Estate of Gaspar v. Humboldt Land Title Co.

Estate of JOHANNA E. GASPAR, Deceased.

JACK CRLENJAK, Plaintiff and Appellant, v. HUMBOLDT LAND TITLE COMPANY, Defendant and Respondent.

A142068

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION ONE

April 28, 2016

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Humboldt County Super. Ct. No. DR110599)

Plaintiff Jack Crlenjak appeals from a judgment of dismissal following Humboldt Land Title Company's demurrer to his fourth amended complaint. Crlenjak served as the attorney for the estate of a long-time client, Johanna Gaspar. The estate consisted largely of three parcels of property. The first two were sold without issue. However, the third was sold without full compliance with notice requirements. When one of the beneficiaries objected to Crlenjak's final accounting and request for extraordinary fees, claiming Crlenjak had mishandled Gaspar's property both while she was alive and after she died, Crlenjak retained another lawyer to respond on behalf of the estate. Eventually the probate court approved a final accounting and distribution of the estate, but denied Crlenjak's request for fees.

Crlenjak then filed this lawsuit, claiming the title company had improperly closed escrow on the third property and he had incurred expenses to deal with the problem. Crlenjak apparently never sought to be paid by the estate for these expenses, and by the time of the hearing on the demurrer to his fourth amended complaint, he expressly disavowed trying to recover them in his capacity as the lawyer for the estate. Rather, he claimed to have personally incurred the expenses, and thus sought to recover them from the title company in his individual capacity. The trial court concluded Crlenjak alleged no basis to recover personally from the title company and entered a judgment of dismissal.

We affirm. To begin with, Crlenjak's appellate briefing offers virtually no assistance on the salient issues and the dismissal could be upheld on forfeiture grounds, alone. Even overlooking that, his complaint suffers from an overarching problem—lack of standing—and none of Crlenjak's eight causes of action states, or could be amended to state, a viable claim for relief. And even if he did have standing to sue the title company personally, his allegations are deficient for multiple additional reasons. Finally, we reject his challenge to the award of deposition costs to the title company.

BACKGROUND¹

The Estate of Johanna E. Gaspar consisted principally of three parcels of real estate. Crlenjak was Gaspar's attorney during her lifetime and was retained to serve as the estate's attorney. "[I]n management of the probate estate administration," Crlenjak "contracted with defendant Humboldt Land Title Company" for title and escrow services related to selling the parcels.

Sales of the first two parcels were uneventful. When a buyer was found for each, Crlenjak sent Notices of Proposed Action to the estate beneficiaries advising them of the sale terms. When no one objected, Crlenjak so informed the title company, and the sales proceeded. As to the third parcel, however, the title company closed without Crlenjak's express approval and without having a Notice of Proposed Action in hand. According to Crlenjak, the sale violated Probate Code requirements.

After all the sales closed, Crlenjak filed a First and Final Accounting and Report of Executor. He sought an order of distribution and extraordinary attorney fees.²

One beneficiary, Fred Schreiber, Jr., objected. By way of background, he described how Gaspar, back in 1999, obtained an in-home care provider, Charlene Bradford, following a debilitating stroke. Bradford apparently convinced Gaspar to sell a 5.5-acre portion of her then undivided 18-acre property. Crlenjak handled the sale, and, according to Schreiber, allowed the entire 18-acre property to become encumbered by a deed of trust securing Bradford's purchase of the 5.5-parcel. When Bradford defaulted, the estate, as Crlenjak alleges, had to sue her to recover the 5.5 acres. Crlenjak then caused the 18 acres to be divided into the three parcels that were eventually sold after Gaspar died. Schreiber complained in the probate court that Crlenjak's extraordinary fee request was not only inadequately detailed, but also primarily sought recovery of expenses incurred in resolving the botched Bradford sale, a mess assertedly of Crlenjak's own making. Further, Schreiber claimed entitlement to all of parcel three under Gaspar's will and complained he never received a Notice of Proposed Action regarding the sale. Schreiber demanded the full sale price obtained, with no deduction of escrow fees or commission as a sanction against Crlenjak.

Crlenjak responded to the Schreiber objection on behalf of the estate and the executor. He asserted the Bradford sale occurred while Gaspar was alive and was not an estate matter. He defended his handling of the third parcel, but did not dispute a Notice of Proposed Action was never served. Instead, Crlenjak faulted the title company for the lapse, stating "[t]he estate attorney [i.e. Crlenjak] instructed" the title company to ensure it had a Notice of Proposed Action before closing. Moreover, the title company assertedly had assured Crlenjak that even without his instructions it would comply with the legal formalities applicable to probate matters. Nevertheless, despite Crlenjak's explicit instruction and the title company's assurance it would comply with the Probate Code, the irregular sale had gone forward. Crlenjak further pointed out Schreiber and hisattorney had had actual notice of the proposed sale and its terms, they had never objected, and the sale had been an arm's length transaction at fair market value. Accordingly, Schreiber's interests had not been injured. Crlenjak asked that Schreiber's objection be overruled and Crlenjak's final accounting and fee request be approved, and that the estate be distributed and closed.

At a hearing spanning several days, the probate court took evidence on Schreiber's objection. At this point, Crlenjak represented the executor, and another attorney, Stephen G. Watson,³ made a special appearance for the estate. The court ultimately overruled Schreiber's objection on the ground he had not sustained any injury from the irregular sale of the third parcel. However, the court denied Crlenjak's request for extraordinary fees. On February 17, 2011, the probate court approved an amended First and Final Accounting and Report and ordered final distribution of the estate.

Approximately five months later, Crlenjak filed this lawsuit against Humboldt Land Title Company. Following several rounds of demurrers, Crlenjak's fourth amended complaint became the operative pleading.

In it, Crlenjak alleged the title company harmed him personally when it breached an alleged duty owed to him and broke an alleged promise not to close any sale of estate property without complying with Probate Code requirements. Crlenjak claimed he had to "mitigate damages" and litigate Schreiber's objection at his own expense because he "was hired and had a duty to his client" to assure the lawful sale of estate property. He asserted eight causes of action: (1) professional negligence, (2) breach of oral contract, (3) false promise, (4) fraud or deceit, (5) negligent misrepresentations, (6) breach of fiduciary duty, (7) breach of covenant of good faith and fair dealing, and (8) violation of escrow regulations.

The title company once again demurred, arguing mainly—as it had in previous demurrers—that Crlenjak lacked standing to sue personally over the improperly noticed sale. If anyone suffered harm, argued the title company, it was the estate, not Crlenjak inhis personal capacity. In support of its demurrer, the title company successfully sought judicial notice of the estate's response to Schreiber's objection and of the related probate court orders. At the hearing on the demurrer, Crlenjak's attorney attempted to clarify the allegations of injury in the fourth amended complaint by asserting Crlenjak had to hire additional counsel (we presume Watson, although the record does not disclose this) to litigate Schreiber's objection to completion because Crlenjak was a witness to the facts asserted in it.

The trial court ruled Crlenjak lacked standing, sustained the demurrer without leave to amend, and entered a judgment of dismissal.

DISCUSSION

Review of Order Sustaining Demurrer

"We review de novo the trial court's order sustaining a demurrer." (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1468.) Our only task is to determine whether the plaintiff's complaint states a cause of action. (Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 824.) We accept as true all well-pleaded allegations, and we will reverse the trial court's order of dismissal if the factual allegations state a cause of action under any available legal theory. (Ibid.; Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6 (Evans).) We treat respondent's demurrer as admitting all properly pleaded material facts, but not contentions, deductions, or conclusions of fact or law. (Evans, supra, 38 Cal.4th at p. 6.) We also consider matters that may be judicially noticed, and a " ' "complaint otherwise good on its face is subject to demurrer when facts judicially noticed render it defective." ' " (Ibid.)

Where, as here, "the trial court sustains a demurrer without leave to amend, we review the determination that no amendment could cure the defect in the complaint for an abuse of discretion. [Citation.] The trial court abuses its discretion if there is a reasonable possibility that the plaintiff could cure the defect by amendment. [Citation.] The...