Tuesday, February 21, 2017
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C.A. Rejects Joint Venture Theory in Suit by Wildfire Victim Against San Diego Lawyers
By a MetNews Staff Writer
A businesswoman who claims to have been abandoned by the attorney that she retained to bring a fire-damage lawsuit cannot bring a malpractice suit against two firms she claims were engaged in a joint venture with him to handle related lawsuits, the Fourth District Court of Appeal ruled Friday.
Div. One, in an unpublished opinion by Justice Joan Irion, affirmed summary judgment in favor of Frantz Law Group and Keegan & Baker, LLP.
Tobi Blatt and Adacas Group, LLC, Blatt’s northern San Diego women’s clothing chain, retained Todd Macaluso to represent them in claims against San Diego Gas & Electric Company for damage to four of the company’s stores in the 2007 area wildfires.
The San Diego Union-Tribune reported in December 2014 that the company had resolved all but a handful of some 2,600 claims, paying about $2 billion. The company conceded that its equipment sparked some of the blazes but never admitted liability.
Blatt signed a retainer agreement, naming Macaluso & Associates as her counsel. But when she called the firm a month later, she said, she was told by a paralegal that the agreement had not been received and that she would be sent a new one.
The second agreement named the Macaluso, Frantz, and Keegan firms as counsel, and said she would be represented “as a plaintiff and a representative of a class of individuals.” She signed the agreement, returned it to Macaluso’s office, and sent copies to the other two firms.
Blatt received a copy of the agreement signed by Macaluso, but there was no evidence anyone at the Frantz firm or the Keegan firm ever signed it.
Sad Discovery
Blatt alleged in her malpractice complaint that she believed that she was being represented by Macaluso and by the other two firms until December 2013, when she became concerned and contacted new counsel. That lawyer informed her that no lawsuit had ever been filed and that the statute of limitations had expired.
State Bar records showed that Macaluso had been embroiled in disciplinary proceedings since 2010. He entered the State Bar’s Alternative Discipline Program, citing mental health issues, and was placed on probation in 2012.
He was subsequently convicted of wire fraud, however, in what the Union-Tribune said was an investment scheme in which he sold interests in his clients’ cases to investors, forging the clients’ signatures on documents. He was sentenced to five months in custody, and was summarily disbarred last November.
The newspaper reported a short time later that Macaluso, an experienced pilot, had been arrested in Haiti and charged with smuggling large quantities of cocaine.
Joint Venture Claim
In suing the Frantz and Keegan firms, Blatt alleged that they were part of a joint venture with Macaluso to represent her and other wildfire victims, and thus shared liability for failure to file a complaint. San Diego Superior Court Judge Joel Wohlfeil disagreed and granted summary judgment, saying neither firm ever assumed a duty to represent Blatt.
Irion, writing for the Court of Appeal, agreed with the trial judge.
The joint venture theory fails, the justice explained, because a signed document cannot, under the Corporations Code, be deemed to create a joint venture or partnership—the terms are synonymous, Irion said—unless signed in the name of that enterprise.
The jurist went on to say that the undisputed evidence in the case establishes that the two law firms did agree to join with Macaluso to represent certain clients, but that there was no evidence that Blatt and her company were among them. Attorneys from those firms explained that they had vetted every case that Macaluso proposed they join, and that they had accepted or rejected them on an individual basis, but Blatt’s case had never been discussed.
In fact, Irion noted, there was no evidence that anyone at those firms had ever heard of Blatt or Adacas before being sued by them, nor any evidence that they agreed to allow Macaluso to bind them to representing any client.
It would be unreasonable as a matter of law, the justice said, to infer from the evidence that the two firms accepted Blatt and Adacas as joint venture clients.
The only reasonable explanation of what occurred, she said, is that proffered by defendants—that there was never any consideration of her case being handled by a joint venture, and that Macaluso’s paralegal erred in sending Blatt an unexecuted agreement with signature blocks for the Frantz and Keegan firms, instead of merely resending the original agreement retaining Macaluso alone.
The case is Blatt v. Frantz Law Group, D069749.
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