TAYE v.DRUMGOOLE






Filed 1/14/11






CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

Conservatorship of the Estate of IDA MCQUEEN.
FESSHA TAYE, as Conservator, etc., Petitioner and Respondent, v. EARLINE DRUMGOOLE et al., Objectors and Appellants.	A126825 (Alameda County Super. Ct. No. HP05237122)

Story Continued From Part I………….




In making this argument, Reed fails to acknowledge the evidence on which the jury could base a finding that she took or assisted in taking McQueen’s property for a wrongful use under a reasonable person standard.[1] Viewed in the light most favorable to respondents and with all conflicts resolved in their favor, this evidence included Reed’s role in preparing the final order of distribution, which contained all of the terms of Earl Blacksher’s trust, thus proving that Reed had knowledge of the will and life estate provisions critical to this case. Despite this knowledge, Reed advised family members that McQueen’s life estate had ended and the house could be sold. Reed told the title company to deposit the proceeds from the sale of the family residence into her trust account, and she alone took responsibility for deciding how the proceeds should be distributed. Reed further admitted that she did not discuss the sale with McQueen nor did she ever inform the probate court that she was taking these actions. She also acknowledged it was her idea to have McQueen sign a power of attorney “because all kinds of things can come up.” For all the above reasons, the jury could find that Reed appropriated or assisted in appropriating McQueen’s property for a wrongful use while relying on the reasonable person standard.
Switching approaches, Reed argues that because she was a licensed attorney, expert testimony was necessary to prove the reasonableness of her actions as an attorney. However, it was appellants themselves who made the strategic decision, in pretrial motions in limine, to argue that standard of care evidence proffered by respondents should be precluded because there was no cause of action alleged for legal malpractice. The record reflects that the court granted the motion in limine to preclude standard of care testimony, agreeing with appellants as to that issue. Accordingly, Reed cannot now complain that the court improperly denied the introduction of such evidence. (Jentick v. Pacific Gas & Elec. Co. (1941) 18 Cal.2d 117, 121 [under the invited error doctrine, a party may not challenge a trial court finding made at his or her counsel’s urging].)
Reed also claims she was deprived of her right to present a defense to the charge of financial elder abuse when the court placed overly strict limitations on her testimony. When Reed testified and was asked whether she was familiar with other cases in which a life estate had ended, the court sustained respondents’ objection to this line of questioning based on relevance. Reed claims the court abused its discretion by barring her from testifying to this point because “[w]ithout allowing [appellant] the chance to explain the reasoning behind her conclusion that [McQueen’s] life estate had ended, the jurors had little choice but to conclude she acted unreasonably.”
The trial court has wide latitude in determining the relevance of proffered evidence. (City of Ripon v. Sweetin (2002) 100 Cal.App.4th 887, 900-901.) We review the trial court’s evidentiary rulings for abuse of discretion (id. at p. 900), and here we perceive none. To complain now that Reed was not permitted to explain her actions or her state of mind is disingenuous. First, the court allowed Reed to testify extensively that it was her opinion as an experienced probate attorney, who was a certified specialist in the areas of probate and estate planning and served as a judge pro tem in probate court, that McQueen’s life estate had terminated prior to sale because McQueen had stopped paying taxes on the property and had no ability to pay taxes, and because she could no longer reside in the subject property, among other reasons. The jury was instructed on applicable sections of the Probate Code and the Civil Code as requested by Reed in this regard Reed was also allowed to testify as to her good faith belief and opinion that if the defendants distributed any of the proceeds from the sale of the house to McQueen (cash or rental income) they would be jeopardizing McQueen’s government assistance benefits. Reed’s expert witness was allowed to testify that, in his opinion, setting up a special needs trust to avoid McQueen’s governmental assistance benefits from being depleted was not feasible nor advisable in this case.
In view of this record, the trial court’s reluctance to delve into the specifics of legal cases that ostensibly supported appellant’s opinion that McQueen’s life estate had terminated, was not an abuse of discretion. Even if these cases had some tangential relevance to the issues at trial, the probative value of this evidence would have been vastly outweighed by the probability that it would have required an undue consumption of time to review the relevance and materiality of each proffered case, and to compare each case to the fact pattern of this case. Furthermore, it was fair for the trial court to implicitly conclude that this line of inquiry was likely to confuse the issues and to mislead the jury. (Evid. Code, § 352.) We find no abuse of discretion in the trial court’s exclusion of the evidence.

Reed next argues that she was unfairly surprised when, after disallowing expert testimony on the standard of care for an attorney, the court instructed the jury on certain provisions of the State Bar’s Rules of Professional Conduct in connection with the cause of action for breach of fiduciary duty. In connection with respondent’s claim for breach of fiduciary duty,[2] Reed testified that in advising McQueen about executing a power of attorney in favor of appellant Earline Drumgoole, she was acting both as Drumgoole’s attorney and as McQueen’s attorney. Thus, there was an issue, potentially confusing to the jury, as to a lawyers’ duty of loyalty when representing two or more clients at the same time with potentially conflicting interests. At respondent’s request, the jury was instructed on certain provisions of the Rules of Professional Conduct, specifically, rule 3.310 (relating to the representation of an adverse interest) and rule 3-500 (an attorney’s duty to keep the client informed of significant developments). The jury was instructed that, in considering the state of mind and reasonableness of Reed’s actions, the Rules of Professional Conduct could be considered if they applied.

Reed claims that it was error to instruct the jury in the language of the Rules of Professional Conduct, over counsel’s objection, because they “have no application to the evidence in the case . . . .” While the Rules of Professional Conduct do not give rise to a separate cause of action,[3] they can inform the scope of an attorney’s duties in an action for breach of fiduciary duty. As the court stated in Mirabito v. Liccardo (1992) 4 Cal.App.4th 41, “It is well established that an attorney’s duties to his client are governed by the [Rules of Professional Conduct] . . . . Those rules, together with statutes and general principles relating to other fiduciary relationships, all help define the duty component of the fiduciary duty which an attorney owes to his client. [Citation.]” (Id. at p. 45.) As such, rules 3.310 and 3-500 of the Rules of Professional Conduct were relevant because they helped to define the duty component of Reed’s fiduciary duty to her clients. (Accord, American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal.App.4th 1017, 1032.)

Reed next claims that “no reasonable trier of fact could conclude that [appellant] owed [McQueen] a fiduciary duty as an attorney at the time that house was sold and the sales proceeds distributed and the trial court should never have let such a question go to the jury.” To the contrary, the jury was properly instructed as to when a fiduciary duty is owed by an attorney, and what constitutes its breach. The jury’s responses on the special verdict form reflected its conclusion that Reed was acting on behalf of McQueen as her attorney, that Reed breached her duty as an attorney to act with “utmost good faith” toward McQueen who was her client and/or the trust beneficiary, that McQueen was harmed, and that Reed’s conduct was a substantial factor in causing McQueen harm.[4]

Reed next argues that even if the instructions were legally correct, there was “no legal basis” for the jury to conclude that she owed McQueen a fiduciary duty in either her capacity as McQueen’s attorney or as the drafter of the trust in which McQueen was a beneficiary. “ ‘ “[F]iduciary” and “confidential” have been used synonymously to describe “ ‘. . . any relation 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 ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation 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. . . .” ’ [Citations.]” (Richelle L. v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257, 270.) Of pertinence to this case, “the law of trusts, a great deal of which is statutory, defines the nature of the fiduciary duties arising out of that particular fiduciary relationship with considerable precision. [Citation.]” (Id. at p. 272.)
It was alleged in respondent’s first amended complaint that Reed breached her fiduciary duty to McQueen because “[a] trustee’s attorneys are bound to act in the highest good faith toward all beneficiaries, and may not obtain any advantage over the latter by misrepresentation, concealment, threat or adverse pressure of any kind. When an attorney undertakes a relationship as advisor to a trustee, he in reality also assumes a relationship with the beneficiary akin to that between trustee and beneficiary.”
Under this theory, Reed could clearly be held liable for breaching a fiduciary duty. (City of Atascadero v. Merrill Lynch Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445; 464 [“trust beneficiaries may sue third parties who participated with a trustee in alleged breaches of trust, as long as the third parties’ participation was both active and for the purpose of advancing their own interests or financial advantage”]; Pierce v. Lyman, supra, 1 Cal.App.4th at p. 1106 [allegations “demonstrate[d] that [the attorneys] are accused of active participation in breaches of fiduciary duty by the former trustees” and these allegations were “sufficient to state a cause of action for breach of fiduciary duty”]; Wolf v. Mitchell, Silberberg & Knupp (1999) 76 Cal.App.4th 1030, 1040 [holding that a beneficiary had standing to sue a trustee’s attorneys where the attorneys were alleged to have actively concealed the dissipation of trust assets].)
C. Did Respondent State a Cause of Action for Conversion‌
All appellants finally claim that the trial court erred in allowing the jury to decide the cause of action for conversion arguing that the proceeds from the sale of the family residence could not form the basis of a conversion action. They rely on the general proposition that a “generalized claim for money [is] not actionable as conversion. [Citation.]” (Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 235.)
A cause of action for conversion requires “(1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Burlesci v. Peterson (1998) 68 Cal.App.4th 1062, 1066.) It is clear that legal title to property is not a prerequisite to maintaining an action for damages in conversion. To establish a conversion action “it is not essential that plaintiff shall be the absolute owner of the property converted but she must show that she was entitled to immediate possession at the time of conversion. [Citations.]” (Bastanchury v. Times-Mirror Co. (1945) 68 Cal.App.2d 217, 236, italics omitted; Hartford Financial Corp. v. Burns (1979) 96 Cal.App.3d 591, 598.)

The court ruled that McQueen had a life estate interest in the subject property. As the trial court found, there was no ambiguity with regard to the intent of the testator, Earl Blacksher––that in creating a life estate in the family home, he intended McQueen to hold the interest for the duration of her life, including an interest in any income that might result from the house, with the residue to be distributed to the indicated remaindermen after her death. Therefore, when the property was sold, the proceeds should have remained in trust for McQueen’s use, including the generation of income. Instead, when appellants sold the family home, without McQueen’s knowledge or consent, they distributed the proceeds among themselves. Courts have enforced conversion claims in similar circumstances.
“Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment. [Citation.]” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1491.) Accordingly, “California cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others. [Citations.]” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 396.) The case of Fischer v. Machado (1996) 50 Cal.App.4th 1069, is particularly relevant. In Fischer, corporate officers were held liable for taking the plaintiffs’ funds, held in trust by the corporation, and using those funds for the corporation’s general expenses. The court explained that “an agent, with knowledge of another’s right to receive a specific amount of money, can be liable for conversion when he applies it for his own use.” (Id. at p. 1073; see also Chazen v. Centennial Bank (1998) 61 Cal.App.4th 532, 543 [plaintiff stated a cause of action for conversion where bank allegedly took funds from trust account to pay the trustee’s personal indebtedness].)
Appellants’ use of funds received in connection with the sale of the family residence for their own benefit, impairing McQueen’s right to the proceeds of the sale under the terms of the trust, constituted conversion since, as a matter of law, appellants had the obligation to use the money they received for McQueen’s benefit during her lifetime.
D. Were the Attorney Fees and Costs Awarded Respondent Excessive‌
Having been found liable for financial elder abuse, appellant Reed acknowledges that under Welfare and Institutions Code section 15657.5, subdivision (a), she is liable for reasonable attorney fees and costs, including reasonable conservator’s fees. (See Wood v. Santa Monica Escrow Co. (2007) 151 Cal.App.4th 1186, 1189 [attorney fees and costs are mandatory when a defendant is found liable for financial abuse of an elder].) However, she claims the amount awarded ($320,748.25) was excessive. She argues that much of the lawsuit related to the other defendants and other causes of action such as conversion, negligence, and breach of fiduciary duty, which do not have a right to attorney fees. Consequently, she claims the court erred in not requiring respondent’s counsel to apportion the fee award between financial elder abuse and nonfinancial elder abuse claims.
In Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, this court stated the general rule with respect to apportionment of attorney fees: “When a cause of action for which attorney fees are provided by statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the statutory cause of action. However, the joinder of causes of action should not dilute the right to attorney fees. Such fees need not be apportioned when incurred for representation of an issue common to both a cause of action for which fees are permitted and one for which they are not. All expenses incurred on the common issues qualify for an award. [Citation.] When the liability issues are so interrelated that it would have been impossible to separate them into claims for which attorney fees are properly awarded and claims for which they are not, then allocation is not required. [Citation.]” (Id. at p. 1133.)
In considering Reed’s argument that attorney fees should be apportioned, the trial court determined “[i]n this case, the evidence developed by plaintiffs’ counsel to prove the elder abuse claim is overlapping, if not the same, evidence introduced to prove plaintiffs’ claims of fraud, breach of fiduciary duty, and conversion. That body of evidence was introduced against all defendants, who were alleged agents of each other.” The trial court determined that the causes of action in this case were “based upon a common core of facts and course of conduct that involved all named defendants, and the issues on them inextricably intertwined as to preclude reasonable apportionment of plaintiff’s attorney fees.”
“Where fees are authorized for some causes of action in a complaint but not for others, allocation is a matter within the trial court’s discretion. [Citation.] A trial court’s exercise of discretion is abused only when its ruling ‘ “ ‘ “exceeds the bounds of reason, all of the circumstances before it being considered.” ’ ” [Citation.]” (Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 555.) Furthermore, “[t]he trial court, having heard the entire case, [is] in the best position to determine whether any further allocation of attorney fees was required or whether the issues were so intertwined that allocation would be impossible. [Citation.]” (Id. at p. 556.)
Given the deferential standard of review, we conclude Reed has failed to show the trial court’s ruling constituted an abuse of discretion. In Drouin v. Fleetwood Enterprises (1985) 163 Cal.App.3d 486, the court said: “Attorney fees need not be apportioned between distinct causes of action where plaintiff’s various claims involve a common core of facts or are based on related legal theories. [Citations.]” (Id. at p. 493.) This is such a case. Respondent’s first amended complaint shows that each cause of action arose from a common factual nucleus––that the family residence in which McQueen held a life estate was sold without her consent and without court authorization and the sale proceeds distributed to others “without payment of any cash or benefit to Ida McQueen,” in violation of the terms of the trust set up for her benefit. Here, the trial court could reasonably find that appellants’ various claims were “factually intertwined” making it “impracticable, if not impossible, to separate the multitude of conjoined activities into compensable or noncompensable time units.” (Fed-Mart Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 227.)
IV.
Disposition
The judgment is affirmed.






_________________________
RUVOLO, P. J.


We concur:


_________________________
REARDON, J.


_________________________
SEPULVEDA, J.















A126825, Conservatorship of McQueen

Trial Court: Alameda County Superior Court

Trial Judge: Hon. Jo-Lynne Lee

Counsel for Appellants: James E. Reed

Counsel for Respondent: Law Offices of Daniel D. Murphy,
Daniel D. Murphy


































A126825, Conservatorship of McQueen




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