Modification: Gordon v. Ervin Cohen & Jessup LLP

BRUCE GORDON et al.,

Plaintiffs and Appellants,

v.

ERVIN COHEN & JESSUP LLP et al.,

Defendants and Respondents.

B313903

(Los Angeles County

Super. Ct. No. BC715251)

ORDER MODIFYING

OPINION AND DENYING

REHEARING

NO CHANGE IN THE

JUDGMENT

California Court of Appeal

Second Appellate District

Division Two

Filed March 20, 2023

THE COURT:

It is ordered that the opinion filed herein on February 23, 2023, be modified as follows:

1. On page 20, the end of the second full paragraph, delete the sentence that begins with "To the contrary," and insert the following in its place:

To the contrary, it is undisputed that Chudd informed Claire during a telephone conversation that the LLC operating agreements did not restrict Kenneth's children from inheriting Kenneth's interests in the LLCs, that Claire never told Chudd of a desire to prevent Kenneth from passing his interests to his children, and that Claire---in the 10-plus years between executing the LLC operating agreements and her death---never expressed any discontent with the terms of the LLC operating agreements.

2. On page 24, the first full paragraph, replace the word "four" with the word "five" so that the full sentence reads:

Plaintiffs resist our analysis with what can be grouped into five further arguments.

3. On page 26, immediately following the paragraph that ends with "plaintiffs' unlimited syllogism" in line 3, insert a new paragraph that reads as follows:

Third, plaintiffs assert in their petition for rehearing that our application of the settled rule that a lawyer owes a nonclient third party no duty unless the client's intent to benefit that third party is clear, certain and undisputed erects a "bright-line rule" that "immunizes" lawyers from malpractice as long as the client signs whatever document an "unscrupulous and negligent" lawyer puts in front of her. Plaintiffs grossly mischaracterize our holding. We hold, as the courts before us uniformly have, that a nonclient third party can maintain a malpractice action only if there is clear, certain and undisputed evidence of the client's intent to benefit the third party, or to benefit the third party in the way he claims; here, plaintiffs failed to present sufficiently clear evidence that Claire intended to prohibit Kenneth's children from inheriting any interests in the LLCs.

4. On page 26, modify the sentence that begins with "Third, plaintiffs express" in line 4 to read as follows:

Fourth, plaintiffs express their disagreement with several aspects of the trial court's reasoning in granting summary judgment---namely, that the trial court erred in (1) focusing on the intent "element," and (2) insisting that Claire's intent be derived from the LLC operating agreements, because that insistence somehow wrongly conflates the element of duty with the element of breach of duty.

5. On page 26, line 15, after the sentence that ends with "are also incorrect," insert the following:

Plaintiffs' argument that only the intent "element" was at issue rests on a misapprehension of the law: The only "element" at issue is duty; intent is but one of many factors bearing on whether to recognize such a duty.

6. On page 26, line 15, in the sentence that begins with "The trial court's insistence," replace the first word of the sentence, "The," with "And the" so that the full sentence reads:

And the trial court's insistence upon clear, certain and undisputed evidence of Claire's intent properly focuses on the very question of duty; the court was not examining the breach of duty element.

7. Delete the sentence that begins at the bottom of page 26 with "To the extent plaintiffs" and ends at the top of page 27 with "recognize such a duty," and insert the following in its place:

In their petition for rehearing, plaintiffs expand on their argument that the court erred in looking at the LLC operating agreements in a vacuum because, according to plaintiffs, Claire's intent to disinherit Kenneth's children would have been expressed in those operating agreements but for the lawyers' malpractice in drafting them contrary to her intent expressed in the trust and in not advising Claire about the complexities of the LLC transaction (specifically, how the transaction was consummated differently than first explained to Claire). Plaintiffs' argument fails for three reasons. It fails because plaintiffs are conflating duty and breach by focusing on whether the lawyers satisfied the standard of care in their rendering of legal services to Claire. Plaintiffs' argument fails because it presumes the conclusion we have rejected---that is, that Claire had the same intent to disinherit Kenneth's children with regard to every disposition of assets during her lifetime. And plaintiffs' argument fails because any inference that Claire misunderstood the LLC transaction does not amount to evidence of a clear, certain and undisputed intent by Claire to prevent the LLC interests from being passed on to Kenneth's children.

There is no change in the judgment.

Appellants' petition for rehearing is denied.

LUI, P. J. ASHMANN-GERST, J. HOFFSTADT, J.