The Second District Court of Appeal, Division Five (Los Angeles) recently issued an opinion regarding a claim for breach of fiduciary duty in a legal malpractice case. In Broadway Victoria, LLC v. Norminton & Fuster (Apr. 19, 2017, B266060) __ Cal.App.5th __, the court held that “when the basis for a claim of breach of fiduciary duty arises from the same facts and seeks the same relief as the attorney negligence claim for malpractice, the claim for breach of fiduciary duty is duplicative and should be dismissed.” (Slip opn., p. 17.)
Plaintiff, Broadway Victoria, LLC (“Broadway Victoria”), sued defendant, Norminton Wiita & Fuster (“Norminton”), for legal malpractice and breach of fiduciary duty arising out of its representation of Broadway Victoria in a contract action (“Elixir action”) against Elixir Industries (“Elixir”). (Slip opn., p. 7) The Elixir action was based on an Elixir lease agreement that had been assigned to Broadway Victoria in connection with bankruptcy proceedings. (Id. at pp. 4-5.) The trial court granted summary judgment in favor of Elixir in the Elixir Action, holding that Broadway Victoria lacked standing because the assignment did not transfer the cause of action against Elixir for breach of the right of first refusal provision. (Id. at p. 6.) Broadway Victoria’s malpractice claim was based, in part, on the theory that Norminton should have sought clarification with the bankruptcy court about the assignment rather than litigate the issue. (Id. at p. 7.) Broadway Victoria also claimed that Norminton breached its fiduciary duty based on the same facts and allegations supporting its legal malpractice cause of action. (Ibid.) The trial court granted nonsuit on the fiduciary duty claim, and plaintiff appealed the ensuing judgment. (Id. at pp. 7-8.)
In the published portion of the opinion, the Court of Appeal held that the trial court properly granted nonsuit on the breach of fiduciary duty claim. (Slip opn., p. 13.) The court reasoned that malpractice and breach of fiduciary duty claims are entirely distinct from each other, thus a breach of fiduciary duty claim “requires some further violation of the obligation of trust, confidence, and/or loyalty to the client.” (Id. at p. 14.) As such, relying on the persuasive authority of other jurisdictions, the court held that “when the basis for a claim of breach of fiduciary duty arises from the same facts and seeks the same relief as the attorney negligence claim for malpractice, the claim for breach of fiduciary duty is duplicative and should be dismissed.” (Id. at p. 17.) In this case, the court determined that the evidence produced by Broadway Victoria “might have been sufficient to show professional negligence,” but this evidence could not support a finding that Norminton “breached any distinct duty of confidentiality or loyalty.” (Id. at p. 19.)
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