Wednesday, June 24, 2020
Court of Appeal:
Aronson Says Defendant Owed No Fiduciary Duty to Ex-Spouse to Alert Her to Son’s Gambling, Thefts; He Was No Longer a Law Partner of His Thieving Son
By a MetNews Staff Writer
A woman whose step-son, an attorney, stole $558,371.13 from her was not entitled to a directed verdict in a case in which she blames her ex-husband for the loss based on his failure to alert her that his son by a previous marriage was addicted to gambling, Div. Three of the Fourth District Court of Appeal held yesterday.
Plaintiff Wendy Sawyer contended that her former spouse, retired lawyer Stephen D. Sawyer, had a fiduciary duty to her in mid-2015—when he allegedly learned of the gambling and stealing—because he was a partner in the law firm of Sawyer & Sawyer to which she was paying a monthly retainer of $25,000. Had she been told of the thievery at that time, she argued, she could have blocked the losses, most of which occurred in 2015.
She did not find out about the stepson’s filching until the following year.
Joining her as plaintiffs were five of her companies, which had been represented by the step-son, Jason R. Sawyer.
“[S]ubstantial evidence supports the finding Stephen was not a partner with Sawyer & Sawyer,” Justice Richard M. Aronson said in yesterday’s unpublished decision. “That finding necessarily dooms the breach of fiduciary duties claim because Stephen’s purported partnership status was the only basis for plaintiffs’ contention he owed them fiduciary duties.”
The plaintiffs argued that Stephen Sawyer had, in fact, been a partner, evidenced by his one percent ownership of Sawyer & Sawyer, that he was listed on the firm’s malpractice insurance policy, and the firm’s website identified him as senior partner.
That, Aronson declared, was not enough. He wrote:
“Under the case law, Stephen’s status as a Sawyer & Sawyer partner depended on proof Stephen and Jason shared profits and losses and otherwise ‘acted as coowners’ of the firm at the relevant times….We found no authority supporting plaintiffs’ contention Stephen’s one percent ownership interest in Sawyer & Sawyer, inclusion in the firm’s malpractice policy, and website listing as a partner, established he was a partner as a matter of law.”
The plaintiffs asserted that Orange Superior Court Judge Thomas A. Delaney erred in excluding evidence that Stephen Sawyer learned of his son’s gambling and stealing in mid-2015, rather than in 2016, as he claimed. Aronson responded:
“Because Stephen had no legal duty to warn Wendy of Jason’s gambling and stealing, the wrongful exclusion of evidence on when Stephen learned about Jason’s gambling and stealing could not have affected the verdict.”
Stephen Sawyer cross complained against his ex-wife based on breaches of the marital settlement agreement, and insisted on appeal that Delaney should have awarded $597,740.34 in attorney fees but set the amount at $221,292.82. The appeals court found that the trial judge correctly interpreted the breadth of the attorney-fee provision of the agreement.
The case is Sawyer v. Sawyer, G056510.
Attorneys on appeal were Michael W. Caspino, Robert M. Dato and Megan M. Holbrook of the Buchalter firm for Wendy Sawyer and her companies; former Los Angeles County Bar Association President Edith R. Matthai and T. John Fitzgibbons of Robie & Matthai for Stephen D. Sawyer; and Earll M. Pott, Harold C. Trimmer and Robert M. Shaughnessy of Klinedinst for Jason R. Sawyer and Sawyer & Sawyer.
In a separate unpublished opinion filed yesterday, the Fourth District’s Div. Three affirmed Orange Superior Court Judge Franz E. Miller’s order denying Wendy Sawyer’s motion to vacate the portion of of the 2014 dissolution judgment that requires her to make an equalization payment to Stephen Sawyer, in installments, of $1.16 million.
She claimed the provision was the product of fraud, but brought her motion more than one year after learning of her step-son’s embezzlememt which caused her to suspect collusion between him and her ex-husband in formulating the marriage settlenmt agreement. Family Code §2122 sets a one-year time bar on such motions.
Aronson said it is unnecessary to decide if if equitable tolling applies to such motions because, in any event, Wendy Sawyer failed to meet the requisites for an equitable tolling.
That case is Marriage of Sawyer, G056677.
Jason Sawyer is currently facing State Bar disciplinary charges. It is alleged that “[b]etween in or about May 2013 and in or about April 2016, Respondent intentionally and dishonestly misappropriated the approximate sum of $558,371.13 from his client and/or her financial interests to fund his gambling addiction, including $121,600 in cash from his client’s safety deposit boxes” and “thereby committed acts involving moral turpitude, dishonesty or corruption.”
Charges were filed Dec. 14, 2016, but the matter has been on hold pending resolution of litigation. A status conference was slated for last month but all disciplinary matters were abated when the State Bar closed its Los Angeles and San Francisco office on March 17 owing to the coronavirus epidemic.
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