Morrison v. Kimball, Tirey & St. John CA4/1

Opinion

Filed 8/24/26 Morrison v. Kimball, Tirey & St. John CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

JO ELLEN MORRISON, Individually D085585 and as Trustee, etc., Plaintiff and Appellant, (Super. Ct. No. 37-2021- v. 00042690-CU-PN-CTL)

KIMBALL, TIREY & ST. JOHN, Defendant and Respondent.

APPEAL from an order of dismissal of the Superior Court of San Diego County, Gregory W. Pollack, Judge. Affirmed. Salisbury Group, Inc. and Lisa G. Salisbury for Plaintiff and Appellant. Solomon Ward Seidenwurm & Smith, Thomas F. Landers, Mei-Ying Imanaka, and Owen M. Praskievicz for Defendant and Respondent. Jo Ellen Morrison, individually and as trustee of her brother’s trust, filed a third amended complaint alleging professional negligence and breach of fiduciary duty against her estate planning attorney, Lori Bolander; Bolander’s original firm, Kimball, Tirey & St. John, LLP (KTS); and Bolander’s later firm, Gallagher, Bolander, Smedley, LLP (GBS). The trial court sustained without leave to amend KTS’s demurrer on the ground the claims were time-barred under Code of Civil Procedure section 340.6. Jo Ellen contends the trial court erred in sustaining the demurrer because the third amended complaint adequately alleged facts establishing that the discovery rule delayed onset of the one-year statute of limitations. She further argues the court abused its discretion in sustaining the demurrer without leave to amend. We conclude the third amended complaint does not allege facts demonstrating Jo Ellen’s claim accrued within the limitations period. The court therefore did not err in sustaining the demurrer. Because Jo Ellen did not provide authority or argument supporting leave to amend, we further conclude she forfeited her contention that the court abused its discretion in sustaining the demurrer without leave to amend. Accordingly, we affirm. I. On an appeal from a demurrer, we state the facts from the properly pleaded allegations in the operative pleading, its attachments, and any matters subject to judicial notice. (Jimenez v. Mrs. Gooch’s Natural Food Markets, Inc. (2023) 95 Cal.App.5th 645, 653.) In May 2017, Scott Morrison hired Bolander and KTS to get his affairs in order following a cancer diagnosis. He subsequently signed and notarized The J. Scott Morrison Trust dated February 23, 2018 (Trust) naming his sister, Jo Ellen, as a trustee and the sole beneficiary; a power of attorney appointing Jo Ellen; and a will designating Jo Ellen as the executor. He was not married at the time. While hospitalized in May 2018, Scott emailed Bolander, Bolander’s law partner at KTS, Jo Ellen, and Donna Gibson. He explained Donna had just accepted his marriage proposal and they intended to marry immediately.

2 He asked Bolander to “adjust [his] Trust ASAP.” Bolander’s law partner responded that Bolander was out of the office. Scott married Donna that evening. Four days later, Bolander emailed Scott to confirm he did not want to change the Trust’s disposition. She said the amendment and codicil she prepared “just acknowledge you are married, which will protect Jo [Ellen], as Trustee and beneficiary.” There is no indication Scott responded. Scott signed and notarized a first amendment to the Trust and a codicil to the will the next month with the only changes being statements that he had married Donna. Donna signed a spousal consent form waiving any purported entitlement to spousal benefits in Scott’s 401(k) plan. On July 12, Scott passed away. Jo Ellen, on behalf of the Trust, and Donna made competing claims for Scott’s 401(k) proceeds. On October 11, Donna’s counsel wrote to Bolander to notify her that Donna would challenge the Trust unless the parties reached a settlement. Donna filed a petition challenging the Trust on November 15. The next day, Jo Ellen and her mother signed a settlement agreement “allowing [Donna] to receive over the maximum amount [Donna] could receive in a lawsuit, if she had viable claims.” The settlement agreement stipulated that Donna would dismiss the petition. In February 2019, Bolander moved to GBS, and the new law firm took over representing Jo Ellen and the Trust from KTS. In June 2020, Donna filed a motion to enforce the settlement agreement, claiming Jo Ellen should be responsible for an income tax bill issued to Donna. On October 6, Jo Ellen retained new counsel to respond to the motion.

3 Jo Ellen filed her first complaint in the underlying lawsuit on October 6, 2021, and amended it twice. The court sustained Bolander, KTS, and GBS’s demurrers to the second amended complaint without leave to amend as to all but the causes of action for professional negligence and breach of fiduciary duty. The court also granted their motions for judgment on the pleadings, but allowed Jo Ellen leave to amend “to more specifically allege facts sufficient to satisfy her claim of delayed discovery.” “In addition to alleging further facts supportive of her claim for tolling based on delayed discovery, [the court suggested Jo Ellen might] also wish to allege further facts in support of tolling based upon ‘no actual injury’ and/or ‘continuous representation’ under [Code of Civil Procedure section] 340.6(a)(1) and (2).” After Jo Ellen filed her third amended complaint, KTS demurred on the ground the claims were time-barred under section 340.6. The trial court sustained the demurrer, concluding several alleged facts provided sufficient notice of counsel’s wrongdoing more than a year before Jo Ellen filed the lawsuit. Specifically, the court found three facts precluded assertion of the delayed discovery rule: (1) Jo Ellen learned Donna was challenging the Trust in October 2018; (2) Jo Ellen signed a settlement agreement with Donna in November 2018 providing a significant amount of Scott’s assets to Donna; and (3) Donna filed a motion to enforce that settlement agreement in June 2020, seeking an order that Jo Ellen be responsible for payment of any income tax generated by Scott’s 401(k) plan instead of Donna.

4 II. A. Jo Ellen contends the trial court erred in finding the discovery rule did not apply as a matter of law and sustaining the demurrer. We conclude the court correctly sustained the demurrer. A legal malpractice action must “be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission.” (§ 340.6(a).) When it is apparent from the face of the complaint that a claim is barred by the statute of limitations, a plaintiff relying on the delayed discovery rule bears the burden of pleading facts showing “‘(1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) Ordinarily, whether the plaintiff belatedly discovered the cause of action is a question of fact. (Baright v. Willis (1984) 151 Cal.App.3d 303, 311.) But if reasonable minds can draw only one conclusion from the facts, the question may be decided as a matter of law. (Ibid.) As relevant here, the limitations period is also tolled if “[t]he plaintiff has not sustained actual injury.” (§ 340.6(a)(1).) Actual injury is a “loss or diminution of a right or remedy” that is legally cognizable as damages sufficient to plead a legal malpractice claim. (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 743-744, 749.) “In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory.” (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.)

5 Jo Ellen acknowledges (1) she filed the complaint more than one year beyond when the third amended complaint alleged KTS committed malpractice and (2) KTS ceased representing her in February 2019. Accordingly, she admits her action against KTS is timely only with application of the discovery rule. But she contends the three facts the trial court relied on do not demonstrate she knew or should have known prior to October 16, 2020, when her new attorneys received Bolander’s file, that she had a potential claim against KTS. We disagree. According to Jo Ellen, the third amended complaint makes clear that Bolander never showed her the October 11, 2018 letter from Donna’s attorney threatening to challenge the Trust. She alleges she did not know about it until years later, when her new attorneys found it in the file. Likewise, she argues Donna’s June 2020 motion did not put her on notice that her attorney had erred in drafting, managing, and administering the Trust because her attorney said the motion, which ultimately yielded no damages, was meritless. In her view, the motion triggered, at most, the statute of limitations as to the preparation of the settlement agreement’s tax provisions, not as to all her claims against Bolander and KTS. Even if we accept these arguments as to the court’s first and third reasons, we agree with the trial court’s second rationale that no other reasonable conclusion can be drawn from the allegations in the third amended complaint but that Jo Ellen had reason to know when she signed the settlement agreement that the Trust was not drafted to prevent a legitimate contest. Jo Ellen argues she had already agreed to “provide for” Donna and “the November 2018 settlement cannot be a basis for inquiry notice; it is, rather, simply the memorialization of the promise [Jo Ellen] made to Donna through 6 counsel in July 2018, and of the promise she made to Scott before his passing.” But if her attorney “provided for” Donna as Jo Ellen requested, then the attorney did nothing wrong, and Jo Ellen would not be suing. Jo Ellen next maintains she only understood the settlement agreement as avoiding the need for potential litigation. As an initial matter, her assertion that she was unaware Donna had already initiated litigation by filing a petition in the probate court is belied by the allegation in the third amended complaint that “[a]s part of the Settlement Agreement, [Donna] by and through her attorney . . . was to dismiss the Petition.” Regardless, even if we accept Jo Ellen did not know Donna had already filed a petition, a reasonable person would not settle for a substantial amount of money unless she thought she risked losing more if litigation ensued. Paragraph 41 of the third amended complaint asserts the reasons Donna might sue, stating, “The Settlement Agreement in simple terms provided that in an exchange for waiving any claim and/or interest in the [401(k)] PLAN and/or the TRUST, [Jo Ellen] would provide certain other assets of value from [Scott] to [Donna].” The third amended complaint further indicates Jo Ellen understood herself to be the sole beneficiary of the Trust. If she nonetheless thought Donna might sue for one of these reasons and had a chance at prevailing, then Jo Ellen must have had reason to suspect her attorney erred in drafting the Trust amendment and otherwise protecting the estate after the marriage. We are unpersuaded by Jo Ellen’s contention she was not on inquiry notice because the degree of diligence expected of her in ferreting out negligence is diminished within the context of a professional relationship. (See Baright, 151 Cal.App.3d at p. 311.) Although this is true, a client remains under a duty to investigate counsel’s actions when the client “has 7 actual notice of facts sufficient to arouse the suspicions of a reasonable person.” (Johnson v. Haberman & Kassoy (1988) 201 Cal.App.3d 1468, 1476.) Here, the third amended complaint alleges Scott named Jo Ellen as his only beneficiary before his marriage and did not change this designation with the Trust amendment he signed after his marriage. It further alleges Jo Ellen agreed to the settlement because she understood it to be “a good deal and/or beneficial[,] as the settlement would put an end to future litigation by [Donna.]” Regardless of whether she relied on counsel’s advice in entering the settlement agreement, her understanding only makes sense if she believed the likelihood of Donna’s lawsuit being successful warranted giving up something of significant value—a sizeable portion of the Trust assets—to avoid potential litigation. A reasonable person would question why potentially meritorious litigation was possible where counsel’s directive in amending the Trust had been to protect Jo Ellen’s interests against challenges by Donna. Because Jo Ellen offers no other reasonable conclusion from the third amended complaint’s facts, she has not demonstrated she was reasonably diligent in discovering KTS’s wrongful acts. Jo Ellen’s agreement with the settlement terms also satisfied section 340.6’s actual damages requirement because her attorney’s potentially negligent conduct required her to give more than half of the Trust’s assets to an individual who was not designated as a beneficiary. This constituted a loss. (See Jordache Enterprises, 18 Cal.4th at p. 760.) In sum, the trial court correctly concluded Jo Ellen had inquiry notice of her malpractice claims no later than November 16, 2018, when she signed the settlement agreement, and that all tolling ceased by February 2019, when GBS took over representation from KTS. (See § 340.6(a) [statute of limitations tolled while “[t]he attorney continues to represent the plaintiff 8 regarding the specific subject matter in which the alleged wrongful act or omission occurred.”].) Jo Ellen’s October 6, 2021 complaint against KTS was therefore untimely. B. Although Jo Ellen listed the court’s failure to grant leave to amend as an “[i]ssue[] [p]resented” in her opening brief, we conclude she has not established entitlement to relief. We review an order denying leave to amend for abuse of discretion. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) “In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record.” (City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 286–287.) “[W]e may disregard conclusory arguments that are not supported by pertinent legal authority or fail to disclose the reasoning by which the appellant reached the conclusions [the appellant] wants us to adopt.” (Id. at p. 287.) Here, Jo Ellen has offered no argument as to how the court abused its discretion. Accordingly, we deem this inadequately developed argument forfeited. (See United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 161.) Because Jo Ellen has not satisfied her burden of specifying what facts she could add to demonstrate delayed discovery if granted leave to amend, the contention also fails on the merits. (See Minnick v. Automotive Creations, Inc. (2017) 13 Cal.App.5th 1000, 1004.)

9 III. We affirm. KTS shall recover its costs on appeal.

CASTILLO, J.

WE CONCUR:

O’ROURKE, Acting P. J.

DATO, J.