Plaintiff, assignee of rights, appealed an order of the Superior Court of San Diego County (California), entered in favor of defendant attorneys, after demurrers to plaintiff's second amended complaint were sustained without leave to amend, and his claim for punitive damages was stricken . The parties were counseled by their respective  small business lawyer  in California.

Overview

Plaintiff, assignee of rights, had filed a lawsuit for legal malpractice and securities fraud against a third party. The malpractice carriers of the third party retained defendant attorneys. Plaintiff then filed an action against the malpractice carriers and defendants, alleging bad faith theories for their refusal to settle the securities fraud case. The malpractice carriers settled with plaintiff, and assigned to plaintiff their claims against defendants. Defendants successfully demurred to plaintiff's second amended complaint. The trial court concluded that legal malpractice claims were not assignable, whether sounding in negligence or in intentional conduct.The court held that plaintiff had not distinguished his case from authority disallowing the assignment of claims of legal malpractice. The court held that plaintiff ' s claims of fraud and punitive damages, and breach of contract, sounded in malpractice or negligence, not fraud, and thus were non-assignable. Public policy considerations mandated against assignability of such rights. It held that the trial court did not err in sustaining the demurrer, and in finding that the assignment was illegal

Outcome

The court affirmed the trial court's judgment of dismissal of plaintiff's, assignee of rights, claims against defendant attorneys. It held that plaintiff's claims of fraud and intentional breach of contract, sounded in malpractice or negligence, not in fraud, and were non-assignable. The court held that public policy prohibiting assignment of legal malpractice causes of action and punitive damages claims barred plaintiff's action.

Overview

HOLDINGS: [1] -The trial court erred in granting summary adjudication in favor of an insurer with respect to the insureds' claim for breach of insurance contract; [2] -However, the insureds bad faith claim failed under the genuine dispute doctrine, and the trial court properly granted summary adjudication on that claim; [3] -There were no triable issues regarding the adequacy of the insurer's investigation, as the insureds removed the damaged property before the insurer had an opportunity to conduct a full assessment of the insured's proposals and contentions; [4] -The trial court also properly granted summary adjudication with respect to a claim brought by one of the insureds under the Elder Abuse and Dependent Adult Civil Protection Act,

Outcome

Reversed in part, affirmed in part, and remanded for further proceedings.