion (Code Civ. Proc., § 657(6))^[12]; (2) the trial court's decision was contrary to law (§ 657(6)); (3) the trial court committed an error of law in granting the motion for summary judgment (§ 657(7)); and (4) evidence had been newly discovered (§ 657(4)). On November 24, 2004, the trial court granted Plaintiffs' motion for new trial and set aside its summary judgment for Brobeck, finding it had made an error of law (§ 657(7)). The court stated:

"Plaintiff[s] [have] convinced the Court there is an issue of fact as to causation regarding whether there would have been a better deal than the 'Saiga Deal' but for the malpractice of [Brobeck] regarding nondisclosure of the loan on the [West Side property], per [Viner, supra, 30 Cal.4th 1232]. This conclusion is based principally upon the (1) [McMillin] deal . . . and (2) [Parke-]Randall Capital Corp. deal . . . , [(3)] [Hyogo's loan] commitment letter[,] and [(4)] the loan agreement."

Brobeck timely filed a notice of appeal.^[13]

DISCUSSION

I

Standards of Review

In Aguilar, supra, 25 Cal.4th 826, the Supreme Court concluded that an appellate court should independently review a trial court's order granting a new trial on the ground of error of law following grant of a summary judgment motion. (Id. at pp. 859-860.) Aguilar noted that "any determination underlying any order is scrutinized under the test appropriate to such determination. [Citations.]" (Id. at p. 859.) Because an appellate court reviews independently an order granting a summary judgment, a trial court's order granting a motion for new trial based on error of law in granting a summary judgment must be reviewed independently. (Id. at p. 860.)^[14]

"On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. [Citation.]" (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334; Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) "The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citation.]" (Aguilar, supra, 25 Cal.4th at p. 843.)

Aguilar clarified the standards that apply to summary judgment motions under section 437c. (Aguilar, supra, 25 Cal.4th at pp. 843-857.) Generally, if all the papers submitted by the parties show there is no triable issue of material fact and the " 'moving party is entitled to a judgment as a matter of law' " (§ 437c, subd. (c)), the court must grant the motion for summary judgment. (Aguilar, at p. 843.) Section 437c, subdivision (o) provides a cause of action has no merit if: (1) one or more elements of that cause of action cannot separately be established; or (2) a defendant establishes an affirmative defense to that cause of action. Section 437c, subdivision (p)(2) states:

"A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to that cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff or cross-complainant may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto."

Aguilar made the following observations:

"First, and generally, from commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. . . . There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . .

"Second, and 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. . . . A prima facie showing is one that is sufficient to support the position of the party in question. . . .

"Third, and generally, how the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on which would bear what burden of proof at trial. . . . [I]f a defendant moves for summary judgment against . . . a plaintiff [who would bear the burden of proof by a preponderance of the evidence at trial], [the defendant] must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not--otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact." (Aguilar, supra, 25 Cal.4th at pp. 850-851, fns. omitted.)

Summary judgment law in California no longer requires a defendant to conclusively negate an element of a cause of action. (Id. at p. 853.) It is sufficient for a defendant "to show that the plaintiff cannot establish at least one element of the cause of action," which the defendant can do "by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence." (Id. at pp. 853-854.) However, "[s]ummary judgment law in this state . . . continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence." (Id. at p. 854, fn. omitted.) Aguilar stated:

"To speak broadly, all of the foregoing discussion of summary judgment law in this state, like that of its federal counterpart, may be reduced to, and justified by, a single proposition: If a party moving for summary judgment in any action . . . would prevail at trial without submission of any issue of material fact to a trier of fact for determination, then he should prevail on summary judgment. In such a case, . . . the 'court should grant' the motion 'and avoid a . . . trial' rendered 'useless' by nonsuit or directed verdict or similar device. [Citations.]" (Id. at p. 855, italics added, fn. omitted.)

In deciding whether a defendant is entitled to summary judgment, the court "must . . . determine what any evidence [submitted by the plaintiff] or inference [therefrom] could show or imply to a reasonable trier of fact." (Aguilar, supra, 25 Cal.4th at p. 856.) Therefore, if any evidence or inference therefrom shows or implies the existence of the required element(s) of a cause of action, the court must deny a defendant's motion for summary judgment because a reasonable trier of fact could find for the plaintiff. (Id. at pp. 856-857.) "But if the court determines that all of the evidence presented by the plaintiff, and all of the inferences drawn therefrom, show and imply [the existence of a required element of a cause of action] only as likely as [its nonexistence] or even less likely, it must then grant the defendant['s] motion for summary judgment, even apart from any evidence presented by the [defendant] or any inferences drawn therefrom, because a reasonable trier of fact could not find for the plaintiff." (Id. at p. 857, fn. omitted.) When plaintiff relies on inference rather than evidence, he or she "must all the same rely on an inference implying [the existence of a required element] more likely than [its nonexistence], either in itself or together with other inferences or evidence." (Ibid.) An "inference is reasonable if, and only if, it implies [existence of the element is] more likely than [its nonexistence]." (Ibid.)

"On appeal, we exercise 'an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.' [Citation.] 'The appellate court must examine only papers before the trial court when it considered the motion, and not documents filed later. [Citation.] Moreover, we construe the moving party's affidavits strictly, construe the opponent's affidavits liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it.' [Citations.]" (Seo v. All-Makes Overhead Doors (2002) 97 Cal.App.4th 1193, 1201-1202.)

In general, "we will consider only those facts that were before the trial court when it ruled on the [summary judgment] motions. [Citation.] This, in turn, means the facts contained in the parties' separate statements. [¶] '[T]he statutory mandate for a separate statement [requires] a party to specify within that document any facts he deems to be disputed facts material to the issue presented. . . . [T]he statement serves two functions: to give the opponent notice of the facts; and to permit the trial court to focus on the facts germane to the issues. [Citation.] . . . [Therefore,] "it is no answer to say the facts set out in the supporting evidence or memoranda of points and authorities are sufficient. 'Such an argument does not aid the trial court at all since it then has to cull through often discursive argument to determine what is admitted, what is contested, and where the evidence on each side of the issue is located.' " [Citations.] . . . "[A]ll material facts must be set forth in the separate statement. 'This is the Golden Rule of Summary Adjudication: if it is not set forth in the separate statement, it does not exist.' " [Citation.] Thus, when the "fact" is not mentioned in the separate statement, it is irrelevant that such fact might be buried in the mound of paperwork filed with the court, because the statutory purposes are not furthered by unhighlighted facts.' [Citations.]" (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 640-641.)

II

Proof of Causation under Viner

"In a legal malpractice action arising from a civil proceeding, the elements are[:] (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. [Citations.]" (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199-1200, italics added.) Those elements, including the same causation element, also must be shown in a transactional malpractice action. (Viner, supra, 30 Cal.4th at pp. 1235, 1240-1244.) Viner stated: "We see nothing distinctive about transactional malpractice that would justify a relaxation of, or departure from, the well-established requirement in negligence cases that the plaintiff establish causation by showing either (1) but for the negligence, the harm would not have occurred, or (2) the negligence was a concurrent independent cause of the harm." (Id. at pp. 1240-1241.)^[15]

Viner quoted favorably a law review article that explained the reasoning for application of the same causation test:

" 'When a business transaction goes awry, a natural target of the disappointed principals is the attorneys who arranged or advised the deal. Clients predictably attempt to shift some part of the loss and disappointment of a deal that goes sour onto the shoulders of persons who were responsible for the underlying legal work. Before the loss can be shifted, however, the client has an initial hurdle to clear. It must be shown that the loss suffered was in fact caused by the alleged attorney malpractice. It is far too easy to make the legal advisor a scapegoat for a variety of business misjudgments unless the courts pay close attention to the cause in fact element, and deny recovery where the unfavorable outcome was likely to occur anyway, the client already knew the problems with the deal, or where the client's own misconduct or misjudgment caused the problems. It is the failure of the client to establish the causal link that explains decisions where the loss is termed remote or speculative. Courts are properly cautious about making attorneys guarantors of their clients' faulty business judgment.' (Baumann, Damages for Legal Malpractice: An Appraisal of the Crumbling Dike and Threatening Flood (1988) 61 Temp. L.Rev. 1127, 1154-1155, fns. omitted, italics added [in Viner] . . . .)" (Viner, supra, 30 Cal.4th at p. 1241.)

Accordingly, Viner summarized a plaintiff's burden to prove the element of causation as: "[A] plaintiff in a transactional malpractice action must show that but for the alleged malpractice, it is more likely than not that the plaintiff would have obtained a more favorable result."^[16] (Id., at p. 1244.) It described the "crucial causation inquiry [as] what would have happened if the defendant attorney had not been negligent." (Id. at p. 1242.) Circumstantial evidence can be presented by the plaintiff to meet that burden. (Ibid.) Furthermore, "the plaintiff need not prove causation with absolute certainty. Rather, the plaintiff need only ' "introduce evidence which affords a reasonable basis for the conclusion that it is more likely than not that the conduct of the defendant was a cause in fact of the result." ' [Citation.] In any event, difficulties of proof cannot justify imposing liability for injuries that the attorney could not have prevented by performing according to the required standard of care. [Citation.]" (Id. at p. 1243.)^[17]

In the context of a defendant's motion for summary judgment in a legal malpractice action, if the defendant attorney carries his or her initial burden of production by presenting evidence that establishes a prima facie showing that there is no triable issue on (i.e., the plaintiff cannot prove) the element of causation, the burden of production then shifts to the plaintiff to present evidence sufficient to show there is a triable issue on that element (i.e., evidence sufficient to support a finding by a reasonable trier of fact that it is more likely than not the plaintiff would have obtained a more favorable result but for the defendant's alleged negligence). (Aguilar, supra, 25 Cal.4th at pp. 850-851, 856-857; Viner, supra, 30 Cal.4th at p. 1244.) "[I]f the court determines that all of the evidence presented by the plaintiff, and all of the [reasonable] inferences drawn therefrom, show and imply [the existence of the causation element] only as likely as [its nonexistence] or even less likely, it must then grant the defendant['s] motion for summary judgment, even apart from any evidence presented by the [defendant] or any inferences drawn therefrom, because a reasonable trier of fact could not find for the plaintiff." (Aguilar, supra, at p. 857, fn. omitted.) Furthermore, " 'proof of causation cannot be based on mere speculation, conjecture and inferences drawn from other inferences to reach a conclusion unsupported by any real evidence . . . . [¶] . . . [W]here there is no factual basis . . . for [the plaintiff's] general assertion of causation, the conclusion is unavoidable that summary judgment was properly granted.' [Citation.]" (Saelzler v. Advanced Group 400, supra, 25 Cal.4th at p. 775, quoting Leslie G. v. Perry & Associates (1996) 43 Cal.App.4th 472, 488.)

III

Trial Court's Order Granting New Trial

After Summary Judgment for Brobeck

Brobeck contends the trial court erred by granting Plaintiffs' motion for new trial after it had entered summary judgment for Brobeck.

A

Plaintiffs' first amended complaint alleged causes of action against Brobeck for legal malpractice and breach of fiduciary duty. Although the complaint generally alleged Brobeck represented Plaintiffs "at various times beginning in 1990 . . . on the underlying bankruptcy, the [Purchase] Agreement, the underlying transaction and the underlying disputes," its specific allegations of negligence related to Brobeck's conduct shortly before or at the time of the close of escrow under the Purchase Agreement. The complaint alleged Brobeck's negligence included:

"a. The failure to fully advise their clients of the effects of the transfer of title to SAIGA in the manner that occurred in 1990, and the failure to advise their clients of the need to insure that SAIGA would be limited in its ability to change title, change physical condition or change entitlements (and to obtain security for performance of promises not to make those changes); and

"b. The failure to advise their clients of the preference of forming the partnership in 1990 and transferring title to the partnership instead of SAIGA; and

"c. The failure to thoroughly understand and fully advise their clients of (1) the existence of a potential loan from Hyogo Bank in the amount of $30 million, and (2) the impact of the $30 million Hyogo Bank loan on the transaction and the extent of the security for this loan, and (3) the effect the existence of this $30 million loan would have on their clients' rights, duties and obligations at the time of conveyance of the West Side [property] (November 8, 1993) and the formation of the anticipated Limited Partnership; and

"d. The failure to carefully review all of the documents prior to the closing on November 5, 1990, including all Recordation Instructions, and fully advise their clients as to ambiguities, uncertainties and inconsistencies that existed in the documents, including, but not limited to, advising their clients about the purported $30 million Hyogo Bank loan and the inclusion (or not) of the West Side property as security for this loan, and the failure to require that the Preliminary Title Report be attached as an exhibit to the [Purchase Agreement]; and

"e. The failure to [properly] advise their clients about and to clearly and properly define in the documents the sequence of events to occur at the time of the transfer or conveyance of the West Side [property] (on November 8, 1993) in a manner which fully protected their clients, including, but not limited to[,] the failure to advise that the documents should have contained the requirement that SAIGA must transfer, in 1993, title to the West Side [property] in exactly the same condition as it was conveyed to SAIGA; and

"f. The failure to advise [Sammis] to secure SAIGA's performance with a first deed of trust, or other documents or recorded agreements on the property and the failure to record such documents. This first deed of trust or other recorded documents would have secured performance of the non-monetary covenants (of SAIGA's) in the [Purchase] Agreement. Instead, their negligence left their clients with unsecured, naked promises; and

"g. The failure to finalize all material provisions of the Partnership Agreement, especially the Management Agreement, including, but not limited to[,] fees and reimbursements, prior to the transfer of title to SAIGA." (Italics added.)

The complaint alleged that, as a result of that alleged negligent conduct by Brobeck, "Plaintiffs were subjected to the underlying disputes with SAIGA, lost the 'West Side' of the Property and the ability to develop it with SAIGA, and Plaintiffs have suffered damages in the form of lost profits, income and fees which they would have otherwise collected in developing the 'West Side' of the Property . . . ."

Brobeck filed the instant motion for summary judgment, arguing that: "Plaintiffs do not allege Brobeck was involved in the negotiation or documentation of the transaction, or in obtaining the Bankruptcy Court order approving the sale and requiring that the transaction proceed. Rather, Plaintiffs contend Brobeck was negligent for failing to advise them of alleged problems with the [Purchase Agreement] after Plaintiffs had signed the agreement, after the Bankruptcy Court had approved the sale, but just prior to the close of escrow." Brobeck argued it was entitled to summary judgment "[b]ecause Plaintiffs cannot carry their burden of proving their alleged loss would not have occurred 'but for' Brobeck's alleged negligence--stated another way, that 'but for' Brobeck's alleged negligence they would have been able to enter into a better deal, or would have been able to walk away from the [Purchase Agreement and Formation Agreement] they signed and been better off as a result . . . ." Brobeck further argued "the evidence and Sammis'[s] own testimony establish the absence of any viable, much less beneficial, 'better deal' or 'no deal' alternatives." Brobeck argued that because Plaintiffs were contractually bound and under a bankruptcy court order to proceed with the sale by the time it was asked to advise Plaintiffs regarding the escrow, they cannot show they had a viable, much less a better, alternative to completing the sale of the Property to Saiga pursuant to the Purchase Agreement.

Furthermore, although the gist of Plaintiffs' complaint was that Brobeck negligently failed to advise them of the possibility that Hyogo would or could receive a trust deed on the entire Property, including the West Side property, at the time of closing, Brobeck argued Plaintiffs could not present any evidence that both Saiga and Hyogo would have agreed to any other deal (e.g., a trust deed on only the East Side property). Finally, Brobeck argued Plaintiffs could not show they would have been better off with "no deal" because the Stipulation, and bankruptcy court order thereon, provided that, in the event Sellers defaulted and the escrow did not close pursuant to the Purchase Agreement, the Property would be transferred to Bank and then Bank would sell it to Saiga, thereby leaving Plaintiffs without the Property and without any sale proceeds and future development rights relating to the West Side property and with Sammis potentially liable on his personal guarantee of the Bank's loan. Brobeck summarized its argument as follows:

"There is absolutely no evidence from which a jury could legitimately infer that but for Brobeck's alleged omissions in connection with the close of escrow, Plaintiffs would have obtained a better deal, or would have been better off electing to pass on the transaction with Saiga. Rather, the evidence from Plaintiffs themselves makes irrefutably clear (1) the Saiga transaction was Plaintiffs' only deal, (2) Hyogo Bank insisted on a first deed of trust on the east and west side property, (3) the Purchase Agreement permitted this lien, (4) Plaintiffs (and Brobeck) were obligated to close the escrow by contract and Bankruptcy Court order, (5) the escrow did close per the Purchase Agreement, (6) the failure to close would have put Plaintiffs in breach of the Purchase Agreement and violation of the Bankruptcy Court orders, and (7) the 'no deal' alternative would have been disastrous at every turn."

In support of Brobeck's motion for summary judgment, it filed a separate statement of undisputed material facts. Brobeck's separate statement asserted that "[n]o one other than Saiga made a firm offer to purchase the [P]roperty from the bankrupt [Debtors]." It further asserted that Lorenz "was primarily responsible for negotiating and drafting the agreements between Sammis and Saiga" and the "Purchase Agreement permitted Saiga to encumber the east and west side property." It further asserted Sammis, in a bankruptcy court declaration prepared by Lorenz in support of the Saiga transaction, declared: " 'Certainly, the Saiga offer (as finally negotiated) reflects the very best proposal for purchase and development of the [P]roperty which the Debtors have been able to obtain. No other party has proposed a better transaction to the Debtors." Brobeck's separate statement also referred to provisions of the Purchase Agreement, the Formation Agreement, the Stipulation, and the bankruptcy court's orders in support of Brobeck's argument that Plaintiffs (or Sellers) were obligated to close escrow based on the terms set forth in those agreements and court orders and would not have been able to sell the Property to Saiga or another party on more favorable terms. Finally, Brobeck's separate statement noted that Plaintiffs' trial brief (filed before its instant motion for summary judgment) stated: " 'This case is about Brobeck's negligence which occurred in connection with the closing of this real estate transaction.' "

Also in support of Brobeck's motion for summary judgment, it lodged with the trial court various exhibits, including Sammis's initial and supplemental declarations that were filed with the bankruptcy court and excerpts from Sammis's deposition and trial testimonies in the Saiga lawsuit and from his deposition testimony in the instant action.

In opposition to Brobeck's summary judgment motion, Plaintiffs argued Brobeck was negligent because it never advised them "of the extent of a $30 million mortgage against the West Side [p]roperty, and the Plaintiffs closed this transaction based upon the promise that the West Side [p]roperty would be conveyed to the partnership 'free and clear.' " Plaintiffs further argued there were triable issues of fact on the element of causation because they had many alternative transactions better than the Saiga transaction.

Also in opposition to Brobeck's motion for summary judgment, Plaintiffs filed a separate statement of undisputed material facts and opposition to Brobeck's separate statement. Importantly, in response to Brobeck's assertion that Plaintiffs' action focused on its alleged negligence in connection with and at the time of the closing of the Saiga transaction and did not involve negligent negotiation or drafting, Plaintiffs stated:

"[The] essence of this case is that [Brobeck's] negligence in handling the closing of the Saiga deal caused [Plaintiffs] to not receive the deal they had negotiated with Saiga (the deal which did not involve an encumbrance of any type [on] the West Side [p]roperty). . . ."^[18] (Italics added.)

Their separate statement further stated that the "harm or the damage in this case (the imposition of a $30 million lien against [the Property]) occurred during the time when only [Brobeck] represented all [P]laintiffs." It further asserted "Sammis had many alternative deals to the Saiga transaction, including[,] but not limited to, selling portions of the [P]roperty to a third party (other than Saiga), and/or forming a partnership with a third party (other than Saiga) to develop the [P]roperty." It then listed certain potential deals that were "viable and serious alternative[s]" to the Saiga deal and asserted Sammis would have concluded one of those alternative deals had he known a $30 million trust deed encumbrance would be placed on the West Side property in favor of Hyogo.

In response to Plaintiffs' separate statement, Brobeck argued that Plaintiffs did not carry their burden of production to present evidence that would support a finding they more likely than not would have been better off but for Brobeck's alleged negligence. In particular, Brobeck argued Plaintiffs' evidence of purported alternative deals was speculative and contradicted Sammis's bankruptcy declaration in 1990 that the Saiga deal was the best deal available and it was unlikely any other firm offers would materialize in the near future. In support of Brobeck's response, it filed a supplemental separate statement of material facts, which, in general, challenged Plaintiffs' assertion that there were other viable alternative deals. Brobeck also filed a response to Plaintiffs' separate statement of undisputed material facts, which disputed each of Plaintiffs' asserted facts. Brobeck also filed evidentiary objections to Sammis's declaration in opposition to its summary judgment motion and to certain evidence cited in Plaintiffs' separate statement.

After considering the parties' papers and hearing oral argument of their counsel, the trial court issued a minute order granting Brobeck's motion for summary judgment, stating:

"[T]here is no evidence presented in [Sammis's] declarations as to the terms [of the purported alternative deals] such that there is before the Court no evidence of terms in other deals that would have been more advantageous to Sammis. [Plaintiffs argue] that the final deal with Saiga gave [Plaintiffs] nothing of benefit, so that any alternative must be deemed a better deal. However, [Brobeck] points out that closing the Saiga deal did save [P]laintiffs from the possible forfeiture to [Bank] . . . and gave the plaintiff entities at least the prospect for future development. There is no evidence alternative deals would have given [P]laintiffs more than this. [¶] . . . [¶]

"It is undisputed that the [Purchase Agreement] would not preclude Saiga from encumbering the [W]est [S]ide property with a loan [i.e, trust deed]. There appears a question of fact does exist as to whether defendant Brobeck negligently failed to inform Sammis of such a loan or whether it negligently allowed the closing without negotiating a further clause be added placing some limitation on said encumbrance either in amount or length of time. It would appear the Bankruptcy Court would not have disapproved of such a term had one been negotiated between the parties as a condition of closing the escrow. There is no evidence Saiga would have refused such a condition. There is no evidence Saiga would have agreed to such condition. These issues of fact do not reach the issue of but for the malpractice a better deal for [P]laintiff[s] would have resulted as must be found per Viner.

"Thus, a triable issue of fact has not been raised by [P]laintiffs' evidence in opposition to this motion. Neither does it appear possible for [P]laintiff[s] to be in a position to present the requisite better deal or better off result evidence in that [P]laintiff[s] agreed to stop negotiating terms with other potential investors and thus would have no such detailed evidence to present even if the Court were to grant [P]laintiffs additional time to do so to oppose this motion." (Italics added.)

The trial court also found there was no evidence beyond that presented for the legal malpractice cause of action and therefore concluded Plaintiffs could not maintain a separate cause of action for breach of fiduciary duty. Accordingly, on October 8, 2004, the trial court entered summary judgment for Brobeck.

Plaintiffs filed a motion for new trial, challenging the trial court's summary judgment for Brobeck. They primarily asserted that the trial court committed an error of law in granting Brobeck's motion for summary judgment (§ 657(7)). Plaintiffs argued they had presented extensive evidence regarding other offers or options available as alternatives to the Saiga deal. In support of their motion for new trial, Plaintiffs lodged certain exhibits, including a loan commitment letter from Hyogo (Exh. U) and the loan agreement between Hyogo and Kaiza (Exh. V).

Brobeck opposed Plaintiffs' new trial motion, arguing that, in opposing its summary judgment motion, Plaintiffs had not presented evidence to support a finding they would have obtained a better deal or been better off "but for" Brobeck's alleged negligence. Brobeck also objected to certain exhibits lodged by Plaintiffs, including Exhibit V, on the ground they did not show those exhibits were newly discovered and could not have been timely discovered with reasonable diligence.

After considering the parties' papers and hearing oral argument of their counsel, the trial court issued a minute order granting Plaintiffs' motion for new trial, stating:

"The Court finds an error in law, pursuant to . . . [§] 657(7), and grants Plaintiffs' Motion for New Trial, setting aside the grant of summary judgment in Defendant Brobeck's favor.

"[Plaintiffs have] convinced the Court there is an issue of fact as to causation regarding whether there would have been a better deal than the 'Saiga Deal' but for the malpractice of [Brobeck] regarding nondisclosure of the loan on the [W]est [S]ide of the property, per Viner v. Sweet, supra, 30 Cal.4th 1232. This conclusion is based principally upon the (1) [McMillin] deal (Ex. 38[,] Plaintiff[s'] NOL)[;] (2) [Parke-]Randall Capital Corp. deal (Exh. 46, Plaintiff[s'] NOL)[;] [(3)] [Hyogo's loan] commitment letter[;] and [(4)] the loan agreement."

B

Based on our independent review of the record, we conclude that Brobeck, in moving for summary judgment, satisfied its initial burden of production and made a prima facie showing of the nonexistence of any triable issue on the element of causation of the legal malpractice claim against it.^[19] (§ 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851.) Brobeck presented substantial evidence showing it was not more likely than not that Plaintiffs would have obtained a more favorable result or deal "but for" Brobeck's alleged negligence. (Viner, supra, 30 Cal.4th at p. 1244.) In support of its motion for summary judgment, Brobeck's separate statement of undisputed material facts asserted that "[n]o one other than Saiga made a firm offer to purchase the [P]roperty from the bankrupt [Debtors]." Its separate statement further asserted that Sammis, in support of Debtors' application for approval by the bankruptcy court of the Saiga deal, declared:

" 'Certainly, the Saiga offer (as finally negotiated) reflects the very best proposal for purchase and development of the [P]roperty which the Debtors have been able to obtain. No other party has proposed a better transaction to the Debtors.' " (Italics added.)

Furthermore, Brobeck's separate statement noted the bankruptcy court, in approving the Saiga deal, relied on Sammis's declarations and testimony. The bankruptcy court concluded there were no other concrete offers to purchase the Property and found it was unlikely that any other firm offers would materialize in the reasonably near future. Brobeck's separate statement further noted that the bankruptcy court found if the transaction contemplated by the Purchase Agreement was not approved, it was unlikely the Debtors would be able to realize from the sale of the Property a net amount in excess of that offered in the Purchase Agreement.

Brobeck's separate statement also referred to various provisions of the Purchase Agreement, the Formation Agreement, the Stipulation, and the bankruptcy court's orders in support of Brobeck's argument that Plaintiffs (or Sellers) were obligated to close escrow based on the terms set forth in those agreements and court orders, and would not have been able to sell the Property to Saiga or another party on more favorable terms. Its separate statement asserted: "The Purchase Agreement provided that until the close of escrow, the [S]ellers shall not offer to sell the [P]roperty, advertise or market the [P]roperty, or solicit offers to purchase the [P]roperty." It further asserted: "On October 18, 1990, Mr. Miyoshi wrote to Sammis on behalf of Saiga and stated Saiga considers ongoing efforts to sell the [P]roperty to be a material breach of the Purchase Agreement and demanded Sammis immediately cease all efforts to market or sell the [P]roperty." It also asserted: "The Purchase Agreement required [Saiga] and [S]ellers to promptly execute and deliver any escrow instructions requested by the escrow holder consistent with the Purchase Agreement." It noted the Stipulation required the escrow to close according to the terms of the Purchase Agreement. It also noted that under the Stipulation, Bank agreed to release Debtors, Sammis, Sammis Properties, and the Trust from all obligations under the Bank's loan, including obligations as guarantors and under cross-collateralization agreements. Brobeck's separate statement asserted:

"Paragraph 16 of the . . . Stipulation stated: 'It is agreed that, if the escrow fails to close by December 3, 1990 due to a default by [S]ellers, then [Bank's] collateral which is part of the Property shall be transferred to [Bank] pursuant to Bankruptcy Code section 363(k) for a reduction in [Bank's] claim of $24.5 million. In such event, [Bank] shall transfer said collateral forthwith to Saiga for $24.5 million in cash . . . . In such event, this [S]tipulation shall terminate and shall be of no further force or effect, except for the provisions of this paragraph 16.' "

Brobeck's separate statement noted that on October 25, 1990, the bankruptcy court entered the Stipulation as a court order, approved the sale of the Property to Saiga, and ordered that the Purchase Agreement was binding on the parties. Finally, Brobeck's separate statement asserted that in closing the escrow Hyogo required a first deed of trust on all of the Property as collateral for its purchase money loan to Saiga/Kaiza. Accordingly, Brobeck satisfied its initial burden of production and made a prima facie showing that it was not more likely than not that Plaintiffs would have obtained a more favorable result or deal "but for" Brobeck's alleged negligence. (§ 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851; Viner, supra, 30 Cal.4th at p. 1244.)

C

Plaintiffs argue that, in opposing Brobeck's summary judgment motion, they presented evidence showing there was a triable issue of fact on the element of causation. Plaintiffs argue they presented evidence showing, "but for" Brobeck's alleged negligence, they: (1) would have profited from the Saiga deal; or (2) would not have entered into or closed escrow on the Saiga deal and, instead, would have pursued other opportunities to sell or otherwise profit from the Property. We conclude Plaintiffs did not carry their burden below to present evidence showing there is a triable issue on the element of causation.

Plaintiffs note it was Sammis's understanding of the Purchase Agreement that the West Side property would not be encumbered and would be transferred (to the Partnership) "free and clear" of liens and encumbrances three years after the close of escrow. Plaintiffs argue Brobeck was negligent by not advising them and the bankruptcy court, before the close of escrow, that Saiga could, and ultimately did, encumber the West Side property (with a $30 million first deed of trust in Hyogo's favor).^[20] Plaintiffs argue that had Brobeck not been negligent, the Saiga deal could and would have been changed to protect their interest in the West Side property or they would not have entered into the deal. However, focusing on Plaintiffs' separate statement filed in opposition to Brobeck's summary judgment motion (Mills v. Forestex Co., supra, 108 Cal.App.4th at p. 641), we conclude Plaintiffs did not meet their burden to produce sufficient evidence to make a prima facie showing that a triable issue existed whether Brobeck's alleged negligence caused them harm--i.e., but for Brobeck's alleged negligence, it is more likely than not Plaintiffs would have obtained a more favorable result or deal. (§ 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851; Viner, supra, 30 Cal.4th at p. 1244.)

Although their separate statement asserts they "would not have gone forward with the Saiga deal had [they] known that there was a $30 million lien against the West Side [p]roperty, and no mechanism in place for removing the lien," that statement and its citation to paragraph 16 of Sammis's declaration do not present sufficient evidence to support a finding or reasonable inference by a trier of fact that it is more likely than not Plaintiffs would have been able to avoid closing escrow on the Saiga deal. Or, even if they had, the evidence does not show they would have obtained a better result or deal than the Saiga deal.^[21] The undisputed evidence shows that, prior to the closing of the Saiga deal, Debtors held title to the Property and had filed bankruptcy petitions to stave off Bank's foreclosure on the Property. Debtors (together with the other Sellers) entered into the Purchase Agreement with Saiga. Based on the Stipulation among Sellers (Plaintiffs), Saiga and Bank, and Sammis's declaration that the Saiga deal was the best proposal Debtors had received, the bankruptcy court approved the Saiga deal and ordered Sellers (Plaintiffs) to close escrow according to the terms of the Purchase Agreement.

Therefore, although Plaintiffs argue they would not have closed the Saiga deal had Brobeck properly advised them regarding the possibility of a trust deed encumbrance on the West Side property, their separate statement in opposition to Brobeck's summary judgment motion does not support a finding that it is more likely than not that: (1) Saiga would have agreed to cancel the deal; (2) the bankruptcy court would have allowed Plaintiffs not to close escrow according to the terms of the Purchase Agreement; (3) Bank would have been precluded from enforcing the Stipulation's terms, which were adopted by a bankruptcy court order, transferring the Property to Bank in the event escrow did not close (and Bank would have otherwise been precluded from foreclosing on the Property), thereby leaving Plaintiffs with no interest in or proceeds from the Property; and (4) had Plaintiffs been able to avoid closing the Saiga deal and avoid Bank's foreclosure on the Property, they would have been better off without that deal by obtaining a better deal from another party. Despite Plaintiffs' apparent argument that all of those occurrences were possible had they been properly advised by Brobeck regarding the potential, and actual, imposition of an encumbrance on the West Side property, those possibilities, when considered together as links in a logical chain, are too speculative to meet Plaintiffs' burden of presenting sufficient evidence to show a probability that Plaintiffs would have obtained a better result "but for" Brobeck's alleged negligence. (§ 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851; Viner, supra, 30 Cal.4th at p. 1244.) In particular, although Plaintiffs' separate statement identifies many "viable and serious alternative[s]" to the Saiga deal, the existence of viable and serious alternatives does not support a finding or reasonable inference that any of those alternatives were, more likely than not, a "better" deal for Plaintiffs than the Saiga deal.^[22] Also, Plaintiffs do not show it is more likely than not that the bankruptcy court would have allowed them to effectively cancel the Saiga deal and then would have approved any of those other purported viable and serious alternatives to the Saiga deal.^[23]

Furthermore, to the extent Plaintiffs argue they would have negotiated and obtained a better deal with Saiga had Brobeck not been negligent, their separate statement does not contain any asserted statements of fact (or accompanying citations to evidence) that would support a finding or reasonable inference that they, more likely than not, would have received a "better" deal from Saiga had Brobeck not been negligent. At most, Plaintiffs' response to Brobeck's separate statement contains nebulous assertions regarding the purported intentions of Saiga and Hyogo not to encumber the West Side property. In disputing Brobeck's assertion that "Sa