filings in related cases involving the family trust on the on

B339271

California Superior Local Rules

Filed 3/18/26 Brodsky v. Ervin Cohen & Jessup CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN JONATHAN BRODSKY, as Trustee of the ADCO Trust, Plaintiff and Respondent, v.

ERVIN COHEN & JESSUP LLP et al., Defendants and Appellants. B339271 (Los Angeles County Super. Ct. No. 23STCV03810) APPEAL from an order of the Superior Court of Los Angeles County, Mel Red Recana, Judge. Affirmed. Ervin Cohen & Jessup, Michael C. Lieb and Allan B. Cooper for Defendant and Appellant Ervin Cohen & Jessup. Willenken, Jason H. Wilson and Kirby Hsu for Defendant and Appellant Reeve E. Chudd. Rosen Saba, James R. Rosen and Abigail Page for Plaintiff and Respondent. ________________________

2 INTRODUCTION Jonathan Brodsky, as Trustee of the ADCO Trust, sued Ervin Cohen & Jessup LLP, a law firm, and Reeve E. Chudd, one of its partners (together, ECJ), for legal malpractice, negligent misrepresentation, breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, and fraudulent concealment. Broadly, the complaint alleges ECJ conspired with Robert Kory to dissipate and divert the assets from singer-songwriter Leonard Cohen’s family trust after his death. ECJ demurred on multiple grounds, and the trial court overruled the demurrer in its entirety.

Relevant to this appeal, the court rejected ECJ’s argument that Brodsky was required, but failed, to obtain a prefiling order pursuant to Civil Code

section 1714.10, subdivision (a). 1

Section 1714.10 “requires a plaintiff to establish a reasonable probability of prevailing before he or she may pursue a ‘cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute.’ ” (Stueve v. Berger Kahn (2013) 222 Cal.App.4th 327, 329 (Stueve).) We affirm. 1

Section 1714.10, subdivision (

d) makes appealable this part of the court’s order on demurrer. Further

section references are to the Civil Code unless otherwise specified.

3 FACTUAL AND PROCEDURAL BACKGROUND2 Leonard Cohen was a well-known singer-songwriter. He had two children, Adam and Lorca Cohen.3 In 1998, Leonard created the Leonard Cohen Family Trust Agreement (the family trust), which named Adam and Lorca as beneficiaries. ECJ were Leonard’s estate planning attorneys. 1. The Family Trust In 2005, ECJ drafted an amendment and restatement to the original family trust (2005 restatement), naming Adam, Lorca, and Anjani Thomas, a fellow musician, as successor co- trustees. Adam and Lorca remained the beneficiaries of the trust.

In or around 2005, Leonard learned his long-time business manager had embezzled more than $5 million from him. Leonard retained Kory, an attorney, to represent him. Kory became his personal manager in 2008. Kory subsequently oversaw most aspects of Leonard’s career, including providing management, legal, and accounting services. In 2008, Leonard established two sub-trusts, ADCO and LORCO, one for each of his children. He named Kory as the trustee for these sub-trusts. Leonard also named Kory as successor trustee to the family trust in 2010 and 2014 amendments.

Thereafter, Leonard began to suspect Kory was not acting in Leonard’s interest and, on July 2, 2016, he revoked 2 Because this is an appeal from a demurrer, we recite the facts as alleged in the operative complaint. (See Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 340.) 3 For ease of reference and meaning no disrespect, we refer to members of the Cohen family by their first names.

4 the 2010 and 2014 amendments. This act had the effect of restoring Adam, Lorca, and Thomas as successor co-trustees of the family trust under the 2005 restatement. The 2016 amendment provided that after distribution of specific bequests, the remainder beneficiaries to the family trust were ADCO and LORCO. Leonard died on November 7, 2016. After Leonard’s death, the operative complaint alleges that Chudd replaced a

section of the 2005 restatement to appoint Kory as the sole successor trustee of the family trust, instead of Adam, Lorca, and Thomas. The complaint alleges this act was a forgery of the 2005 restatement. Chudd then drafted an acceptance of the appointment, which Kory signed. When Adam and Lorca inquired about and requested copies of the operative family trust, Chudd and Kory represented to them that Kory was the trustee of the family trust and provided them with copies of the trust documents.

On June 15, 2017, Lorca’s counsel met with Chudd and asked “why Adam and Lorca should not be the Trustees (and why they should not simply request Thomas to decline). [Chudd] responded, ‘I fucked up.’ [¶] [Chudd] went on to explain that he had made a ‘scrivener’s error’ in the [2016 amendment]. According to [Chudd], Leonard had actually not intended to revoke the trustee succession provision of the [2010 and 2014 amendments].” On February 8, 2023, in a deposition in a different case, Chudd admitted replacing the pages in the 2005 restatement.

5 2. The Lawsuit Several lawsuits were filed against ECJ, Chudd, and Kory.4 Among them, ADCO and LORCO petitioned in probate court to remove Kory as trustee of these sub-trusts. In July 2022, Brodsky replaced Kory as trustee of the ADCO trust. Brodsky sued ECJ and Chudd in this action on February 21, 2023, for compensatory and punitive damages. In the first amended complaint, Brodsky alleges five causes of action for legal malpractice, negligent misrepresentation, breach of fiduciary duty, aiding and abetting Kory’s breach of fiduciary duty, and fraudulent concealment based on the facts leading to the forgery.

The complaint alleges Chudd “either never communicated the fact of [Chudd]’s ‘error’ to Kory . . . or, in collusion with Kory, never communicated the fact of his ‘error’ to the beneficiaries of ADCO or LORCO.” Brodsky alleges ECJ continues to represent Kory in the various lawsuits against Kory, and that it asserts Kory is the rightful trustee of the family trust. He further alleges Kory has paid ECJ out of trust assets in these actions, to the detriment of ADCO and LORCO, the remainder beneficiaries of the family trust.

According to Brodsky, Kory has also used trust assets to pay ECJ for legal services in connection with business ventures in which Kory engaged in self-dealing. “For example, ECJ represents [the family trust] in connection with an archive sale being peddled by Kory’s company RKM.” In short, “[Chudd]’s admitted forgery and fraud enabled Kory to serve as trustee of 4 ECJ filed a motion seeking judicial notice of filings in related cases involving the family trust on the one hand and ECJ on the other. The motion is denied as unnecessary because these filings do not affect our analysis in this case.

6 both [the family trust] and ADCO, and Defendants served as his counsel for both. Wearing both hats, Defendants not only failed to reveal their dual roles (there was never a disclosure and/or conflict waiver presented to Adam or Lorca), but actively exploited numerous conflicts of interest, allowing Kory to pillage the [family trust] assets for himself, [Chudd] and EC&J.” Brodsky alleges ECJ’s fees and Kory’s disbursements have collectively exceeded $9 million. 3. The Demurrer ECJ filed a demurrer, arguing, among other things, that Brodsky was required to receive court approval before filing the complaint pursuant to

section 1714.10. The trial court overruled the demurrer. It ruled that

section 1714.10 did not apply because “[a]lthough the FAC makes allegations that Defendants conspired with former Trustee, Robert Kory, neither the original complaint nor the FAC actually assert a civil conspiracy cause of action.” The court additionally determined that even if the complaint alleged a civil conspiracy claim, the complaint fell under a statutory exception to the prefiling requirement because ECJ “owed an independent legal duty to Plaintiff not to defraud them as nonclients per Civil Code

section 1714.10, subdivision (c).” ECJ timely appealed. DISCUSSION The trial court overruled ECJ’s demurrer because it concluded Brodsky did not allege a conspiracy cause of action under

section 1714.10, subdivision (a), and Chudd had an independent duty to a nonclient under subdivision (c). But civil

7 conspiracy is not a cause of action (Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189, 206 (Favila) [“Civil conspiracy is not an independent tort”]), and Kory as trustee of ADCO was a client of ECJ at the time of the purported forgery. We are, however, not bound by the trial court’s reasoning.

A trial court “ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason” and “[i]f right upon any theory of the law applicable to the case, it must be sustained regardless of the considerations which may have moved the trial court to its conclusion.” (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 19.) A. Governing Law and Standard of Review

Section 1714.10, subdivision (a), provides in pertinent part: “No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action.” Subdivision (

c) of that

section creates two exceptions to the prefiling requirement: “This

section shall not apply to a cause of action against an attorney for a civil conspiracy with his or her client, where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy

8 to violate a legal duty in furtherance of the attorney’s financial gain.” “Applying

section 1714.10 thus requires the court to initially determine whether the pleading falls either within the coverage of the statute or, instead, within one of its stated exceptions.” (Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 818 (Berg).) When it applies, “the plaintiff must make a prima facie showing [of a reasonable probability of prevailing] before being allowed to assert the claim.” (Klotz v.

Milbank, Tweed, Hadley & McCloy (2015) 238 Cal.App.4th 1339, 1350 (Klotz).) Failure to obtain a prefiling order can be raised in a demurrer. (§ 1714.10, subd. (b).) We review de novo the trial court’s order overruling the demurrer. (Klotz, supra, 238 Cal.App.4th at p. 1349; Berg, supra, 131 Cal.App.4th at p. 822.) “[W]e give the complaint a reasonable

interpretation, reading it as a whole and its parts in their context.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Aghaian v. Minassian (2020) 59 Cal.App.5th 447, 451, fn. 2.) B. Overview of

Section 1714.10 In Favila, supra, 188 Cal.App.4th pages 207 to 209, this court provided an overview of the development of

section 1714.10, which “is helpful to an understanding of the statute’s limited scope and proper application”: “Section 1714.10 was originally enacted in 1988 in response to the Court of Appeal’s decision in Wolfrich Corp. v. United Services Automobile Assn. (1983) 149 Cal.App.3d 1206 (Wolfrich), which held, although an insurance company’s attorneys could not be sued directly

9 for violating Insurance Code

section 790.03, they could be sued for conspiring with their client to commit unfair or deceptive acts or practices prohibited by the code. (Wolfrich, at p. 1211.) To prevent the assertion of conspiracy claims against attorneys ‘as a tactical ploy, particularly in actions against insurance companies’ (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 718), former

section 1714.10 required a prefiling judicial determination of probable merit for any claim against an attorney alleging the attorney had conspired with his or her client. [Citations and footnotes omitted.] . . . “In 1989, however, the Supreme Court in Doctors’ Co. v.

Superior Court (1989) 49 Cal.3d 39 (Doctors’ Co.) disapproved Wolfrich, holding no claim for conspiracy to violate the Insurance Code could be maintained against an attorney retained by an insurance company to assist in the defense of an insured against a third party claim. (Id. at p. 41.) The court relied on the doctrine, commonly referred to as the ‘agent’s immunity rule,’ that ‘[a] cause of action for civil conspiracy may not arise . . . if the alleged conspirator, though a participant in the agreement underlying the injury, was not personally bound by the duty violated by the wrongdoing and was acting only as the agent or employee of the party who did have that duty.’ (Id. at p. 44.) The court held, ‘[b]ecause the noninsurer defendants are not subject to [the only statutory duty toward plaintiff claimed to have been breached] and were acting merely as agents of the insurer “and not as individuals for their individual advantage” [citation], “they

10 cannot be held accountable on a theory of conspiracy.” ’ (Id. at p. 45.) “The court explained, however, ‘[i]t remains true, of course, that under other sets of circumstances “[attorneys] may be liable for participation in tortious acts with their clients, and such liability may rest on a conspiracy” [citations].

For example, an attorney who conspires to cause a client to violate a statutory duty peculiar to the client may be acting not only in the performance of a professional duty to serve the client but also in furtherance of the attorney’s own financial gain.’ (Doctors’ Co., supra, 49 Cal.3d at p. 46.) Additionally, a claim may lie ‘against an attorney for conspiring with his or her client to cause injury by violating the attorney’s own duty to the plaintiff.’ (Id. at p. 47.)” Favila further recounted that the Legislature amended the statute in 1991 in response to Doctors’ Co. so that it would “apply only to situations in which it was alleged an attorney had engaged in a conspiracy with his or her client ‘arising from any attempt to contest or compromise a claim.’ ” (Favila, supra, 188 Cal.App.4th at p. 209, quoting

section 1714.10, subd. (a).) Favila observed, “This phrase suggests

section 1714.10, subdivision (a)’s pleading hurdle applies only to situations in which the alleged conspiracy arose from the attorney’s representation of his or her client in a previous or current legal dispute or litigation with the plaintiff.” (Favila, at p. 209, fn. 16.) Favila also observed the 1991 amendment created a new subdivision (c), which contained exceptions to the procedural requirements of subdivision (

a) for the two situations described in

11 Doctors’ Co.: “ ‘where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.’ ” (Favila, at p. 209; see also Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 393-394 (Pavicich) [discussing legislative history of 1991 amendment to § 1714.10].) C. Brodsky Was Not Required To Comply With the Prefiling Requirement Under

Section 1714.10 We conclude Brodsky was not required to comply with the prefiling requirement under

section 1714.10. The plain language of

section 1714.10, subdivision (a), requires Brodsky to obtain a prefiling order only if he alleges a “cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute . . . .” 5 Brodsky’s complaint, however, does not allege a conspiracy between ECJ and Kory “arising from any attempt to contest or compromise a claim or dispute.” The complaint rests on Chudd’s purported forgery of the 2005 restatement by replacing the

section naming Adam, Lorca, and Thomas as successor trustees with one naming Kory as trustee. Indeed, ECJ describes “the essence” of Brodsky’s lawsuit as a conspiracy “to steal the trusteeship of the [family trust], which enabled Kory to loot it.” There is nothing in the complaint to show that, at the time of Leonard’s death and when Chudd committed the alleged forgery, any “claim or dispute” existed. Instead, the complaint alleges 5 We issued a focus letter before oral argument asking the parties to address this language in

section 1714.10, subdivision (a), as well as Stueve and Favila.

12 ECJ and Kory concealed the fraud from Adam and Lorca when they began to ask questions after Leonard’s death. Brodsky was not required to comply with the prefiling requirement because “section 1714.10, subdivision (a)’s pleading hurdle applies only to situations in which the alleged conspiracy arose from the attorney’s representation of his or her client in a previous or current legal dispute or litigation with the plaintiff.” (Favila, supra, 188 Cal.App.4th at p. 209, fn. 16.) Stueve presents substantially the same facts and is on point. Stueve held that

section 1714.10 “does not impede a plaintiff’s pursuit of the type of claims we have here— potentially meritorious claims against a law firm that allegedly conspired to abscond with its clients’ assets.” (Stueve, supra, 222 Cal.App.4th at p. 329.) In Stueve, plaintiffs sued, among others, a lawyer and his law firm for “a purported Ponzi scheme . . . to siphon off the assets of the Stueve family . . . the ‘heirs’ (in lay terms) to the Alta Dena Dairy fortune.” (Ibid.) The trial court granted the law firm’s motion to strike the conspiracy allegations pursuant to

section 1714.10. (Ibid.) The Court of Appeal reversed, holding that claims arising from the “siphoning off of assets through fraudulent estate planning, including the misappropriation of [the plaintiffs’] assets through the diversion of those assets to entities created and controlled by the defendants” do not describe a conspiracy requiring a prefiling order pursuant to

section 1714.10, subdivision (a). (Stueve, supra, 222 Cal.App.4th at p. 331.) Stueve explained, “As is plain from the face of the statute, ‘[s]ection 1714.10 prohibits the unauthorized filing of an action for nonexempt civil conspiracy against an attorney based on conduct arising from the representation of a client that is in

13 connection with any attempt to contest or compromise a claim or dispute.’ [Citation.]” (Ibid.) Transactional activities are not “ ‘arising from any attempt to contest or compromise a claim or dispute.’ ” (Ibid.) Similarly, ECJ’s legal services are transactional activities not subject to

section 1714.10’s prefiling requirement. ECJ asserts that, for purposes of

section 1714.10, subdivision (a), there are “three layers” of claims or disputes from which the conspiracy arose:

(1) Leonard’s dispute with Kory (allegedly demonstrated by Leonard’s email to Kory shortly before his death demanding to know “how much did you take home,” and Leonard’s decision to amend the family trust to reinstate Adam, Lorca, and Thomas as co-trustees);

(2) Adam’s and Lorca’s dispute with Kory and ECJ after Leonard’s death when they questioned Kory and ECJ about the family trust and asked to see the relevant trust documents; and

(3) Adam’s and Lorca’s petitions to remove Kory as trustee of ADCO and LORCO. As stated, the conspiracy alleged is between Kory and ECJ. For this reason, as to (1), we reject the argument that the conspiracy alleged in the complaint arose from an attempt to compromise Leonard’s dispute with Kory.

Section 1714.10 applies to allegations of conspiracies between an attorney and his or her client, and plainly a dispute between Leonard and Kory does not qualify. We are also not persuaded that (2) or (3) constitute claims or disputes that gave rise to the alleged conspiracy because they both postdate the alleged conspiracy. In support, ECJ relies on Cortese v. Sherwood (2018) 26 Cal.App.5th 445 (Cortese) for the proposition that an attorney’s false statements inducing a third

14 party not to bring suit constitute an attempt to compromise a claim. But Cortese is inapposite. In Cortese, the plaintiff daughter sued her mother’s and stepfather’s attorney for breach of trust. She alleged her stepfather promised she would inherit a portion of his estate when he died and that his attorney made similar affirmative statements to her about her inheritance.

When her mother died, the plaintiff questioned her stepfather, who was the executor and trustee of her mother’s estate, and his attorney “ ‘about the low value of the Estate.’ ” (Cortese, supra, 26 Cal.App.5th at p. 451.) She alleged the attorney then “persuaded or ‘induced’ [her] not to challenge” her stepfather’s actions regarding her mother’s estate “and to agree to early termination of [her mother’s] trust, by representing she would receive a large inheritance from [her stepfather’s] estate when he died.” (Id. at p. 455.) After his death, the plaintiff learned she was not a beneficiary to his estate. (Id. at p. 452.) Cortese held “the dispute need not have matured into litigation for

section 1714.10’s prefiling requirements to apply.” (Cortese, supra, 26 Cal.App.5th at p. 457.) It concluded, “the alleged conduct arose from an attempt to compromise a dispute because [the plaintiff] alleges [the attorney] ‘induced [her] into foregoing any challenges to [her stepfather’s] actions as executor and trustee by stating that she should not worry about the valuations as she would be a very wealthy woman at [his] death.” (Ibid.) Cortese does not help ECJ because the alleged conspiracy here centers on Chudd’s purported forgery of the 2005 amendment, rather than any false statements inducing a third party not to bring suit. In Cortese, the stepdaughter disputed her

15 stepfather’s conduct, which was facilitated by the attorney, who, in turn, persuaded her to forestall litigation through misrepresentations. Here, by contrast, the complaint alleges that Chudd’s forgery initiated the dispute among the parties. There was no claim or dispute to be compromised until Chudd committed the forgery, Kory was improperly appointed as the trustee of the family trust, and Adam and Lorca learned about it. In other words, Chudd’s purported forgery arose from a transactional activity unrelated to any claim or dispute. DISPOSITION The order overruling ECJ’s demurrer on the ground that

section 1714.10’s prefiling requirement does not apply is affirmed. Brodsky may recover his costs on appeal. MARTINEZ, P. J. We concur: FEUER, J. STONE, J.

Document details

Collection	California Superior Local Rules
Citation	B339271
Type	court_rule
Language	en
Format	pdf
Source	CA_LOCAL
Identifier	656fc65f949a791cc533eaac30c774209ca1c579

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