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JOHN LEWELLEN, as Administrator, etc v. THEODORE PHILLIPS et al


November 30, 2010


The opinion of the court was delivered by: Butz, J.

Lewellen v. Phillips



California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

"If you don't like something change it; if you can't change it, change the way you think about it." ~ Mary Engelbreit.

This is yet another appeal arising out of Evelyn Wade's*fn1 dissatisfaction with a settlement agreement she entered into with her granddaughter, Gail Stark, and Gail's husband, Gregory Stark (the Starks). Wade sued the Starks for fraud and elder abuse, seeking to rescind a transfer she had made to them of a parcel of real property in Lincoln, owned by Wade and her husband. The case was settled at a mandatory settlement conference presided over by Placer County Superior Court Referee David Bills.

Subsequently, Wade changed her mind and repudiated the settlement. The Starks obtained a judgment enforcing it over Wade's objection that she agreed to it under duress and that it was contrary to her incapacitated husband's best interest. We affirmed that judgment in Wade v. Stark (Dec. 4, 2007, C053232 & C054415) [nonpub. opn.] (Wade I).)

Having lost her appeal in Wade I, Wade turned her wrath on her own attorneys. She filed the present lawsuit against Attorneys Robert Ash, Theodore Phillips and his firm of Phillips, Greenberg and Hauser for attorney malpractice and breach of fiduciary duty, claiming that they "badgered" her into agreeing to a "terrible" settlement.

Phillips and his firm (collectively Phillips) successfully moved for summary judgment. Wade appeals again, contending the trial court committed prejudicial error in finding no triable issue of fact. Once more, we shall affirm.


The Wade I Lawsuit

We summarize the relevant facts that are not subject to dispute. Some are drawn from our written decision in Wade I, which was before the trial court on Phillips's motion for summary judgment, and of which we take judicial notice.

For many years, Evelyn Wade and her husband Kendall owned a 20-acre parcel of land in Lincoln, on which they had built a residence. The property is divisible into two 10-acre parcels. The Starks reached an agreement with Wade, under which the Starks would purchase the entire 20-acre parcel and a 10-acre parcel would, in turn, be sold to the Wades' longtime neighbors, Jeffery and Vivian Graham (the Grahams). In March 2003, Wade executed and recorded a (corrected) grant deed of the parcel to the Starks. The Starks executed a $400,000 promissory note payable to the Wades, due by December 1, 2012, but without provision for interest or monthly payments. As additional consideration, the Starks promised to provide full-time care for the Wades for the rest of their lives.

Wade's handwritten offer to sell the property stated that her husband had Alzheimer's disease and was unable to conduct business, but that she had a "durable power of attorney," giving her authority to sign his name, "which includes all property and real estate." However, it was later discovered that Wade had only a nondurable power of attorney.

After receiving title to the property, the Starks entered into an agreement to sell half the acreage to the Grahams. The sale was halted when the Wades sued the Starks and the Grahams, seeking to rescind the 2003 transfer. The complaint also sought damages for breach of fiduciary duty, infliction of emotional distress and elder abuse.

Wade's complaint against the Starks and the Grahams was filed by Attorney Robert Ash. In June 2005 (all further unspecified calendar dates are to that year), Ash associated Phillips as co-counsel. Phillips prepared the case for trial and obtained a postponement of the trial date until December 6.

In the meantime, Wade authorized Phillips to conduct settlement negotiations with the defendants. Although no settlement was reached with the Starks, Wade did settle her case against the Grahams.

The Settlement Conference and Agreement

Prior to the settlement conference, Phillips told Wade he was ready and willing to try the case for her. He advised her that although there was a chance she might lose, he thought her case was meritorious and that she would prevail. In October, Wade told her attorneys she did not want to settle and wanted to go to trial.

A mandatory settlement conference was held on November 18, by which time Wade had been appointed guardian ad litem for the 90-year-old Kendall, who was suffering from dementia. Before the conference began, Wade told Phillips her back was hurting her and that she had taken several prescription drugs and antidepressants. Phillips asked Wade if this would interfere with her proceeding with the settlement conference. She assured him that it would not, and that she was "okay."

The settlement conference was delayed until 1:30 p.m., so Wade, her sister (Louise Hansen), Phillips and Ash had lunch together. The group discussed the possibility of settling the case by having the Wades and Starks divide the net sale proceeds from the sale of the property. Wade, however, announced, that she "[didn't] want to sign anything."

Referee David Bills conducted the settlement conference. Attorney Ash left the conference early on and did not return. Wade's sister accompanied her and was allowed to participate. All negotiations were conducted through Bills.

Referee Bills "did most of the talking" at the settlement conference. He told Wade he had gone through the papers and it was his opinion that she needed to settle the case. Shaking the papers at her, Bills told her, "I know something you don't know"; that he believed the Starks were a "wonderful, honest couple"; and that if he were the judge, he would be inclined to rule in their favor.

This made Wade very upset. She confided to Phillips that Referee Bills "scared [her] to death." Phillips suggested that the conference be postponed, but Bills rejected the idea.

Through Referee Bills, the Starks offered to sell the property and divide the net proceeds 60 percent to the Wades and 40 percent to the Starks. With Wade's consent, Phillips made a counteroffer on similar terms, except that the Wades would get 90 percent and the Starks 10 percent. The Starks responded with their own counteroffer, dividing the proceeds 70 percent to the Wades and 30 percent to the Starks. Phillips told Wade he could not recommend acceptance of this offer. However, Wade told Phillips she did not want to go to trial. Phillips asked Bills if they could submit another counteroffer, but Bills made it clear that this was the Starks's final offer and they would not negotiate further.

Wade and her sister went outside to discuss the settlement offer together on the porch of a cocktail restaurant. Wade "cried" when they talked about it. Feeling intimidated by Referee Bills's threats, influenced by the medication she was taking and fearful she would lose if she went to trial, Wade agreed to accept the Starks's offer.

By this time the courthouse was closed, so Phillips, Referee Bills and the Starks's counsel jointly prepared a memorandum of the settlement agreement on a sheet of paper. Afterward, Phillips went over it with Wade, who questioned him about its terms and signed it at 6:00 p.m. that day. During this meeting, Phillips told her "[e]verything is in here for you," "you will be okay," and "you can go on with your life."

At the conclusion of the conference, Wade had a pleasant conversation with Bills in the parking lot. She told him she felt better that the case was over.

Wade Reneges on the Agreement

Not long after signing the agreement, Wade repudiated it, prompting the Starks to file a motion to confirm the agreement and compel its enforcement. (Code Civ. Proc., § 664.6.)*fn2

Wade opposed the motion on two principal grounds: (1) the agreement was not in the best interest of her husband, and (2) her consent was obtained by duress, i.e., she was bullied into it by Referee Bills while in a fragile emotional state and under the influence of heavy medication. The trial court granted the Starks's motion to confirm the agreement and entered judgment, ruling that the settlement was in Mr. Wade's best interest and that Wade's repudiation was "arbitrary."

In Wade I, we affirmed the trial court's judgment. Based on our review of the record, we found that "the record overwhelmingly demonstrates that Wade simply experienced a change of heart after agreeing to the settlement. This is not a valid ground for avoiding a contract."

The Present Action

The California Supreme Court denied review in Wade I on February 13, 2008 (Wade I, supra, C053232 & C054415, review den., S158387). On March 24, 2008, Wade filed the present lawsuit against Attorneys Ash*fn3 [3] and Phillips. The complaint posits two causes of action: attorney malpractice and breach of fiduciary duty. The gist of the complaint is that Phillips committed malpractice by failing to be an advocate at the settlement conference, by failing to obtain her "informed consent" to the settlement, and by "badgering" her into signing the agreement. Wade claimed damages resulting from the "loss of value" of her lawsuit in Wade I.

Phillips filed a motion for summary judgment or for summary adjudication of issues. In support of the motion, Phillips submitted his own declaration, as well as selected discovery excerpts and a request for judicial notice of various pleadings and documents from the Wade I lawsuit.

In opposition, Wade filed her own declaration, attached pleadings and documents from Wade I, and submitted discovery excerpts including the deposition testimony of her and her sister.

The trial court granted summary judgment. After sustaining Phillips's objections to many portions of Wade's declaration, the court found there was no admissible evidence that Phillips failed to explain the terms of the settlement, or did anything else that fell below the standard of professional care. "[O]n the contrary," stated the court, "counsel['s] actions appear reasonable and appropriate throughout."


I. Standard of Review

A motion for summary judgment is properly granted if "all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (§ 437c, subd. (c).) "A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail." (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)

"We review the trial court's decision de novo, considering all of the evidence the parties offered in support of and against the motion, and the uncontradicted inferences reasonably deducible from the evidence, except that to which the court sustained objections." (Paz v. State of California (2000) 22 Cal.4th 550, 557.)

II. Phillips Carried His Initial Burden

In any motion for summary judgment, the pleadings frame the issues. (Heritage Marketing & Ins. Services, Inc. v. Chrustawka (2008) 160 Cal.App.4th 754, 764.) A defendant shows that a cause of action has no merit if he shows that "one or more elements of the cause of action . . . cannot be established" by the plaintiff. (§ 437c, subd. (p)(2); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853 (Aguilar).) If the defendant carries this burden, the burden shifts to the plaintiff to show that a triable issue of fact exists as to that cause of action. (§ 437c, subd. (p)(2).)

According to the complaint, Phillips committed malpractice by failing to obtain Wade's informed consent to the settlement, failing adequately to explain the terms of the agreement to her and pressuring her to sign the agreement while she was in a medicated and fragile emotional state. The second cause of action asserts that these same acts constituted a breach of Phillips's fiduciary duty of loyalty to her.

Phillips's evidence established the following facts: (1) he prepared the case for trial, conducted discovery, and contacted witnesses who would help support Wade's claims; (2) well before the settlement conference, Phillips and Wade discussed several options for settlement, including selling the property and giving the Starks a share of the proceeds. He explained that the ultimate decision on settlement was hers to make and that, while he thought her case was meritorious, there was always a risk she would lose; (3) on the day of the settlement conference, Wade disclosed that she had taken pain medications and antidepressants. However, when Phillips asked whether this would interfere with her taking part in the settlement conference, she assured him it would not and that she was "okay"; (4) during the conference, Referee Bills pointed out the weaknesses in Wade's case, and strongly suggested that she could very well lose at trial; (5) Wade told Phillips that Referee Bills "scared [her] to death." In response, Phillips suggested that the settlement conference be postponed, but Bills rejected the suggestion; (6) Bills transmitted an offer from the Starks to settle the case by selling the property and dividing the net proceeds 60 percent to Wade and 40 percent to the Starks. Through Phillips, Wade submitted a counteroffer on the same terms except the Starks would get only 10 percent. The Starks then submitted a final offer to split the proceeds 70 percent to Wade and 30 percent to them; (7) Phillips told her he could not recommend the offer, but Wade replied she could not withstand going to trial; (8) Bills rejected Phillips's attempt to convey a new counteroffer, stating that the Starks would not negotiate any further; (9) Wade and her sister discussed the Starks's final offer privately outside the courthouse steps; (10) Wade decided to accept the offer, despite Phillips's recommendation against it; and (11) after Phillips went over the terms of the agreement with Wade and answered her questions, she signed a memorandum of settlement at 6:00 p.m. that evening, telling Referee Bills afterward that she was relieved the case was over.

"The elements of a cause of action for attorney malpractice are: (1) the duty of the attorney to use such skill, prudence and diligence as members of the profession commonly possess; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage." (Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1621.) The evidence recited above negated Wade's central allegations that Phillips badgered her into accepting the settlement agreement and failed to obtain her informed consent before it was executed. Furthermore, no aspect of Phillips's actions as shown by this evidence could be deemed by a reasonable trier of fact as falling below the standard of professional care. We must therefore ascertain whether Wade carried her burden of showing there was a genuine factual controversy, requiring a trial.

III. Wade's Evidence Did Not Create a Triable Issue of Fact

"The plaintiff . . . may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto." (§ 437c, subd. (p)(2); see Harper v. Wausau Ins. Co. (1997) 56 Cal.App.4th 1079, 1085.) Wade contends she produced evidence that Phillips failed adequately to explain the terms of the settlement, failed to make it clear that she could just say no, and "badgered" her into signing the agreement against her wishes. However, the evidence she cites either does not support these allegations, or was contradicted by her own sworn admissions.

Wade points to the statement in her declaration that on the day of the settlement conference she advised Phillips that she was not well, had taken a number of prescription drugs, and was in "no shape to conduct a settlement proceeding." This averment appears to contradict Phillips's declaration in which he states that Wade assured him that, despite her physical discomfort and the medications she had taken, she was "okay" and able to proceed. For the following reasons, however, Wade's averment may be disregarded.

First, in her declaration opposing the Starks's motion to enforce the settlement agreement, Wade set forth an exhaustive list of reasons why she should be able to rescind it, but never suggested she had told her attorney she was "in no shape" to proceed. Second, Wade's deposition testimony established that she actively participated in the conference: She rejected the Starks's initial offer; responded with her own counteroffer; discussed the Starks's second offer in private with her sister; and went over the terms of the agreement with Phillips, asking questions before she signed it.

Crucially, when Wade was asked at her deposition, "Did you ever tell Mr. Ash or Mr. Phillips that because you were taking this medication, you didn't feel like you could go through with the settlement conference?" she answered, "No."

It is well established that "a party cannot create an issue of fact by a declaration which contradicts [her] prior discovery responses." (Shin v. Ahn (2007) 42 Cal.4th 482, 500, fn. 12.) In determining whether any triable issue of material fact exists, the trial court may give "great weight" to admissions made in discovery and "disregard contradictory and self-serving affidavits of the party." (Preach v. Monter Rainbow (1993) 12 Cal.App.4th 1441, 1451.) Our Supreme Court has explained that prior sworn admissions "have a very high credibility value," particularly when they are "obtained not in the normal course of human activities and affairs but in the context of an established pretrial procedure whose purpose is to elicit facts." (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 22.) Accordingly, "[w]here a declaration submitted in opposition to a motion for summary judgment clearly contradicts the declarant's earlier deposition testimony or discovery responses, the trial court may fairly disregard the declaration and '"conclude there is no substantial evidence of the existence of a triable issue of fact."'" (Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087, quoting D'Amico, supra, at p. 21.)

Because the statement in Wade's declaration that she told Phillips she was in "no shape" to go through with the settlement conference contradicted her earlier sworn statements, it must be disregarded. (Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609, 1613 ["Admissions or concessions made during the course of discovery govern and control over contrary declarations lodged at a hearing on a motion for summary judgment."].)

Wade's averments that Phillips "badgered" and "prevailed" on her to accept the settlement lack evidentiary value because they do not describe specific words or actions. (See Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1119-1120 (Guthrey) [affidavits containing only conclusions or improper opinions are not admissible].) Nowhere in Wade's 15-page declaration does she cite a single statement by Phillips that could be construed as badgering.

Wade's other evidence also failed to disclose any conduct on the part of Phillips that could be characterized as harassment or bullying. On the contrary, a fair reading of Wade's deposition testimony compels the conclusion that all of the alleged browbeating was done by Referee Bills. When asked how her attorney reacted to Bills's tirade, Wade replied that "Mr. Phillips, bless his heart, [said] I think we should move this to another day, and he [Bills] said no." Later, when she was asked what Phillips said during the settlement conference to give her the impression she would be better off settling, Wade answered, "Not much of anything, actually. He went over this settlement. . . . He had written a bunch of pages. He didn't tell me everything. He just said it will be sold and you will be okay, and you can go on with your life."*fn4

Finally, Wade's declaration failed to deny Phillips's sworn statement that he recommended against acceptance of the Starks's last offer and that Wade replied she did not want to go to trial.*fn5

Wade's declaration additionally states that Phillips committed malpractice by failing to obtain her informed consent to the agreement, failing to explain to her that she had a "silver bullet" in the case due to her husband's incompetence when he signed the nondurable power of attorney, failing to tell her that she "had a right not to settle," and failing to inform her that she could not later revoke or cancel the agreement*fn6 The declaration also lists reasons why the Stark settlement was a "terrible agreement." None of these statements created a triable issue on the claim for attorney malpractice.

Declarations submitted in support of and in opposition to motions for summary judgment must set forth admissible evidence. They must show the declarant's personal knowledge and competency to testify (§ 437c, subd. (d)), and must state facts, not mere conclusions of law or inadmissible opinions (Guthrey, supra, 63 Cal.App.4th at p. 1120).

The general rule in legal malpractice cases is that the standard of care against which the attorney's acts are measured "remains a matter peculiarly within the knowledge of experts." (Uniguard Ins. Group v. O'Flaherty & Belgum (1995) 38 Cal.App.4th 1229, 1239.) Only where "the attorney's negligence is readily apparent from the facts of the case," is expert testimony unnecessary. (Goebel v. Lauderdale (1989) 214 Cal.App.3d 1502, 1508.) This was not such a case.

The intricacies of the doctrine of informed consent, the adequacy of an attorney's advice, and the advisability of a settlement in light of the risks of litigation are not concepts "readily apparent" to laymen. Wade was plainly not qualified to give an opinion on whether Phillips's actions or inaction during the settlement conference met the standard of care within the legal community.*fn7 Wade's averments were thus nothing more than legal argument disguised in the form of a party declaration. We also note the trial court sustained Phillips's objections to almost all of these statements. Thus, they were not admissible evidence sufficient to avoid summary judgment.

Finally, we reject Wade's novel suggestion that an attorney breaches a duty of care if he fails to tell the client that a settlement may not later be canceled or revoked. The concept that a settlement agreement signed by all parties and entered into before a judicial officer truly concludes the case is self-evident and requires no explanation.

We conclude Wade failed to carry her burden of showing a factual controversy on her claim for attorney malpractice.*fn8

IV. Wade Failed to Show Causation

The requirement of causation applies to attorney malpractice actions. "[J]ust as in litigation malpractice actions, a plaintiff in a transactional malpractice action must show that but for the alleged malpractice, it is more likely than not that the plaintiff would have obtained a more favorable result." (Viner v. Sweet (2003) 30 Cal.4th 1232, 1244.) In the settlement context, the plaintiff must prove "'"[to] a legal certainty"'" that, had the case not settled, he or she would have obtained a better result at trial. (Barnard v. Langer (2003) 109 Cal.App.4th 1453, 1461-1462.)

By Wade's own admission, she was ready and willing to settle the case by selling the property and giving the Starks 10 percent of the proceeds. The settlement she ultimately reached gave them 30 percent of the proceeds, while avoiding the risk of an adverse verdict as well as the expenditure of further attorney fees in taking the case through trial, postjudgment motions and a possible appeal. Given these realities, it was incumbent upon Wade to provide nonspeculative evidence that, had she not settled, she would have come out better financially. (See Marshak v. Ballesteros (1999) 72 Cal.App.4th 1514, 1519; Thompson v. Halvonik (1995) 36 Cal.App.4th 657, 663.)

Wade utterly failed to make this showing. Her opposition offered nothing other than her own conclusory allegation that she lost the "value" of her lawsuit against the Starks. For this additional reason, summary judgment in favor of Phillips was properly granted.


This lawsuit rests on the assertion that, despite Wade's assurance that she was physically able to proceed and her expressed desire to accept the Starks's final offer against his recommendation, Phillips nevertheless committed malpractice by failing to stop her from settling the case. We know of no authority that would support the imposition of such a bizarre duty of care. Indeed, had Phillips tried to thwart the settlement against his client's wishes, he would have exposed himself to potential legal liability and/or disciplinary action. We agree with the trial court that Wade failed to produce any evidence that Phillips failed to perform his duties in accordance with professional norms.

This appeal manifests another agonizing and protracted chapter in a series of "sour grapes" lawsuits that do nothing except clog up the court system. The prosecution of pointless malpractice actions such as this one benefits no one except the attorneys, who appear to have exploited it for its maximum pecuniary potential. We hope the filing of this opinion will sound the closing bell to this saga of futility.


The judgment is affirmed. Phillips shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)

We concur: RAYE , Acting P. J. CANTIL-SAKAUYE,J.

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