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Anita Augello,*Fn1 As Executor, Etc v. John Palley et al

September 6, 2011

ANITA AUGELLO,*FN1 AS EXECUTOR, ETC., ET AL., PLAINTIFFS AND APPELLANTS,
v.
JOHN PALLEY ET AL., DEFENDANTS AND RESPONDENTS.



(Super. Ct. No. 34200800026322CUNPGDS)

The opinion of the court was delivered by: Mauro ,j.

Augello v. Palley

CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

In their second amended complaint, plaintiffs Anita Augello, Flora McFarlane and Elena Macaluso (daughters of decedent Mary Sandroni) sued defendants John Palley and the law firm Johnson, Fort, Meissner, Joseph and Palley, asserting legal malpractice in the drafting of an agreement among estate beneficiaries for reallocation of estate assets. The trial court sustained defendants' demurrer without leave to amend on grounds that the second amended complaint included sham allegations inconsistent with allegations in the first amended complaint, and that defendants did not owe a duty to plaintiffs as individuals because they did not have an attorney-client relationship with them.

Plaintiffs contend on appeal that (1) Augello, in her capacity as executor, had a fiduciary duty to the estate beneficiaries to sue defendants on behalf of all plaintiffs, and (2) plaintiffs are within the class of third parties to which defendants owed a duty, even absent an express attorney-client relationship.

Accepting the well-pleaded allegations of the applicable complaints, we conclude that Augello retained defendants in her capacity as executor to probate decedent's will, with only incidental benefit to the beneficiaries. Augello cannot establish damage to her as executor or to the estate, and defendants did not have a duty to plaintiffs as individuals.

We will affirm the judgment.

BACKGROUND

We assume the truth of the well-pleaded factual allegations in the applicable complaints. (Fogarty v. City of Chico (2007) 148 Cal.App.4th 537, 540 (Fogarty).) In the original complaint, Augello sued as an individual and as executor of the estate of Mary Sandroni; MacFarlane and Macaluso sued as individuals. Plaintiffs alleged they had all retained defendants in 2003 for representation in the probate of their mother's estate. They alleged that defendants owed them a duty to ensure that each plaintiff received her full share of the estate, but that defendants mishandled the distribution of the assets of the estate by failing to properly memorialize a waiver of certain estate assets by other non-plaintiff beneficiaries, resulting in the plaintiffs not receiving the larger share of the estate to which they were entitled. Plaintiffs discovered the malpractice in 2007.

Defendants filed a demurrer to the original complaint. The trial court took judicial notice of filings in the probate proceeding indicating that only Augello, in her capacity as executor, had retained the defendants, and that Augello did not incur any damages in that capacity. The trial court sustained the demurrer but gave plaintiffs leave to amend.

In the first amended complaint, Augello once again sued as an individual and as executor, and MacFarlane and Macaluso again sued as individuals. Plaintiffs now alleged, however, that Augello, as executor, retained defendants to represent "her" in the probate of the estate, entrusting defendants to ensure that each plaintiff received her full share of the estate. In addition to the general allegation that defendants mishandled the distribution of the estate, plaintiffs now alleged more particularly that defendants were "to finalize and memorialize an agreement" under which the non-plaintiff beneficiaries would receive a distribution of "estate assets from the liquidation of stock and other personal property" as to which plaintiffs would forego their interests; plaintiffs would receive their distribution from "the sale of certain real estate assets held in partnership between the Estate and third parties" as to which the non-plaintiff beneficiaries would forego their interests. However, defendants obtained waivers from the non-plaintiff beneficiaries that "were not sufficiently specific" and allowed the non-plaintiff beneficiaries to deny any agreement to forego their interest in the real property on its sale, forcing the plaintiffs to share the proceeds with them. Plaintiffs alleged that Augello had authority to seek damages "on behalf of the estate and the beneficiaries thereof." Plaintiffs asserted damages as a result of the negligence of the defendants.

In ruling on the demurrer to the first amended complaint, the trial court determined that an attorney for an estate does not owe a duty to beneficiaries absent an express retainer with them or conduct that frustrated the intent of the testator. Plaintiffs did not allege that they retained defendants in their individual capacities to prepare the distribution agreement, and the resulting distribution was not inconsistent with the testator's intent. Thus, with regard to Augello acting in her capacity as executor, the trial court determined that she once again failed to allege any facts establishing damages in her representative capacity or to the ...


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