Stine v. Dell’Osso

Last month, the California Court of Appeal, First Appellate District, Division One (San Francisco) issued an opinion in Stine v. Dell’Osso, 2014 Cal. App. LEXIS 1039, analyzing “whether a successor conservator can sue for legal malpractice committed in connection with the representation of a prior conservator, and if so, whether malfeasance while serving as conservator.” (Slip opn., p. 4.) The court held that a successor conservator can sue a prior conservator’s attorneys for legal malpractice. (Id.) Further, a prior conservator’s malfeasance does not bar a successor conservator from pursing a malpractice claim on behalf of the estate. (Id. at p. 8.)

Plaintiff, a successor conservator, brought a malpractice action against defendant’s attorneys for alleged malpractice occurring in connection with the attorneys’ representation of the prior conservator. (Slip opn., pp. 1, 3.) The prior conservator was removed as conservator after allegedly misappropriating over one million dollars in assets from the conservatorship estate. (Id. at p. 1.) The trial court sustained the attorneys’ demurrer to the complaint without leave to amend on two grounds: (1) the attorneys’ attorney-client relationship was with the prior conservator, not the successor conservator, and therefore the attorneys owed no duty of care to the successor conservator and (2) the prior conservator’s malfeasance bars the successor conservator from asserting a malpractice claim against the attorneys under the doctrine of unclean hands. (Id.)

The Court of Appeal reversed, concluding that the successor conservator could pursue a malpractice cause of action against the attorneys. (Slip opn., p. 1.) The court explained that a successor fiduciary “assumes all the powers of [the predecessor], including the power to assert the attorney-client privilege as to confidential communications on the subject of trust administration.” (Id. at p. 5 citing Moeller v. Superior Court, 16 Cal.4th 1124, 1127 (1997)). Further, the successor conservator was not burdened by the prior conservator’s malfeasance. Indeed, the prior conservator’s misconduct occurred outside the scope of his fiduciary authority. The prior conservator was solely responsible for his wrongful acts in breach of his fiduciary obligations. The successor conservator “‘steps into his shoes’ only to the extent of his fiduciary authority; she does not step into the morass created by his personal malfeasance.” (Slip opn., p. 12.) Thus, the court determined the successor conservator was not barred from pursuing her malpractice case against the attorneys in connection with their post-appointment representation. (Id.)