Wednesday, October 19, 2011
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C.A. Revives Suit Over Lawyers’ Mishandling of Oregon Estate
By SHERRI M. OKAMOTO, Staff Writer
The First District Court of Appeal yesterday revived a malpractice action brought by the personal representative of an Oregon estate against two northern California attorneys for allegedly pursuing a meritless action at the behest of the predecessor representative against the decedent’s former business partner, which unnecessarily expended estate assets.
Div. Four explained that the representative had standing under California law to sue the attorneys, but lacked the capacity to do so since his authority to act on behalf of the estate did not extend past the Oregon border.
The panel ruled, however, that remand was necessary for the representative to be afforded an opportunity to obtain ancillary appointment which would vest him with capacity to sue San Mateo attorney Jerry K. Cimmet and Novato practitioner Matthew Pavone in California.
Cimmet, who did not return a MetNews phone call yesterday, and Pavone, who declined comment, were retained in 2004 by Genevieve Smith, who was then serving as personal representative of her late husband’s estate.
The attorneys filed a suit against the decedent’s former business partner in Marin Superior Court, and an adverse summary judgment was entered in 2006.
Undue Influence Claim
Shortly after Smith authorized the filing of the Marin action, the decedent’s children filed a petition in Oregon contesting his will—which left his entire estate to Smith—as the product of undue influence. The children also sued Smith civilly for interference with their inheritance.
In August 2006, a jury in the suit for damages found that Smith had interfered with the prospective inheritance of her husband’s children, and assessed damages of $1.5 million. The following February, a probate judge declared the will invalid and removed Smith as the representative of the estate. She was eventually replaced by the decedent’s son, Daniel Smith, who declined to fund the appeal of the Marin lawsuit or to be substituted in as a party.
That appeal was abandoned, and the decedent’s former business partner allegedly was awarded attorney fees and costs against the estate of “somewhere between $600,000 to $700,000.” Cimmet and Pavone also were allegedly paid about $1.5 million from the estate’s assets from their work.
In April 2008, Daniel Smith, in his capacity as the new personal representative of the estate, sued Cimmet and Pavone for malpractice in the San Mateo Superior Court.
Motion for Judgment
The attorneys moved for judgment on the pleadings, asserting Smith lacked capacity to sue because his authority as a personal representative of a probate estate did not extend beyond the jurisdiction that appointed him, and that he lacked standing since attorney-client relationship existed between them. Judge Gerald J. Buchwald granted the motion based on the latter argument.
Writing for the appellate court, Justice Patricia K. Sepulveda said Buchwald was correct in his assessment of Smith’s capacity to sue in California.
“Under the common law, a personal representative generally cannot sue in his or her representative capacity outside the state of appointment,” she noted, and “California has always followed the common law.”
The justice rejected Smith’s argument that Oregon’s laws permit representatives to prosecute lawsuits in any jurisdiction, since “Oregon’s statute cannot, as a matter of right, confer any authority upon its representatives to prosecute actions in California.”
Sepulveda explained that “[a]s a general practice, a foreign representative who wants to sue, collect claims, or otherwise exercise authority over the decedent’s property situated in California petitions a California court for ancillary probate administration.”
Since “a cause of action to recover monetary damages on behalf of an estate is a local asset that provides a basis for ancillary administration,” Sepulveda said Smith “should be given an opportunity to cure the [complaint’s] deficiency by petitioning for ancillary administration and then amending the complaint to allege capacity to sue as the ancillary representative.”
She went on to conclude that a successor representative has standing to sue attorneys retained by a prior representative for alleged malpractice in representing the interests of a probate estate, based on the California Supreme Court’s 2004 ruling in Borissoff v. Taylor & Faust, 33 Cal.4th 523.
In that case, the high court construed Probate Code Sec. 8524(c)—which states that a “successor personal representative has the powers and duties in respect to the continued administration that the former personal representative would have had,” which, pursuant to Sec. 9820(a), includes the authority to “[c]ommence and maintain actions and proceedings for the benefit of the estate”—as providing that “if the fiduciary who hired the attorney is replaced, the successor acquires the same powers the predecessor had in respect to trust [or estate] administration.”
Sepulveda reasoned that “the law of California and Oregon are the same on this issue,” and even if the states differed, “there is no true conflict because California has a compelling interest in regulating California attorneys, and Oregon has none,” so California’s laws would control, and Smith would have standing to sue in this state.
Smith was represented on appeal by Sacramento attorney Patrick J. Waltz, who remarked that yesterday’s decision “was good news.” He said his client was “very pleased” to have the malpractice action revived, and they were prepared “to get ancillary jurisdiction set up and to move forward.”
Efforts to reach the attorneys who represented Cimmet and Pavone—Heather L. Rosing and David M. Jajchrzak of Klinedinst PC, and Joseph M. McMonigle, Jessica R. MacGregor, and Helen M. McFarland of Long & Levit—were unsuccessful.
Presiding Justice Ignazio J. Ruvolo and Justice Timothy A. Reardon joined Sepulveda in the decision.
The case is Smith v. Cimmet, A129586.
Copyright 2011, Metropolitan News Company