Yale v. Bowne, 3/10/17 2DCA/2
Yale is well-to-do. She married Knight subject to a prenup to protect her separate property. Many years later, she hired Bowne to update her trust. She wanted to maintain the status of her separate property. Bowne drew up the trust documents, but the underlying property transfer documents (e.g., the deeds) designated her property as community property. And this is where it gets strange: She testified that she actually saw the “community property” designation in the deeds that Bowne had prepared. And stranger still — Seeing that the deeds said “community property,” she said nothing to Bowne and executed them. (Make sense of that if you can!) Knight subsequently did some bad things to Yale (read the case), and their marriage fell apart. With the help of another attorney, Yale was able to transfer her property back to her name and protect it. Knight then filed for divorce. On advice of counsel, Yale paid Knight $260,000 (in cash and assumed obligations) rather than risk a court finding that her entire estate (perhaps $2M) was community property. She then sued her former attorney Bowne for legal malpractice. The trial court agreed to give the comparative fault instruction to the jury. The jury awarded damages but attributed 10% of the fault to Yale. She appealed. Held: Affirmed
The court said that the comparative fault principles set out in Li v. Yellow Cab Co. (1975) 13 Cal.3d 804 (Li) apply to negligence actions. Legal malpractice claims are a subset of negligence, ergo . . . . Of course, a comparative fault instruction is not automatic: There must be substantial evidence to warrant giving the comparative fault instruction to the jury. The court had little trouble find that substantial evidence supported the instruction given by the trial court.
Yale was a self-taught investor. She was also very aware of the difference between the label separate property and community property; in fact, in her first marriage she had been hammered in the divorce because she allowed her separate property to transmute to community property status. Moreover, before executing Bowne’s trust documents, she had recently entered a different real estate transaction where those designations were crucial, and she was careful to make sure the document designations were correct. Finally, she read and executed the property deeds that re-characterized her property as “community property.” Frankly, under these facts, the fact that Yale spent money to appeal that issue is surprising: The jury could have been a lot less forgiving and attributed much more than 10% of the fault to her.
Finally, the court distinguished legal malpractice cases where the trial court had refused to give a comparative fault instruction, because those cases involved things like civil procedure, about which the normal client knows nothing.