C.A. Says Requisite ‘Independent Legal Duty’ Is Alleged in Form of Attorney, in Advising Plaintiff’s Step Father, Utilizing Knowledge He Gained in Representing Her as to Her Lack of Sophistication, Financial Woes
By a MetNews Staff Writer
Div. One of the Fourth District Court of Appeal has ordered that a court permit an amendment to a complaint to allege that an attorney conspired with the plaintiff’s late stepfather, a multi-billionaire media tycoon, to deprive her of funds from her mother’s testamentary trust.
The proposed “threadbare” cause of action adequately alleges the breach of a duty on the part of the attorney not to use knowledge he gained in the course of representing her against claims of creditors as to her lack of sophistication and desperation, the unpublished opinion, filed Monday, declares.
Plaintiff Acela Cortese maintains that San Francisco attorney John Sherwood had complicity in efforts to cheat her out of money from a trust set up by her mother. After the mother’s death, she contends, her stepfather, Robert Naify (now deceased), as executor of the estate and successor trustee, caused her trust to be underfunded and induced her to sign an unfair agreement terminating the trust.
Naify had owned the movie theater chain United Artists Theatres.
At issue was whether the action was barred—as San Francisco Superior Court Judge John Stewart found it was—by Code of Civil Procedure §1714.10(a), which provides, in part:
“No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action.”
Cortese maintained that §1714.10(c)applies. It says:
“This section shall not apply to a cause of action against an attorney for a civil conspiracy with his or her client, where (1) the attorney has an independent legal duty to the plaintiff….”
Justice Gordon B. Burns of Div. Five agreed with Cortese. He wrote:
“Although her allegations are quite general, Cortese has sufficiently alleged that Sherwood breached his duty as her former attorney not to use her confidential information to her detriment.
“Assuming, as we must, the truth of Cortese’s allegations…, and in light of our obligation to construe her pleadings liberally..., Sherwood had a duty not to use information he learned about Cortese’s lack of financial sophistication or desperate financial circumstances in the course of assisting Robert in defrauding her by underfunding the trust and negotiating the trust termination agreement.”
“Sherwood incorrectly contends that because Robert had access to the same information, Sherwood had no duty to protect it or refrain from using it. To the contrary, information learned during the course of the representation, including publicly available information and information that is merely embarrassing, may constitute a client secret that an attorney must protect and refrain from using against the client….
“Further, information about how a client’s mind works can constitute confidential information that an attorney must refrain from using to the client’s detriment.”
Burns observed that the allegations of the complaint “are threadbare,” but that, he said, does not mean they are inadequate.
“Whether Cortese can prove that Sherwood owed and breached a duty is another matter,” he said.
The case is Cortese v. Sherwood, A157259.
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